Lanka moves to reduce its trade surplus with US

Lanka moves to reduce its trade surplus with US

By Sunimalee Dias and Tharushi Weerasinghe

Sunday Times LK 13-04-2025

Govt. explores plans to minimise tariffs’ impact on economy; looks for new markets; exporters welcome 90-day pause

Sri Lanka is among the countries currently facing a 90-day pause on the new tariffs—as announced by US President Donald Trump on Wednesday—and is trying to work out a plan to reduce the trade surplus in its favour by increasing imports from the US amidst possible duty cuts.

The government will also look for new markets in India, China, Europe and several other countries as a way to circumvent the newly imposed US tariffs on Sri Lankan exports, a Finance Ministry source said.

This will be in addition to talks with US authorities to reduce the 44% tariff on Sri Lanka’s exports while also exploring ways in which the government can help exporters to ease the tariff burden on them.

Sri Lanka also plans to appeal to the US government to extend the 90-day pause for six months while sending a delegation for talks. President Trump announced on Wednesday a 90-day pause for countries hit by US tariffs, except China, but the universal reciprocal tariff of 10%” will continue on all countries, including Sri Lanka.

“We have a short period to take measures to offset the impact of the tariff hike of 44%, but we will have to deal with the impact of this in the long run, so we are looking at several options,” the official said.

Among the alternate markets for Sri Lankan exports that are being looked at are India, China, Malaysia, Indonesia and EU nations, the official said.

This would be in addition to discussion with the US to see how the tariffs could be slashed further, he added.

Most exports, including garments, tea and gems, will be impacted by the tariffs, he added.

At present Sri Lanka imports animal feed, pharmaceutical products, electrical and electronic products, yarn, plastic products, chemical products, meat/fish and dairy products, telephone sets, audio-video equipment and parts, woven fabrics, paper and paper products, motor vehicles and parts, cereals and its products, automatic data processing machines, switches, boards and panels, unmanufactured tobacco, aircraft and parts, soap, washing preparations, waxes, candles, base metal products, and paints, varnishes and dyeing extracts, among others.

According to trade officials, the highest duties imposed on US goods are vegetables, fruits and nuts (38.3%); food products (35.9%); leather producers (32.6%); rubber and plastic goods (28.8%); and vegetable oils and fats (25.8%). Soybean meal as animal feed was the largest import, worth US$140.66 million in 2024, according to official data, while the second largest import from the US was pharmaceutical products, which incidentally is a tax-free import.

Officials said that while Sri Lanka imports stocks of animal feed from the US, local authorities are looking at improving local production and finding other cheaper sources. There is no impact on pharmaceutical imports from the US, as they are duty-free, but the pharmaceutical industry has been trying to increase local production, thereby reducing imports and saving foreign exchange.

The trade volume between the two countries was estimated at $3.4 billion in 2024, with US exports to Sri Lanka reaching $368.2 million, while Sri Lanka’s exports to the US reached $3 billion, with the surplus of $2.6 billion in favour of Sri Lanka. The US is the largest export market for Sri Lanka, accounting for 27% ($3.0 billion) of the country’s total exports ($12.8 billion) in 2024.

The Institute of Policy Studies, an independent think tank, in a recent report says if one ignores VAT, subsidies, and exchange rate interventions, reciprocity can be simplified to import tariffs and para-tariffs. Sri Lanka has general customs duties, an Export Development Board CESS, excise duty, Port and Airport Development (PAL), and a Social Security Contribution Levy (SSCL). Once the product-level tariff rates are calculated on an ad valorem basis, Sri Lanka has a higher tariff rate than the US for almost all sectors. It suggested phasing out para-tariffs and tightening trade relations as one of the measures to overcome the crisis.

Meanwhile, the US pause was welcomed by industry leaders.

The Joint Apparel Association Forum (JAAF) commended the government for swift negotiations with the US. JAAF credited the administration’s efforts for likely securing Sri Lanka’s inclusion in the 90-day reprieve.

“This pause provides critical breathing space,” a JAAF spokesperson noted, emphasising the importance of sustained engagement to secure longer-term trade concessions.

Central Bank officials said the committee tasked with managing the fallout from the tariffs had yet to finalise recommendations. As talks continue, the government is expected to intensify efforts to solidify a permanent, favourable trade arrangement with Washington.

Meanwhile, a previously called all-party conference went ahead as planned on Thursday, chaired by President Dissanayake. It was held following a request made by 12 opposition party leaders to meet the president for a discussion on the matter.🔺

Modi’s Colombo Mission: Security, Energy, and a Strategic Reset

Modi’s Colombo Mission: Security, Energy, and a Strategic Reset

Ceylon Today -April 11, 2025 

By Sulochana Ramiah Mohan

Indian Prime Minister Modi’s fourth visit last week expressed his commitment to safeguarding the national interests of both India and Sri Lanka, particularly in the security and energy sectors. This agreement comes after nearly four decades of strained relations, stemming from India’s intervention during Sri Lanka’s civil war in the late 80s. The visit showcased India’s concerted efforts to reset its strategic influence in Sri Lanka, a country whose leadership, until recently, had shown resentment towards India.

Modi arrived in Colombo directly from Thailand, accompanied by senior officials, including Minister of External Affairs S. Jaishankar, National Security Adviser Ajit Doval, the Foreign Secretary, and other key government representatives. Modi’s arrival marked a shift, with the NPP Leader offering India what it sought, while securing Sri Lanka’s own priorities, and ultimately concluding as strategic partners.

