Sri Lanka to receive $3bn bailout but government faces corruption probe
Sri Lanka is to receive $3bn (£2.44bn) as part of a bailout plan to help the bankrupt nation which is also facing a humanitarian crisis.
The International Monetary Fund’s (IMF) executive board will give the country $333m (£272m) immediately to help it rein in its debt to sustainable levels.
However, the IMF funding will not immediately help millions of Sri Lankans, who are being squeezed by soaring costs of
living, high income taxes of up to 36% and a 66% increase in power tariffs.
Protests have been held across the country in recent months
Half of Sri Lanka‘s families have been forced to reduce portions they feed their children, according to a survey by Save the Children released this month.
Economic mismanagement coupled with the impact of the COVID pandemic left Sri Lanka severely short of dollars for
essential imports at the beginning of last year, tipping the island nation into its worst financial crisis in seven decades.
The office of President Ranil Wickremesinghe said the programme would enable it to access up to $7bn in overall
funding.
The economy has stabilised under President Ranil Wickremesinghe
“Sri Lanka is no longer deemed bankrupt by the world,” he said in a video statement.
“As our foreign currency improves, we will gradually lift import restrictions. In the first cycle we will bring in essential goods, medicines and goods needed for the tourism industry,” Mr Wickremesinghe said, adding that he expects to table the agreement with the IMF in parliament after making a detailed statement on Wednesday.
But the IMF has also said it is assessing Sri Lanka’s governance in the first case of an Asian country facing scrutiny for corruption as part of a bailout programme.
The senior mission chief for the IMF in Sri Lanka said the development lender was “conducting an in-depth governance diagnostic exercise which will assess corruption and governance vulnerabilities in Sri Lanka and provide prioritised and sequenced recommendations”.
“Sri Lanka will be the first country in Asia to undergo a governance diagnostic exercise by the IMF. We look forward to further engagement and collaboration with stakeholders and civil society organisations on this critical reform area,” Peter Breuer told reporters.
Sri Lankans took to the streets since last year demanding accountability for alleged corruption and demanding recovery of assets allegedly stolen by members of a former ruling family.
Since Mr Wickremesinghe took over from ousted ex-President Gotobaya Rajapaksa he has managed to reduce goods shortages and end hours-long daily power cuts.
The central bank says its reserves have improved and the black market no longer controls the foreign currency trade.
But Mr Wickremesinghe’s critics accuse him of shielding the Rajapaksa family, which still controls a majority of lawmakers in parliament, in return for their support for his presidency.
World
US blocks Palestinian President Mahmoud Abbas and 80 other officials from United Nations’ annual meeting in New York
Palestinian President Mahmoud Abbas and 80 other officials have been blocked from attending September’s annual meeting of the United Nations General Assembly in New York.
US secretary of state Marco Rubio has revoked the US visas of delegates from the Palestinian Authority (PA) and Palestine Liberation Organisation (PLO), and denied others from applying for one.
It is the latest step by Donald Trump’s administration to target Palestinians with visa restrictions, and follows the suspension of a programme to allow injured children from Gaza to receive treatment in the US.
Mahmoud Abbas addressed the general assembly in 2024, but is barred from next month’s meeting. Pic: Reuters
“It is in our national security interests to hold the PLO and PA accountable for not complying with their commitments, and for undermining the prospects for peace,” a statement from the US State Department said.
It added that, to be considered partners for peace, both groups “must consistently repudiate terrorism, and end incitement to terrorism in education, as required by US law and as promised by the PLO”.
Offensive will cause ‘intolerable deaths’
Several US allies, including France, Malta, and Australia have announced plans to recognise Palestine as a state at September’s United Nations General Assembly. Canada and the UK will too, unless Israel meets certain conditions.
Israel declared Gaza’s largest city a dangerous combat zone on Friday.
The army launched a planned offensive that has drawn international condemnation.
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Thick smoke rises from Gaza City after Israeli strikes
Foreign ministers from Iceland, Ireland, Luxembourg, Norway, Slovenia and Spain released a joint statement saying the military operations in Gaza City will cause “intolerable deaths of innocent Palestinian civilians”.
