U.S., Japan freeze aid over political crisis: Ranil Wickremesinghe

Vastavam web: Sri Lanka’s deposed Prime Minister Ranil Wickremesinghe said the United States and Japan had frozen more than a billion dollars of development aid after his abrupt dismissal raised doubts about the future of democracy in the island. The move to hold back project financing, along with the EU’s warning it could withdraw duty-free concessions for Sri Lankan exports if it didn’t stick to commitments on national reconciliation, will further strain the economy, Wickremesinghe told Reuters in an interview.

Rajapaksa is a former president who led the country to a military defeat of Tamil separatist guerrillas in 2009 but who has since faced widespread allegations of human rights abuse and targeting of Tamil civilians. Wickremesinghe, who has challenged his dismissal and vowed to remain prime minister until parliament voted him out, said there were international concerns about a government led by Rajapaksa. The United States has held off on a nearly $500 million aid programme for building of highways and improving land administration by the government-funded Millennium Challenge Corporation (MCC), Wickremesinghe said.

The Sri Lankan embassy in Washington has been informally told by the MCC that around $480 million will be on hold because of the latest situation in the country, a Sri Lankan foreign ministry official separately confirmed. An official at the Japan International Cooperation Agency said the agency was closely monitoring political developments and the railway project loan had been withheld.

The U.S. embassy in Colombo had no immediate comment when asked if Washington is taking any measures due to the Sri Lankan political crisis. The United States and the EU have urged the president to immediately summon parliament and let deputies decide who is to lead the country. Sirisena suspended parliament until Nov. 16 and has made no public statement on his plans. Wickremesinghe said his party will step up a public campaign for parliament to be called and he be allowed to prove his majority. “We are all contemplating alternative actions, this includes a big mobilisation of people. Ultimately this has to be decided in parliament.”