Indian security takes charge of PM Modi’s safety

Prime Minister Modi came to ink strong defence and bilateral agreements with Sri Lanka, accompanied by prominent members of his Office, which he always used to do. But the large Indian security contingent is particularly noteworthy this time. The security detail, which accompanied him throughout his stay and ensured his protection until his departure on Sunday, evoked strong memories of previous Indian leaders’ visits to Sri Lanka that took place some decades ago. The heightened security measures were most noticeable in Colombo and along the routes leading to Anuradhapura, with widespread road closures and a considerable deployment of personnel, including Indian commandos, members of the Tri-Forces and several intelligence officers who had arrived ahead of his visit.

The unprecedented security measures sent a clear message. The scale of the security presence was crucial for Modi, given his prominent role in global politics and his importance as a regional leader. At the same time, the Janatha Vimukthi Peramuna (JVP), a party rooted in leftist ideology that had historically struggled to gain popular support and once maintained a contentious stance towards India, may have contributed to the heightened security, suggesting a lingering trust deficit that India has towards the current ruling party. However, defying expectations, the Dissanayake-led Government redefined its relationship with India over the two-day visit and expressed its commitment to embracing closer ties with New Delhi.

The chemistry between the two leaders were indeed good, creating a positive atmosphere. Modi, with his father-figure persona, has attracted many leaders, including US President Donald Trump. This bond with Sri Lanka marks a new chapter in Sri Lanka-India ties, one better defined by strategic alignment rather than ideological division or past discord.

The Indian security presence in Sri Lanka under Modi’s leadership can also be attributed to escalating gun violence, a series of murders—some involving Army deserters—brutal attacks by gangsters, and ongoing security lapses related to the 2019 Easter Sunday attacks, which Sri Lanka is still struggling to resolve. India, which had tipped off Sri Lanka about the attacks, has yet to see the culprits brought to justice, as sought by the victims’ families. This may have prompted India to adopt a calculated and cautious approach too.

Several regional leaders have visited Sri Lanka in the past, but the level of intense security surrounding Prime Minister Modi’s visit was unprecedented. Even during Sri Lankan President Anura Kumara Dissanayake’s visit to India last December, security arrangements were far more routine and low-key in comparison. Modi’s two-day visit to Sri Lanka was widely discussed, particularly for the heavily guarded motorcade, which included Indian commandos and personal security officers, all managed by India’s own security command.

Notably, factions such as the Janatha Vimukthi Peramuna (JVP), historically opposed to Indian involvement in Sri Lanka, have been a concern for Indian security agencies till late. The JVP’s past confrontations with Indian forces and its alignment with Chinese interests could have also added to this Indian security dynamics.

In light of these complexities, India also deployed four Mi-17 helicopters as part of the Prime Minister’s convoy in Sri Lanka, accompanied by about 100 Indian Air Force personnel. Additionally, the Indian Naval Ship (INS) Sahyadri, a 143-metre frigate manned by a crew of 320, was docked in Colombo, coinciding with Modi’s State visit. During their visit, the crew of INS Sahyadri participated in events hosted by the Sri Lanka Navy aimed at strengthening bilateral ties, the Indian Government said.

Strict security measures were in place in both Colombo and Anuradhapura. A large contingent of Police and STF personnel was deployed for security and traffic control.  

Anti-India sentiments

It’s important to draw a parallel to a significant incident in 1987, when the late Prime Minister of India, Rajiv Gandhi, visited Sri Lanka. During that visit, Sri Lanka Navy sailor Vijitha Rohana Wijemuni attempted to strike Gandhi with a Lee–Enfield rifle during a guard of honour. Although Gandhi ducked and the rifle made contact, he was not seriously injured. This incident became a major diplomatic embarrassment for both Sri Lanka and India, leaving a lasting stain on Indo-Sri Lankan relations. In contrast, Modi’s visit was carefully orchestrated—he was kept at a distance during the guards of honour, meeting only the Army and Air Force guards in Colombo and Anuradhapura, while the Sri Lanka Navy was notably absent. This absence is significant, especially considering the ongoing confrontations between the Sri Lanka Navy and Indian fishermen at sea, which have repeatedly angered the Indian Government. Alleged assaults have prompted India to summon the Sri Lankan Envoy in New Delhi in the recent past to express its displeasure.

In light of such past events, Modi’s security detail in Sri Lanka was exceptionally stringent. Reports indicate that nearly 6,000 Sri Lanka Police officers, including specialised units, were deployed to ensure his safety during the visit. 

NPP aligning as a strategic partner of India

Perhaps most striking was the NPP Government’s apparent shift in stance, as it extended a warm welcome to the Indian Prime Minister. This gesture is particularly significant given the JVP’s historical opposition to India’s involvement in Sri Lanka’s internal affairs. In the 1980s, the JVP-led campaigns against the Indo-Lanka Accord, which led to the deployment of the Indian Peace Keeping Force (IPKF) in Sri Lanka. Their past actions included anti-India propaganda, strikes, and boycotts of Indian goods, all of which reflected deep-seated nationalist sentiments.

This shift in the JVP’s approach has contributed to a broader political realignment, with many local political parties now viewing ties with India as crucial for Sri Lanka’s growth. Recently, the JVP has moderated its previous anti-India rhetoric, adapting to changing regional dynamics. Under Dissanayake’s leadership, the Party has softened its stance, recognising the need to adjust to the prevailing geopolitical landscape.

