Sri Lanka presidential election: Anura Kumara Dissanayake vows not to scrap IMF deal

Marxist-leaning leader Anura Kumara Dissanayake, who grabbed an early lead in the presidential election in Sri Lanka, vowed on Sunday (Sep22) that he would not scrapthe country's unpopular four-year$2.9 billion IMF (International Monetary Fund) bailout agreement, but instead renegotiate it.

Dissanayake, 55, and his People's Liberation Front (JVP) will "not tear up" the IMF deal, party politburo member Bimal Ratnayake told the news agency AFP.

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"Our plan is to engage with the IMF and introduce certain amendments.We will not tear up the IMF programme. It is a binding document, but there is a provision to renegotiate," Ratnayake said.

Alteration of bailout programme

Ratnayake told AFP thatDissanayakehad pledged to reduce income taxes that were doubled by President Ranil Wickremesinghe and slash sales taxes on food and medicines.

"We think we can get those reductions into the programme and continue with the four-year bailout programme," the JVP politburo member further said.

Sri Lanka saw its first election since the economy buckled in 2022under a severe foreign exchange shortage, leaving the country unable to pay for imports of essentials likefuel, medicine and cooking gas.

Thousands of protesters marched in Colombo in 2022 and occupied the president's office and residence, forcing then-President Gotabaya Rajapaksa to flee and later resign.

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Buttressed by a $2.9 billion bailout programme from the IMF, the economy has posted a tentative recovery, but the high cost of living is still a critical issue for many voters.

Concerns expressed by Dissanayake's rivals

Dissanayake's rivals had raised fears thathis Marxist party would scrap the IMF programme and push the country back into an economic crisis similar to the chaos of 2022.

A report by the news agency Reuters earlier said that the winner of the election would have to ensure thatSriLankasticks with the IMF programme until 2027 to get its economy on a stablegrowth path, reassure markets, repay debt, attract investors and help a quarter of its people climb out of poverty.

(With inputs from agencies)