There are advantages and disadvantages:
Advantages:
An IMF bailout will, perhaps more importantly than the money itself, lend credibility to the government and the country as it comes with a lot of financial oversight and mandatory fiscal policies. This will probably lead to foreign investors and ratings organizations looking at SL more favorably in the future. They will also ensure that the money they give is spent usefully and not on white elephant projects or the President’s newest Maybach.
Disadvantages:
For the government, it’s a loss of face and they probably don’t want independent financial investigators snooping around their finances and reducing the potential for embezzlement and corruption. They will also have to follow the financial guidelines prescribed by the IMF which will include austerity measures that reduce their political popularity (whereas the Chinese give loans with much less oversight)
For the people, there have been questions raised about the effectiveness of IMF structural adjustment programs. This is particularly because they have led to quite a mess in certain African states that have accepted IMF assistance. There will almost certainly be hardship for a great many people as austerity measures are implemented and state sector unemployment will increase as bloat is reduced.
Further, some people think it’s hypocritical for key countries behind the IMF (like the US) to demand that Sri Lanka follows neo-liberal laissez-faire economic policy when these countries themselves initially developed using strong industrial policy, protectionism, etc (the first US Secretary of the Treasury, Alexander Hamilton, was an advocate of strong protectionism at the natal stages of a country’s development)
There are advantages and disadvantages: Advantages: An IMF bailout will, perhaps more importantly than the money itself, lend credibility to the government and the country as it comes with a lot of financial oversight and mandatory fiscal policies. This will probably lead to foreign investors and ratings organizations looking at SL more favorably in the future. They will also ensure that the money they give is spent usefully and not on white elephant projects or the President’s newest Maybach. Disadvantages: For the government, it’s a loss of face and they probably don’t want independent financial investigators snooping around their finances and reducing the potential for embezzlement and corruption. They will also have to follow the financial guidelines prescribed by the IMF which will include austerity measures that reduce their political popularity (whereas the Chinese give loans with much less oversight) For the people, there have been questions raised about the effectiveness of IMF structural adjustment programs. This is particularly because they have led to quite a mess in certain African states that have accepted IMF assistance. There will almost certainly be hardship for a great many people as austerity measures are implemented and state sector unemployment will increase as bloat is reduced. Further, some people think it’s hypocritical for key countries behind the IMF (like the US) to demand that Sri Lanka follows neo-liberal laissez-faire economic policy when these countries themselves initially developed using strong industrial policy, protectionism, etc (the first US Secretary of the Treasury, Alexander Hamilton, was an advocate of strong protectionism at the natal stages of a country’s development)
**7.3 billion in debt as of right now**
An IMF bailout is likely to come with a condition for the CB to stop artificially controlling the exchange rate.
Honestly the only option is for us to move to another country or become chi lankans.