Resetting friendship

The warm reception extended to Modi and his team not only reflects the JVP’s evolving political strategy but also highlights the changing landscape of Sri Lanka’s foreign policy, gearing for cooperation and engagement with neighbouring countries.

In an interview with Ceylon Today prior to their victory in both the Presidential and General Elections last year, NPP’s Vijitha Herath, then campaigning for election, made a strong statement: “Without India’s support, or bypassing India politically or economically, little can be achieved by Sri Lanka,” he added.

President Dissanayake had to reset his relationship with India, and he successfully aligned with Modi and his team, overcoming past tensions. The message was clear when he spoke at the official dinner reception held at the President’s official residence in Colombo for the Indian leader. He said Modi has demonstrated his recognition of Sri Lanka’s deep-rooted connection with India, highlighting the strong ties between the two nations over the past four years. He also praised Modi not only as a regional leader but also as a major player in global geopolitics.  

Further emphasising the importance of India’s rise as a global power, President Dissanayake stated that Sri Lanka wholeheartedly welcomes this development. “We always offer a warm welcome to guests visiting Sri Lanka, and our friends across the Palk Strait are particularly close to our hearts,” the President recalled. He added that Sri Lanka, with its warm and welcoming people, looks forward to even more visits from India, affirming that the country is always eager to say, “Come again.”

Defence pacts

Before Modi’s departure, both leaders signed an MoU on defence cooperation, marking a major step in strengthening bilateral ties. The agreement outlined key areas of defence collaboration, starting with an institutionalised defence pact. It establishes a structured framework for military engagements, which includes joint exercises, maritime surveillance, capacity building, and humanitarian assistance operations. This structured approach ensures ongoing collaboration and helps maintain a robust defence relationship between the two countries. It was stated that the defence pact is valid for five years and can be terminated at any time with three months’ notice. The Sri Lankan Cabinet has given its approval.

Another significant aspect of the MoU is Defence industry collaboration, which opens avenues for cooperation in the defence industrial sector. This includes support for defence equipment and training opportunities for Sri Lankan officers at Indian institutions. Such collaboration is expected to enhance Sri Lanka’s defence capabilities while further strengthening ties between the two nations.

The pact also emphasises port calls and maritime security, highlighting increased Naval port calls and enhanced cooperation in maritime security. India will monitor Sri Lanka’s Exclusive Economic Zone (EEZ) as China competes for mineral resources, as noted by senior defence journalist Ajay Banerjee, who spoke on Modi’s visit to Sri Lanka and the security pact. He also mentioned that, following the 2008 Mumbai attacks, India installed a coastal chain of radars in Sri Lanka, which is linked to India’s network to monitor the Indian Navy’s activities in the Indian Ocean. This system provides real-time information to India, enabling a rapid response in times of crisis. With the new security pact, India has stated that it will send any number of Naval ships to Sri Lanka and its EEZ.

Additionally, there is a maritime rescue centre in Colombo, funded by the Indian Government. In 2023, the last Chinese research ship docked in Colombo, prompting vehement protests from India, leading to a ban on such vessels entering Sri Lanka. India also converted loans into grants to assist Sri Lanka during its financial instability.

When asked about a potential shift in foreign policy under the Dissanayake Government, Banerjee acknowledged that such a shift is indeed taking place. Given the strategic importance of the Indian Ocean for regional stability, both countries recognised the necessity of strengthening their maritime security cooperation to address shared concerns.

Moreover, President Dissanayake reassured India that Sri Lanka’s territory would not be used in ways that could undermine India’s security.

The defence agreement is also viewed as a strategic move to counter China’s influence in Sri Lanka. India aims to balance this influence while ensuring regional stability. The defence pact also covers energy, digital infrastructure, and economic collaboration. Notably, a trilateral agreement between India, Sri Lanka, and the UAE seeks to develop Trincomalee as an energy hub. Additionally, the two countries have agreed to undertake renewable energy projects, including solar plants and rooftop systems for religious centres.

Partners in the end

Modi’s visit is seen as a necessity for the NPP to align with India, as well as a continuation of diplomatic ties and the strengthening of relations under India’s ‘Neighbourhood First’ policy. Sri Lanka awarded India’s highest civilian honour, the Mitra Vibhushana medal, in recognition of Modi’s contributions to bilateral relations.

During Modi’s last visit, he visited the Nallur Temple in Jaffna to seek blessings, and this time, he paid a visit to the Anuradhapura Sri Maha Bodhi. He also announced that India would assist in the renovation of the highly revered Thirukoneswaram Temple in Trincomalee. This gesture of respect seems to strike a well-balanced tone that both Buddhism and Hinduism have their roots in India. Additionally, the Ram Setu (Rama’s Bridge) holds religious significance in both countries.

After concluding his Sri Lanka visit, Modi flew to Tamil Nadu from the Anuradhapura Air Force Base to inaugurate the highly advanced, AI-operated Pamban Bridge. He praised the strong historical and cultural connection between Sri Lanka and India, especially the Ram Setu. The Sri Lankan Government gazetted the Anuradhapura Air Force Base—a domestic airport—as an international airport for a single day, Saturday, 5 April, to facilitate the departure of Indian Prime Minister Modi in a helicopter along with three other helicopters carrying Indian security personnel.

