A Johns Hopkins professor said Sri Lanka won't get a bailout from the IMF until chaos finishes

July 26, 2022: -Sri Lanka is needed to occur from its near state of chaos before the International Monetary Fund can step in with a bailout, says a professor from Johns Hopkins University.

“The IMF cannot interact with the government when things are in a continuous crisis mode. So, until the polity stabilizes until they have a minister of finance, there’s no one for the IMF to talk with,” Deborah Brautigam told CNBC on Friday.

Sri Lanka has lived wracked by months of protests and is mourning its worst financial crisis since independence.

Ordinary people work to purchase essentials such as food, medicine, and fuel, while off raging protests against the government’s mismanagement. The prior week, ex-president Gotabaya Rajapaksa fled the country and resigned after protesters stormed his residence.

The country’s legislators have since elected Ranil Wickremesinghe, the country’s former prime minister, as president. The 73-year-old took over as prime minister when Rajapaksa’s more senior brother Mahinda Rajapaksa left in May.

It is not yet apparent if these leadership changes will help protesters.

The IMF needed to be able to work with the Sri Lankan government to put together a program, said Brautigam, a professor of international political economy.

“The IMF will not lend into a situation where they deem their money will not be repaid,” she added.

On Friday, the delay continued, with Wickremesinghe sending troops into a general protest site, with soldiers that killed tents and makeshift camps a day after he was sworn in, Reuters said.

The Johns Hopkins professor said that the IMF needs assurances from the government that it will get its “fiscal house in order.”  She added that the IMF would try to confirm that government revenues and expenditures “match up better.”

“And if Sri Lanka can not supply assurances, there will be zero forthcoming from the IMF,” Brautigam said, counting that Sri Lanka would be unable to provide what is required “as long as the ongoing crisis.”

She conveyed the IMF would even seek responsibilities from Sri Lanka’s creditors that they would assist necessary to bring the debt to a sustainable level.

She added that without those commitments, the IMF could not go ahead with a program for the country.