‘IMF loan for Sri Lanka not appropriate right now’

WASHINGTON (AFP) — US Secretary of State Hillary Clinton said here Thursday it “is not an appropriate time” to consider a massive International Monetary Fund loan for Sri Lanka.

Clinton told reporters that the United States has been “trying to convince both sides,” the Sri Lankan government and the Tamil Tiger guerrillas, to stop fighting.

“We have also raised questions about the IMF loan at this time. We think that it is not an appropriate time to consider that (loan) until there is a resolution of the conflict,” Clinton added.

The United States is the main shareholder in the IMF and its approval is key to the release of the loan.

Clinton’s comments came two weeks after the IMF said talks with Sri Lanka for a bailout package of around two billion dollars were continuing despite reports the fund was under pressure to withold the planned financing.

News reports said US officials indicated that they want the IMF loan to Sri Lanka, aimed at helping the low-income Asian country cope with the global financial crisis, delayed to prod Colombo to step up aid to civilians.

The central bank in Colombo said at the time that an IMF mission was in Sri Lanka to try to ensure there are enough controls to verify that the IMF funds for balance-of-payments support are not used for other purposes.

Sri Lankan central bank governor Nivard Cabraal said the IMF loan was on track and procedures such as safeguard assessments had to be finished regardless of whether the United States was dragging its feet over the loan.

Jeff Anderson, a US embassy spokesman in Colombo, rejected any notion that Washington was threatening to stop the IMF loan, which according to reports ranges from 1.9 billion dollars to 2.4 billion dollars.

But the French ambassador to the United Nations in New York, Jean-Maurice Ripert, was quoted in a media report as saying that the “Americans want to play with the question of the IMF loan.”

Clinton and her British counterpart David Miliband, during a joint appearance here Tuesday, called on all Sri Lankans to stop fighting immediately and allow trapped civilians to escape the conflict.

It was the latest in a series of so far futile international calls aimed at ending the fighting between government forces and the separatist guerrillas, holed up on a coastal strip in the island’s northeast.

They also expressed “alarm at the large number of reported civilian casualties over the past several days in the designated “safe zone” along the coastal strip.

The pair urged the warring sides to allow a UN humanitarian team to visit the conflict zone and help evacuate the civilians as well as allow food and medical aid to reach those trapped by the fighting.

In New York on Monday, Miliband and his counterparts Bernard Kouchner of France and Michael Spindelegger of Austria issued an appeal that called on the UN Security Council to address the “appalling” crisis in Sri Lanka.

It was announced at UN headquarters on Thursday that UN chief Ban Ki-moon is rushing his chief of staff Vijay Nambiar back to Sri Lanka to press for protection of the trapped civilians.

Copyright © 2009 AFP.


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