Upon his arrival in Tamil Nadu, an impressive security detail of 3,500 Police personnel was deployed for Modi’s protection on land. Additionally, 300 Tamil Nadu Coastal Police officers were stationed on boats offshore, along with two outer layers of security provided by the Coast Guard and the Indian Navy.

So, the JVP-led NPP Government seems to have learned—perhaps at the right time—what psychologists might call a “Freudian slip” in the realm of politics: they went full-scale with anti-Indian rhetoric during their campaign for power, failing to distinguish between local politics aimed at the gallery and broader geopolitical realities. While the anti-India campaign may have helped them gain victory, Modi ‘changed the course of action’.

The final shot couldn’t have been called by India alone—not when the US, the IMF, and like-minded governments are also in the picture. Together, they appear to have tamed the NPP, nudging it away from its confrontational stance. In many ways, it’s a calculated effort to preserve the traditional style of politics and ensure regional stability. However, the true test will be how long the NPP continues to align with India, as the ‘dragon’ remains ever-present, ready to slither in.ℹ

U.S., Iranian officials meet face-to-face, briefly; plan more talks

 

U.S. Middle East envoy Steve Witkoff, left, and Iranian Foreign Minister Abbas Araghchi. (Evelyn Hocksteinamer Hilabi/AFP/Getty Images)

Negotiations over the future of Iran’s nuclear program start amid escalating regional tensions and a growing U.S. military presence.

The Washington Post April 12, 2025 

By Susannah George

MUSCAT, Oman — Officials from the United States and Iran met face-to-face Saturday, albeit briefly, to launch high-stakes negotiations over the future of Iran’s nuclear program, the first serious engagement between the two countries in a decade.

Trump’s Middle East envoy, Steve Witkoff, and Iranian Foreign Minister Abbas Araghchi “briefly spoke in the presence of the Omani foreign minister,” after meeting separately with mediators for just over two hours, Iranian state-run media reported. The sides are set to hold further talks next week.

Following months of escalating rhetoric between Washington and Tehran, the meeting in the Omani capital seemed to ease regional tensions. The White House called it “a step forward in achieving a mutually beneficial outcome.”

“These issues are very complicated,” the White House said in a statement. It described discussions so far as “very positive and constructive.”

Omani Foreign Minister Badr Albusaidi, who mediated the talks, said they occurred “in a friendly atmosphere conducive to bridging viewpoints.” He hoped the meeting would “begin a process of dialogue and negotiations with the shared aim of concluding a fair and binding agreement,” he said in a post on X.

“It went as well as it could have gone,” said Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft in Washington. “After having this first real exchange, both sides will now go back and determine where their red lines are.”

The purpose of the talks Saturday, Parsi said, was to “try to figure out what is feasible what is not feasible.” Now negotiations will enter a more complicated phase, in which the sides will address the more technical elements of a potential deal.

Trump has said that he would prefer to reach a deal that would prevent Iran from developing nuclear weapons but that if no agreement can be reached, the use of military force remains on the table.

The talks are occurring against a backdrop of escalating rhetoric and the buildup of U.S. military assets in an increasingly volatile region. Israel continues to wage war against Hamas in Gaza, and the United States has expanded a campaign of airstrikes against the Houthis in Yemen. Hamas and the Houthis are both allies of Iran.

U.S. officials have assessed that Israel plans to strike Iran’s nuclear program this year to deter Tehran from developing a weapon. If the United States is unable to reach a deal with Iran, the likelihood of such a strike is expected to increase.

The Pentagon has bolstered the U.S. military presence in the region in recent weeks, adding a second carrier strike group, B-2 bombers and F-35 combat jets to defend U.S. bases and beefing up Patriot antimissile batteries.

While the negotiations appeared to be off to a positive start, the distrust between the sides remains deep. It was Trump who walked away from the 2015 Iran nuclear deal and imposed crippling sanctions on Tehran. Trump ordered the 2020 drone strike that killed Gen. Qasem Soleimani, the widely admired commander of Iran’s clandestine Quds Force.

The sides appeared to acknowledge that distrust when they set low expectations going into the meeting on Saturday. Araghchi said he saw “a chance to reach a preliminary agreement to find a path for negotiations,” according to Iranian state-run media.

Trump said the sides would meet without mediators, but Iran insisted the first round of talks be “indirect.” The Iranian and U.S. teams were “seated in separate rooms” while Albusaidi, the Omani foreign minister, conveyed their “points of view and positions,” Iranian Foreign Ministry spokesman Esmaeil Baqaei said on social media.

Araghchi, a veteran diplomat who helped negotiate the 2015 agreement, said the Iranian team will now “study what was discussed in this round” and hold consultations ahead of the next round of talks.

“This is not going to be easy and needs great determination on both sides,” the foreign minister said. “In the next session we are going to enter the general frameworks of a possible agreement.”

Witkoff has no formal experience in diplomacy, but as a member of Trump’s inner circle, he has quickly developed trust with key U.S. allies in the region. He is also representing the United States in talks to end the war in Ukraine and to free the Israeli hostages in Gaza. Before arriving in Oman, he was in St. Petersburg meeting with Russian President Vladimir Putin.

The deal the Trump administration is seeking is unclear. Officials in Tehran have said they’re open to greater restrictions on uranium enrichment and more transparency for international inspections. In return, Iran is seeking relief from nuclear-related sanctions.

