SRI LANKA AND IMF AGREE ON ECONOMIC REFORMS
Sri Lanka and the International
Monetary Fund (IMF) have reached agreement on the broad outline
of economic reforms, but tough negotiations are likely before
the IMF approves up to 240 mln dlrs in loans, a senior finance
ministry official told Reuters.
    He said the government and IMF this week agreed on a
package to reduce the balance of payments deficit, improve
management of public enterprises, reform tariffs, develop
non-traditional exports and privatise public firms.
    An IMF-World Bank team will visit Colombo next month to
start negotiations on details of a three-year economic reform
programme. "There is a broad agreement on the content of the
policy package for a structural reform," the official said. "But
in areas where the reform would take place, there would be
tough neotiations on how much you do and in what order should
it take place," he added.
    Sri Lanka is seeking a total of about 240 mln dlrs in
structural adjustment loans to support the balance of payments
and in a compensatory financing facility to offset losses in
commodity exports.
    Sri Lanka needs the IMF and World Bank approval of the two
facilities to clear the way for negotiations on requests for
aid and loans from donor countries.
    These include an expected pledge of 550 mln dlrs from from
12 industrialised countries and about 240 mln dlrs in loans
from the World Bank and the Asian Development Bank.
    Finance Minister Ronnie De Mel said in an interview
published today by the Daily News that there was likelihood of
Sri Lanka obtaining all of that aid despite intense lobbying by
pro-Tamil and human rights groups abroad.
    He said that although friendly countries were still
prepared to assist Sri Lanka with concessional aid, Colombo
would have to surmount many problems in detailed negotiations
due in May, June and August before these loans are finalised.
    "In these matters, there's many a slip between the cup and
the lip as other governments have learned to their cost," De Mel
said.
 REUTER