Gaza latest: Israel’s Gaza City offensive condemned
Hundreds of thousands of Palestinians are sheltering in Gaza City while enduring famine.
An Israeli armoured vehicle in northern Gaza on Friday. Pic: AP
Palestinians ride a truck carrying humanitarian aid in Gaza City. Pic: AP
The Palestinian ambassador to the United Nations (UN), Riyad Mansour, said Mr Abbas had planned to lead the delegation to the UN meetings and was expected to address the general assembly at the general debate, which begins on 23 September.
He was also expected to attend a high-level meeting co-chaired by France and Saudi Arabia on 22 September about a two-state solution, a broad idea involving Israel coexisting with an independent Palestinian state.
The State of Palestine is an observer member of the UN, meaning it can speak at meetings but not vote on resolutions.
The State of Palestine cannot vote on UN resolutions. Pic: AP
US decision ‘contravenes international law’
The Palestinian Authority “expressed its deep regret and astonishment” at the visa decision, calling it “a violation of US commitments” as the host of the UN, and claiming it “contravenes international law”.
UN spokesman Stephane Dujarric said the world body would be seeking clarification in the “hope that this will be resolved”.
Hundreds of diplomats left when Israeli leader Benjamin Netanyahu began speaking at the general assembly in 2024. Pic: Reuters
The State Department said that the Palestinian Authority’s mission to the UN, comprising officials who are permanently based there, would not be included in the restrictions.
Under a 1947 UN agreement, the US is generally required to allow access for foreign diplomats to the UN in New York.
But Washington has said it can deny visas for security, extremism and foreign policy reasons.
Read more from Sky News:
Analysis: Israel is killing a lot of journalists
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The death toll in Gaza has now risen to 63,025, according to the Hamas-run health ministry, which does not differentiate between civilians and combatants.
It also reported five more malnutrition-related deaths in the last 24 hours, bringing the total number during the war to 322, with 121 of them children.
World
Brazil implores businesses to attend major climate summit, despite ‘second thoughts’ amid Trump backlash
The Brazilian hosts of the biggest climate meeting of the year have implored businesses to attend in November, amid concerns some are backing away from the climate agenda into the shadow of Donald Trump.
In an interview with Sky News, Ana Toni, chief executive of the COP30 climate summit in November, admitted some companies were having “second thoughts” about the global switch to green economies because policymakers were creating uncertainty.
The US President Donald Trump has been attacking wind farms and waging tariff wars that could slow the transition to green energy.
Banks including HSBC and Barclays have ditched a net zero alliance set up just four years ago by Mark Carney, now the Canadian Prime Minister.
Ana Toni, Brazil’s climate secretary, is chief executive of the COP30 climate talks. Pic: Reuters
But even before Trump took office, tech companies were quietly dropping climate targets to prioritise energy-hungry AI, and other businesses were “greenhushing” their climate initiatives for fear of backlash.
In this environment, there are fears fewer business leaders will attend the annual talks, which are also being hosted in a city on the edge of the Amazon that hasn’t enough hotel rooms.
On Friday, the COP30 team wrote to business leaders urging them to “step forward, not back” and travel to Belem, despite “logistical challenges” and the “background of systemic uncertainty”.
Ana Toni told Sky News: “We are very concerned that the enabling conditions must be there so that the private sector can also deliver where they do best, which is bringing in technology, bringing innovation and accelerating the process of decarbonisation.”
In August the share price of Danish wind farm developer plummeted after the US halted its Rhode Island wind farm, while the British Tories and Reform parties are also attacking net zero.
Ana Toni met with King Charles and leaders of other COP summits at Clarence House last year. Pic: Reuters
But Ms Toni there is “nothing to panic [about], because we can see that the transition is inevitable,” citing major progress in China, India and Europe and Brazil.
Referring to the US’s withdrawal from the COP process, she said: “198 countries minus one is not zero. And we will put all our efforts of working with the 197 countries that want to go forward and want to protect their population.”
“Climate action is not only [still] cool, it is necessary,” Ms Toni said.
“We all need to face reality. We are going through a huge climate crisis… If you’re not part of the solution, you’re part of the problem. Companies understand that.”
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