Years of sanctions have crippled Iran’s economy. Corruption, mismanagement and sanctions have triggered an economic crisis and runaway inflation. Iran’s currency last month hit a record low: 1 million rials to the dollar.

Iran insists its nuclear program is for civilian purposes, but it has dramatically expanded the enrichment of uranium to near weapons-grade, the International Atomic Energy Agency reported in February. Israeli Prime Minister Benjamin Netanyahu has called for Iran’s nuclear program to be completely dismantled.

The sides might also broach Tehran’s support for armed groups in the region and the country’s domestic missile production program. Trump’s Arab allies in the Persian Gulf were disappointed that the nuclear deal negotiated under the Obama administration didn’t address those concerns. But it is unclear whether Trump will prioritize them this time around while operating on a tight deadline.

Pressure will only be building on the Trump administration to reach a deal in the coming months before a so-called snapback deadline expires in mid-October. Without a new agreement, the European parties to the 2015 deal are expected to impose further sanctions on Iran, a move Iran could respond to by expelling nuclear inspectors and pulling out of the global treaty that forbids nonnuclear states from developing weapons.

Supreme Leader Ayatollah Ali Khamenei, who has the final say on all key policy matters in Iran, has warned repeatedly against negotiating with the United States, and he appeared to hold that line ahead of the meeting in Oman. An editorial published on Khamenei’s website Friday cautioned the Iranian people against “getting too optimistic about these talks.”

Khamenei has allowed the government of Iranian President Masoud Pezeshkian to explore the possibility of a deal, but he has continued to use his public statements to criticize the United States. “Experience has shown that the Americans, due to their arrogant and bullying spirit and character, are not willing to negotiate and reach a fair agreement,” the editorial stated.🔺

Argentina secures $20bn IMF deal by relaxing currency controls

Fund to give unusually large upfront transfer to libertarian President Javier Milei

Argentina secures $20bn IMF deal by relaxing currency controls Fund to give unusually large upfront transfer to libertarian President Javier Milei 

 Pic: Argentina is already the IMF’s largest debtor, owing more than $40bn for its most recent programmes in 2018 and 2022 © Tierney Cross/AFP via Getty Images 

Ciara Nugent in Buenos Aires 

FT Published YESTERDAY 11-04-2025

Argentina has agreed to relax its strict currency controls as part of a $20bn loan from the IMF, as pressures mount on libertarian President Javier Milei’s plan to revive the economy. 

 The country’s central bank on Friday said it would lift the controls, which limit the movement of dollars outside of Argentina, for individuals while maintaining some restrictions for companies. 

 It will also partially float the peso’s official exchange rate, allowing it to fluctuate between 1,000 and 1,400 pesos to the dollar, compared with 1,108 pesos to the dollar today. This replaces a controversial policy that has strengthened the peso dramatically in real terms by devaluing the currency just 1 per cent a month despite much higher monthly inflation. Economy minister Luis Caputo denied the change constituted a devaluation of the peso, something he has long pledged to avoid. 

He said the IMF would on Tuesday transfer an initial $12bn to Argentina, and another $2bn in June, which would be used to replenish the central bank’s nearly empty hard currency reserves and calm volatile markets. “It’s true that such a large first disbursement is unprecedented, but it’s also unprecedented for a country to have fulfilled all of [the fund’s fiscal demands] in one year,” Caputo said. 

 The IMF’s board confirmed approval of the deal late on Friday, while the World Bank and Inter-American Development Bank announced separate funding packages worth $12bn and $10bn respectively. 

 The IMF deal, the 23rd for Argentina, a serial defaulter, had become increasingly urgent for Milei. While the former economist has curbed severe inflation, eliminated a chronic fiscal deficit and ended a recession, he has been unable to lift Argentina’s strict currency controls or rebuild the central bank reserves needed to prop up the peso and pay debts. 

 Pic: Javier Milei has managed to curb runaway inflation but has failed to lift Argentina’s strict currency controls or rebuild central bank reserves © Tomas Cuesta/Getty Images

That has left Argentina vulnerable to the need for an abrupt official devaluation, which could reignite inflation and hurt Milei’s support ahead of October midterm elections. 

The market turmoil caused by US President Donald Trump’s tariffs has heightened that risk, hitting Argentine assets as well as prices for its soya and oil exports. The central bank has been forced to spend $2.5bn to sustain the peso in less than a month, while the currency’s black market exchange rate has weakened sharply since early March, doubling the closely watched gap with the official rate, to 24 per cent. 

 The change in currency strategy, which has been a major tool to reduce price pressures, would “at the very least force the government to accept a pause in its bid to bring down inflation, which has been its main political narrative”, said Fabio Rodriguez, a director at Argentine financial consultancy M&R Associates.

 “They will need to explain that to voters.” Progress against inflation has been slowing. The monthly inflation rate rose to 3.7 per cent in March compared with 2.4 per cent in February, the national statistics agency said on Friday, far above economists’ forecasts, though seasonal factors contributed. 

 US Treasury secretary Scott Bessent is set to visit Argentina on Monday, in an apparent show of support for Milei from Trump, a close ideological ally who had some sway in negotiations as leader of the IMF’s largest stakeholder. China also offered relief on Thursday by renewing a $5bn tranche of its $18bn currency swap with Argentina’s central bank, a credit line that makes up most of Argentina’s hard currency reserves. 

The Trump administration said this month it wanted the swap to “end”. 

