Recurrent IMF loans stymied all possibilities of diversifying the productive base of the Sri Lankan economy, leading to the current crisis.
The ongoing economic and political crisis in Sri Lanka has attracted global attention. A key factor in an explanation of the crisis is the history of the relationship between Sri Lanka and the International Monetary Fund (IMF). Between 1965 and 2016, Sri Lanka was the recipient of 16 IMF loans, each of which came with a set of conditionalities. However, mainstream observers carefully omit any mention of the IMF; they disproportionately discuss the current crisis around the so-called role of China even though Japan is a larger external lender to Sri Lanka than China.
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R. Ramakumar is an economist and a professor at the Tata Institute of Social Sciences.
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