Sri Lanka IMF bailout; UK to look at ‘situation on the ground’

May 01, 2009 (LBO) – Britain will consider the ground situation of Sri Lanka’s conflict before backing an International Monetary Fund bailout, its foreign minister has told parliament, while the US is also leaning on the loan. Sri Lanka has asked for a 1.9 billion US dollar bailout which the island’s central bank says has reached an “advanced level of finalization”.

Parliamentary Pressure

UK foreign minister David Miliband, who visited Sri Lanka this week was asked repeatedly by British parliamentarians Thursday whether Britain would use the IMF loan to put pressure on Sri Lanka.

“In respect of the IMF, I think we are duty bound to look extremely carefully at the situation on the ground should any plan be presented by the IMF to the IMF board,” British foreign minister David Miliband told the House of Commons.

“It is a basic tenet of the work of the IMF that any money should be put to good use and that requires a very close look at the situation on the ground.”

Miliband said UK was concerned about civilians held as a human shield by the Tamil Tigers under “appalling conditions, under-nourished and in fear of their lives,” in a narrow coastal stretch in northeastern Sri Lanka where the guerillas