Pic:  US Treasury secretary Scott Bessent will visit Argentina on Monday in a show of support from the Trump administration © Kayla Bartkowski/Getty Images

Argentina is already the IMF’s largest debtor, owing more than $40bn for its most recent programmes in 2018 and 2022, which failed to stabilise the economy. 

 But fund director Kristalina Georgieva said earlier this month that Milei’s performance had “earned” him a large disbursement — a reference to his feat of slashing spending by 5 per cent of GDP in his first year. 

 A deal that offered “clarity on the exchange rate” should unlock more private investment for Argentina, said Malcolm Dorson, head of emerging markets strategy at Global X ETFs. “Investors have been rightly concerned about the currency policy, so this opens the doors for corporates to start putting money into the country again, which would make Milei’s plan sustainable.”🔺

Argentina and the IMF: a troubled history

Leftwing groups demonstrate in Buenos Aires last month against a debt deal with the IMF © Alejandro Pagni/AFP/Getty

 Argentina and the IMF: a troubled history

Reuters By Lucinda Elliott April 12, 2025

• Summary

• Argentina has secured a new $20-billion IMF loan program
• Deal number 23 is designed to help stabilize economy
• IMF unpopular in Argentina, its biggest debtor

April 11 (Reuters) - In December 1958, Argentina, battling inflation and weak reserves, agreed a $75-million loan, opens new tab with the International Monetary Fund, its first deal with the Washington-based lender in a record 23 programs totalling $177 billion in agreed funds.

On Friday, Argentina got the green light from the IMF board for a new $20-billion program. It is already the IMF's largest debtor, by far, and the recipient of the most IMF bailouts in history since it joined in September 1956.

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The latest program may help Argentina pull itself out of one of its worst economic crises: triple-digit inflation, foreign currency reserves in the red, tight currency controls to protect the peso, and the tail-end of a recession.

But the two sides have a complex and mottled history, increasingly entwined after a $57-billion deal in 2018 and a $44-billion program in 2022 to help roll over payments from the previous program that failed to halt an economic slide.

Many in Argentina blame the IMF for exacerbating a historic crisis in 2001 and 2002 by pushing tough austerity on a country already suffering, and protests in Buenos Aires often feature placards criticizing the lender.

"All past experiences with the IMF in our country have been terrible," leftist lawmaker Myriam Bregman told Reuters during a recent street protest led by pensioners reeling from spending cuts by the libertarian government of President Javier Milei.

"Many Argentines will not be able to retire," Bregman added.

Governments across the political spectrum have been forced to go to the IMF over the years to seek help in battling regular fiscal deficits, stubbornly high inflation and inefficient economic production pushing Argentina into cyclical crises.

The lender has recognized, opens new tab its own shortcomings in dealings with Argentina, saying its policies failed to achieve the proposed objectives.

Milei, and investors, hope this time will be different. The president, a former economist and political outsider, has already made huge cuts to spending.

That contributed to a rare fiscal surplus last year, even before any demands from the IMF, which usually insists that loan programs be linked to economic reforms and targets.

Milei's measures have helped stabilize the economy, cut inflation and restore some confidence in markets, and he says they are tougher than what the IMF would seek.

Economic growth, employment and the poverty rate, which took a massive hit after he took office in late 2023, have also started to improve.

Argentina has now agreed 23 loan programs with the IMF in its history, a record

BOOM-AND-BUST

A major exporter of soy, corn and beef, Argentina was one of the world's wealthiest countries per capita a century ago, but fell prey to a boom-and-bust cycle that has seen it regularly return to global lenders, including the IMF and the Paris Club, plus swap lines with the People's Bank of China.

It has also had a complex relationship with private lenders. It carried out a major bond restructuring in 2020 to avoid a messy default, in the shadow of non-payments hanging over it from an economic crisis in the early 2000s.

Argentina took multiple loans from the IMF each decade from the 1950s to the 2000s.

There was then a 15-year hiatus until a record $57-billion bailout in 2018 under conservative President Mauricio Macri that ultimately failed to put South America's second-largest economy back on its feet.

That failed program was replaced in 2022, agreed by the then left-leaning Peronist government, to restructure some $44 billion owed from the previous program.

On the streets of Buenos Aires, residents had mixed feelings towards the new program.

"When someone says yes to a loan, it's positive because it means they trust you," said 56-year-old Pablo Inzua. But he warned the country had been burned before by taking on too much debt.

Maria Del Valle Romano, a 68-year-old retiree, said she was entirely against it.

"I don't like it," she said. "When Macri was in government, he already went into debt for I don't know how many billions, now this one for another bunch of billions. How much more debt is this president going to get us into?"

Washington-based analyst Nicolás Saldías at the Economist Intelligence Unit said, unlike previous presidents, Milei's commitment to market reforms and fiscal balance meant that this time Argentina could implement and stick to the terms.

"Milei is more IMF than the IMF - he doesn't come empty-handed and has more than satisfied many of the Fund's conditions," he said.🔺

Reporting by Lucinda Elliott in Montevideo; Editing by Rosalba O'Brien and Clarence Fernandez

அதிமுக - பாஜக, கூட்டணி வரலாறு

2026 சட்டமன்றத் தேர்தலில் அதிமுக - பாஜக இடையே கூட்டணி

விஜயானந்த் ஆறுமுகம் பிபிசி செய்தியாளர்

தமிழ்நாட்டில் 2026 சட்டமன்றத் தேர்தலில் அதிமுக - பாஜக இடையே கூட்டணி உடன்பாடு ஏற்பட்டுள்ளதாக வெள்ளிக்கிழமையன்று (ஏப்ரல் 11) சென்னையில் மத்திய உள்துறை அமைச்சர் அமித் ஷா அறிவித்தார்.

