The government has asked the International Monetary Fund (IMF) for a bail out facility to resolve the current balance of payments crisis. A loan facility is urgently needed owing to the critical state of the balance of payments. This crisis in the external finances has been brought about by the mismanagement of the economy over several years.

Previous requests

In similar situations in the past, governments resorted to a rescue package from the IMF. In 1977 the government obtained a Structural Adjustment Facility (SAF) to undertake trade liberalisation and economic reforms. In July 2009 the IMF approved a 20-month Stand-By Arrangement (SBA) of approximately US$ 2.6 billion, as a Balance of Payments (BOP) support.

Macroeconomic weaknesses

Once again the severe difficulties in external finances have made the government request the IMF for a loan facility to resolve the critical balance of payments situation. This situation arose owing to fundamental macroeconomic weaknesses: high fiscal deficits, large foreign debt, and widening of the trade and balance of payments deficits. Recent capital outflows that accentuated the balance of payments problem were due to these weaknesses as well as international factors.

Sri Lankan Prime Minister Ranil Wickremesinghe warned media on the island that his government would take action against those that “insult religions and some sections of the society,” reports Daily Mirror.

Tamil journalist Puniyamoorthy Sathiyamoorthy, who was killed by a Sri Lankan artillery barrage inside the ‘No Fire Zone’ in February 2009, was remembered in Jaffna this week.

A ceremony held at Jaffna Hindu College saw the Editor-in-Chief of the Jaffna daily ‘Valampuri’ N. Vijayasuntharam speak alongside the director of Jaffna Hospital Dr Sathiyamoorthy.

Puniyamoorthy Sathiyamoorthy, a journalist of Vanni based Media House wrote the military column for the 'Eezhanaatham' daily. He was reporting from inside the ‘No Fire Zone’ when Sri Lankan artillery shells landed in the area.

“Several Tamil media reports said Sathiyamoorthy did not die immediately,” said the Committee to Protect Journalists (CPJ). “They cited relatives who said a lack of proper medical attention contributed to his death.”