Premachandra Athukorala, an article taken from Daily FT, where t has appeared on the 30th September 2021 in three parts, under this title “Sri Lanka and the IMF: Myth and reality”
The decision to go to the IMF for assistance rests entirely with the IMF members. However, the relationship between the IMF and its developing-country members under stabilisation programmes has not always been smooth.
Sri Lanka’s first attempt to borrow from the IMF under an SBA was by the Sri Lanka Freedom Party (SLFP) and Lanka Sama Samaja Party (LSSP) Coalition Government in 1964. By that time import restriction and capital controls had been carried out to the maximum and it was becoming increasingly difficult to introduce further restrictions without damaging the economy. Because of the nationalisation of the foreign-owned gas and petroleum outlets in 1961, Sri Lanka became the first country against which the US Government invoked the Hickenlooper Amendment requiring the suspension of US aid to countries expropriating US property without compensation. Following this, the international aid community virtually isolated Sri Lanka
“We cannot brush aside and completely ignore these international institutions; we can repudiate their terms only if we are prepared to face the far-reaching distortions”
“The Government’s effort to put its own house in order is not the result of IMF advice but is the obvious thing to do in the national interest”
– Dr. N.M. Perera, Finance Minister of the United Front Government, 1970-’75 –
