Watch | How India changed Sri Lanka's IMF story: Former FM reveals Sitharaman's behind the scenes role

Former Sri Lankan Finance Minister Ali Sabry has credited Indian Finance Minister Nirmala Sitharaman with turning the tide in Colombo’s favour during a crucial meeting with International Monetary Fund (IMF) representatives over Sri Lanka’s economic crisis.

Speaking about the negotiations that led to Sri Lanka’s IMF programme, Sabry said India’s support went beyond diplomatic goodwill. Sri Lanka was facing severe economic problems at the time, including foreign exchange shortages, high inflation and shortages of fuel and medicines.

India was among the first countries to provide emergency financial support to Sri Lanka during the 2022 crisis. It extended billions of dollars in credit lines to help the country meet essential import needs. Sabry said India’s early support sent a strong message to the international community about Colombo’s ability to pursue an economic recovery.

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Sabry recalls tense IMF talks

Sabry said he faced a difficult response when he travelled to Washington for discussions with IMF officials. He said the organisation’s regional directors remained doubtful about Sri Lanka’s ability to secure support.

“When I went to Washington, I had a meeting with the regional directors, and they were very negative about Sri Lanka. They said 16 times this has happened. I was disappointed. You know, for the first time, we are trying to tell different things. They were not willing to listen. I thought they lacked empathy,” he said.

Sabry was scheduled to meet IMF Managing Director Kristalina Georgieva and IMF Deputy Managing Director Gita Gopinath at 03.00 pm. Before that meeting, he met Sitharaman for lunch.

Sitharaman steps in before crucial meeting

Sabry said he told Sitharaman that his discussions with IMF officials had not gone well. He said she then assured him that she would speak to Georgieva before his meeting.

“In between this meeting, something happened. I had lunch with Nirmala Sitharaman. She asked me, Minister, how did the meeting go? I said, not that great. I said they were kind of reluctant and had a lot of issues. She said Don’t worry, I will meet Kristalina Georgieva before you. I will put a word,” he said.

Sabry said the atmosphere changed significantly when he later met the IMF leadership.

“When I went for the meeting with the IMF Managing Director, which is one of the most crucial meetings for me, the tone, the approach, the environment, everything had changed. Kristalina Georgieva told me that she had just finished a meeting with Nirmala Sitharaman, and 70-80% of the meeting was not about India, but Sri Lanka, he said.

Sabry said the episode became an important foundation for Sri Lanka’s economic recovery.