'கூட்டணி தொடர்பாக எந்த நிபந்தனையையும் அதிமுக முன்வைக்கவில்லை' எனவும் அவர் செய்தியாளர் சந்திப்பின்போது தெரிவித்தார்.

'ஒளிமயமான எதிர்காலத்தை அதிமுக - பாஜக கூட்டணி உருவாக்கும்' என தனது எக்ஸ் பக்கத்தில் அ.தி.மு.க பொதுச்செயலாளர் எடப்பாடி பழனிசாமி பதிவிட்டுள்ளார்.

அதிமுக - பாஜக, கூட்டணி வரலாறு

(1998 முதல் 2025 வரை: தமிழ்நாட்டில் அதிமுக - பாஜக 'இயல்பான' கூட்டணி கடந்து வந்த வரலாறு)

நித்யா பாண்டியன் பிபிசி தமிழ், சென்னை 11 ஏப்ரல் 2025

தமிழ்நாட்டில் நடைபெற இருக்கும் 2026-ஆம் ஆண்டு சட்டமன்ற தேர்தலில் தேசிய கட்சியான பாரதிய ஜனதா எந்த கட்சியுடன் இணைந்து போட்டியிடும் என்ற எதிர்பார்ப்பு அரசியல் வட்டாரத்தில் மிக முக்கியமானதாக பார்க்கப்பட்டது.

பாஜகவின் மாநிலத் தலைமை மற்றும் அதிமுக தலைமைக்கும் இடையே நிலவிய கருத்து வேறுபாடு காரணமாக இவ்விரண்டு கட்சிகளும் 2024-ம் ஆண்டுக்கான நாடாளுமன்ற தேர்தலை சேர்ந்து சந்திக்கவில்லை.

இப்படியான சூழலில், பாஜக மூத்த தலைவரும் உள்துறை அமைச்சருமான அமித் ஷா இரண்டு நாள் பயணமாக ஏப்ரல் 10 அன்று தமிழ்நாடு வந்தார். ஏப்ரல் 11 அன்று அதிமுக தலைமையை நேரில் சந்தித்து, மீண்டும் அதிமுக - பாஜக கூட்டணியை உறுதிப்படுத்தினார்.

''இந்த கூட்டணி 1998-ஆம் ஆண்டில் இருந்தே இருக்கும் கூட்டணிதான். தொடர்ச்சியாக பல தேர்தல்களை சேர்ந்தே சந்தித்தோம்'' என கூட்டணியை உறுதிப்படுத்திய பின்னர் அமித் ஷா கூறினார்.

ஆட்சியைக் கவிழ்த்த கூட்டணி

முதன்முறையாக இவ்விரண்டு கட்சிகளும் 1998-ஆம் ஆண்டு சேர்ந்து நாடாளுமன்ற தேர்தலை எதிர்கொண்டன. அந்த தேர்தலில் பாஜக 24 கட்சிகளுடன் கூட்டணி அமைத்திருந்தது குறிப்பிடத்தக்கது. தமிழ்நாட்டில் 18 தொகுதிகளில் அதிமுக வெற்றி பெற்றது. அந்த தேர்தல் வெற்றியைத் தொடர்ந்து பிரதமராக பொறுப்பேற்றார் வாஜ்பாய்.

1998-ஆம் ஆண்டு ஜூன் மாதம் ஜெயலலிதா மற்றும் அவரின் உறவினர்கள் மீது தொடரப்பட்ட வழக்கு ஒன்றில் அவருக்கு சொந்தமான ரூ.11.59 கோடி மதிப்பிலான சொத்தை இணைக்க சென்னை சிறப்பு நீதிமன்றம் உத்தரவு பிறப்பித்தது.

மாநிலத்தில் இருந்த திமுக ஆட்சியை கலைக்க பாஜக அரசுக்கு கடுமையான அழுத்தத்தை அதிமுகவினர் கொடுக்க துவங்கினார்கள். அத்துடன் மேலும் சில கோரிக்கைகளை வைத்தனர். ஆனால் அதற்கு அன்றைய வாஜ்பாய் அரசாங்கம் அதிக ஆர்வம் காட்டவில்லை.

இந்த சமயத்தில் வாஜ்பாயுடன் கருத்து வேறுபாடு கொண்டிருந்த சுப்ரமணிய சுவாமியின் உதவியோடு சோனியா காந்தியை ஒரு தேநீர் விருந்தில் சந்தித்தார் ஜெயலலிதா என்று குறிப்பிடுகிறது நியூ இந்தியன் எக்ஸ்பிரஸின் செய்தி. ஜெயலலிதா, தனக்கு மற்றொரு வாய்ப்பு இருப்பதை பாஜகவுக்கு உணர்த்தும் நோக்கில் அந்த சந்திப்பு இருந்தது.

இந்தநிலையில் அதிமுக, பாஜகவுக்கு வழங்கிய ஆதரவை திரும்பப் பெற்றுக் கொண்டது. இதையொட்டி நடைபெற்ற நம்பிக்கை வாக்கெடுப்பில், ஒரு வாக்கு வித்தியாசத்தில் (269-270) பாஜக அரசு கவிழ்ந்தது.

