Thursday, December 1, 2022

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US grants $6 million in emergency assistance to avert SL’s economic crisis

Policymakers in Washington have stepped forward with a financial package that will not only provide desperately needed aid for ordinary Sri Lankans but help the U.S. meet some of its long-term strategic objectives in the Indo-Pacific.

The United States announced today that it will provide $6 million in emergency assistance to address the needs of marginalized and vulnerable communities impacted by Sri Lanka’s economic crisis. 

This new funding will also provide technical assistance to the Government of Sri Lanka as it implements economic and financial reform measures to stabilize the economy, in line with an anticipated International Monetary Fund (IMF) package, the US Embassy in Colombo said. 

“The U.S. is committed to supporting the Sri Lankan people as they face today’s economic and political challenges,” said Julie Chung, U.S. Ambassador to Sri Lanka. 

“As a longstanding development partner, we will continue to champion efforts that promote sustainable economic growth and good governance.”

This emergency funding through the U.S. government’s development arm, the U.S. Agency for International Development (USAID), responds to emerging or unforeseen complex crises overseas. 

Part of this funding will go to USAID’s social cohesion and reconciliation project (SCORE) to support small-scale agricultural productivity and microenterprises in communities that traditionally experience high poverty rates and are especially impacted by the crisis. 

This funding will also support public sector efficiency and resource management through USAID’s project to accelerate results in trade, national expenditure, and revenue (PARTNER).

The $6 million in new assistance is part of a much larger package of foreign assistance from the American people to meet the current need.  That support is part of a shared history that has seen the United States provide over $2 billion in economic and humanitarian support since 1956.  

The U.S. will continue to add to its significant ongoing investments and assistance projects in Sri Lanka to help meet the immediate and long-term needs of the people of Sri Lanka, the statement said.

Sri Lanka also presents an opportunity for the U.S. and India to work together to prevent the humanitarian crisis from worsening. One possible area of collaboration is food security.

Here, the U.S. and India can work together to identify what food products Sri Lanka urgently needs and what each can provide. Success here could be a template for the growing Quad partnership that includes Japan and Australia and lay the foundation for a potential Quad working group on food security.

Whatever help the U.S. ultimately gives, it should extensively publicize what it is doing to help Sri Lanka. In the past, U.S. policies have been derailed in Sri Lanka due to misinformation, such as a $480 million Millennium Challenge Corporation grant that was ultimately canceled by the U.S. after the Rajapaksa government said it did not want the funds.

Effective messaging about the help offered to Sri Lanka to alleviate the crisis would also set the U.S. up for a post-Rajapaksa-era, as American aid at a time like this will not be forgotten.

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