THE United States and Japan has halted more than a billion dollars in development aid amid the country’s political crisis, deposed Prime Minister Ranil Wickremesinghe said.
The aid, he said, was frozen over doubts raised on the future of democracy in the South Asian country and could add strain to the economy, as the European Union was also looking to withdraw duty-free concessions for Sri Lankan exports if it failed to uphold its national reconciliation efforts.
Wickremesinghe, who has vowed to remain prime minister, said there were international concerns about a government led by newly-appointed Mahinda Rajapaksa.
“Countries are sensitive, they have concerns (about a government led by Rajapaksa) democratic countries have concerns,” he told Reuters.
Last month, Sri Lankan President Maithirpala Sirisena removed Wickremesinghe from his post after months of tensions that flared over economic policies and day-to-day administrative decisions.
The removal has sent shockwaves across the nation which has plunged the country into political turmoil.
Rajapaksa’s appointment is also a controversial one – the 72-year-old former president is accused of human rights abuse and targeting ethnic Tamil civilians during his rule, which saw the defeat of Tamil separatist guerrillas in 2009.
According to Reuters, Wickremesinghe said the US is holding off on a nearly US$500 million aid programme for on highway construction and a land administration programme led by the government-funded Millennium Challenge Corporation (MCC).
He said Japan is also halting plans to extend a soft loan of $1.4 billion for a light railway project.
A Sri Lankan official who spoke to Reuters confirmed that the embassy in Washington has been informally told by the MMC that around US$480 million would be on hold due to the current political situation.
“A lot of projects are held up, the Millennium Challenge, the Japanese loan,” he said.
The Japan International Cooperation Agency said the railway project loan had been withheld and it was closely monitoring political developments, according to an official.
Wickremesinghe has maintained that his dismissal is unconstitutional and has vowed to take the matter to court, apart from calling on legislators to vote against his successor’s appointment in parliament.
Sirisena has ordered the suspended parliament to reconvene on Nov 14.
Some parties, like the Tamil National Alliance (TNA), a party representing the Tamil minorities, said Rajapaksa’s appoint was “illegal” and has pledged to back Wickremesinghe’s bid to stay in power.
According to Al-Jazeera, the minority coalition has the support of 15 legislators in the 225-member parliament and could play a pivotal role in the vote of no-confidence against Rajapaksa. Both Rajapaksa and Wickremesinghe have gained the support of 100 politicians each.