India-Sri Lanka relations

India-Sri Lanka relations

News: Recently, India sent written financing assurances to the International Monetary Fund (IMF), becoming the first bilateral creditor of the island nation to officially support its crucial debt restructure programme after last year’s economic meltdown. 

How will written assurance help the island nation?
• The International Monetary Fund’s provisional USD 2.9 billion package to Sri Lanka will be cleared only after Sri Lanka’s official creditors - China, Japan and India have provided adequate financing assurances.
• The decision of financing assurance was also a reassertion of India’s belief in the principle of “neighborhood first”, and not leaving a partner to fend for themselves.

Key Takeaways:
• Dr. Jaishankar said in Colombo that in going to the IMF first, India “did not wait on others and decided to do what we believe is right”, acting on its Neighbourhood First principle. 
• Dr. Jaishankar announced that the two countries had agreed in principle on a renewable energy framework. 
• It was further reiterated to the Lankan government to implement the 13th amendment in its constitution. The amendment, which provides for elected provincial councils, was introduced at India’s intervention in 1987. It is the only concession in the constitution on the Tamil demand for devolution.  

About IMF:
• The IMF was set up along with the World Bank after the Second World War to assist in the reconstruction of war-ravaged countries. 
• The IMF's primary purpose is to ensure the stability of the international monetary system the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
• The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
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