Sri Lanka and Russia continue negotiations on a loan for Russian fuel

MOSCOW, 17 Sep — PRIME. The authorities of Sri Lanka continue to discuss with Russia the request of the former president of the island state for a loan for Russian fuel, negotiations are “going well”, Sri Lanka needs serious support from the Russian Federation, Sri Lankan Minister of Transport Bandula Gunawardana said in an interview with RIA Novosti.

“We can end this crisis. Last month we faced it, but now we are slowly but recovering from each of the crises – both economic and monetary. We would like to receive serious support from Russia in this matter. Negotiations are underway on this and are going well,” Gunawardana said.

He recalled that the former President of Sri Lanka, Gotabaya Rajapaksa, asked the Russian authorities for help to cope with the fuel crisis: “We needed a loan to buy Russian fuel … We hope Russia can help us. I think your support will be significant for our country”.

The minister noted that the fuel crisis on the island is not related to the anti-Russian sanctions of the West: “We import oil products from the Middle East, not from Russia, so the sanctions do not affect us directly.”

In July, then Sri Lankan President Gotabaya Rajapaksa, in a telephone conversation with Russian President Vladimir Putin, asked for a line of credit to import Russian fuel.

Sri Lanka is experiencing its worst economic crisis since independence in 1948. In mid-April, the Sri Lankan authorities defaulted on their external debt for an interim period, pending a restructuring of those obligations under an IMF-supported economic adjustment program. The external debt of the island nation is estimated at $51 billion.

The economic crisis is caused by a shortage of foreign exchange resulting from the restriction of tourist flow due to the coronavirus pandemic, as a result, the country cannot buy enough fuel.

There is an acute shortage of food and basic necessities, fuel and gas in the country. Many parts of Sri Lanka are facing power outages due to lack of foreign exchange to import fuel. The country’s economy will contract by 8.7% in 2022, with inflation recently surpassing 60%, according to the IMF.

Read the full text of the interview at ria.ru at 10.00 Moscow time.