அந்த ஆண்டு நடைபெற்ற பொதுத் தேர்தலில், அதிமுக காங்கிரஸுடன் கூட்டணி அமைக்க, திமுக பாஜகவுடன் கூட்டணி அமைத்தது. 1999-ம் ஆண்டு நடைபெற்ற தேர்தலில் திமுக - பாஜக கூட்டணி 26 தொகுதிகளில் வெற்றி பெற்றன. ஆனால் 2004-ஆம் ஆண்டு பொதுத்தேர்தல் நடப்பதற்கு சில மாதங்களுக்கு முன்பு பாஜக கூட்டணியில் இருந்து திமுக வெளியேறியது.

12 ஆண்டுகள் கழித்து அமைக்கப்பட்ட கூட்டணி

இருக்கட்சிகளுக்கும் இடையே இருக்கும் வேறுபாட்டைக் கலைவதற்காக பலகட்ட பேச்சுவார்த்தைகள் இவ்விரண்டு தரப்பிலும் நடைபெற்றது.

அதிமுக கூட்டணியின்போது "பல இரவுகளை தூக்கமின்றி கழித்தேன்" என்று வாஜ்பாய்கூறியதுண்டு என மூத்த பத்திரிக்கையாளரான பிரியன் பிபிசி தமிழிடம் தெரிவித்தார்.

"ஜெயலலிதாவும் கூட என்னுடைய வாழ்நாளில் இனி ஒரு போதும் பாஜகவுடன் கூட்டணி வைக்கமாட்டேன் என்று 1999-ஆம் ஆண்டு தேர்தல் பிரசாரத்தின் போது தெரிவித்தார். ஆனால் உண்மையில் நடந்தது என்ன? 2004-ஆம் ஆண்டு நடைபெற்ற தேர்தலில் பாஜகவுடன் அக்கட்சி கூட்டணி வைத்தது. அனைத்து தொகுதியிலும் தோல்வியைதான் தழுவியது இந்த கூட்டணி," என்று தெரிவித்தார் பிரியன்.

அதன் பின்னர் சுமார் 10 ஆண்டுகளாக பாஜக அதிமுகவுடன் கூட்டணி ஏதும் வைத்துக் கொள்ளவில்லை.

"2014 தேர்தலில், உண்மையில் தமிழகத்தில் நடைபெற்ற பிரசாரங்கள் அனைத்தும், 'லேடியா மோடியா?' என்று இருந்ததை நாம் நினைவு கூற வேண்டும். நரேந்திர மோதி மீது ஜெயலலிதாவுக்கு ஒரு மரியாதை இருந்ததே தவிர, அவர் இறந்த பிறகுதான் இரண்டு கட்சிகளுக்கும் இடையே கூட்டணி மலர்ந்தது. ஆனால் அதற்கெல்லாம் அரசியல் ஆதாயங்களும் காரணங்களும் இருக்கின்றன," என்றும் பிரியன் தெரிவித்தார்.

இணைந்து பிரிந்த கூட்டணி

ஜெயலலிதாவின் மரணத்தைத் தொடர்ந்து, அதிமுக பாஜகவுடன் இணைந்து 2019 நாடாளுமன்ற தேர்தலையும், 2021-ம் ஆண்டு சட்டமன்ற தேர்தலையும் சந்தித்தது.

2019-ஆம் ஆண்டு நாடாளுமன்ற தேர்தலில் வெற்றி பெற்று மீண்டும் பாஜக ஆட்சிக்கு வந்தாலும் கூட, தமிழ்நாட்டில் ஒரு இடத்திலும் கூட வெற்றி பெறவில்லை பாஜக. அதிமுக தேனி தொகுதியில் மட்டும் வெற்றியை உறுதி செய்தது.

தமிழகத்தின் முன்னாள் முதல்வர் ஓ. பன்னீர் செல்வத்தின் மகன் ரவீந்திரநாத் அந்த தொகுதியில் வெற்றி பெற்றார்.

2021-ம் ஆண்டு நடைபெற்ற சட்டமன்ற தேர்தலிலும் இந்த கூட்டணியே தொடர்ந்தது. ஆனால் திமுக கூட்டணி வெற்றி பெற்று ஆட்சியைக் கைப்பற்றியது. நான்கு தொகுதிகளை பாஜக வென்றது.

அதன் பின்னர் நடைபெற்ற 2024-ஆம் ஆண்டு நாடாளுமன்ற தேர்தலில் இவ்விரு கட்சிகளும் கூட்டணி அமைக்கவில்லை.

பாஜக மாநிலத் தலைவர் அண்ணாமலை தொடர்ச்சியாக அதிமுகவை விமர்சனம் செய்து வந்ததும், அதற்கு பதிலடி தரும் வகையில் அதிமுக வார்த்தைப் போரில் ஈடுபட்டதும் கூட்டணி முறிவுக்கு முக்கிய காரணமாக அமைந்தது. 2023-ஆம் ஆண்டு செப்டம்பர் மாதம் இக்கூட்டணி பிரிந்தது.

'இயல்பான கூட்டணி' - அமித் ஷா

மீண்டும் அதிமுக - பாஜக கூட்டணி தொடர்பாக, சென்னையில் இன்று செய்தியாளர்கள் சந்திப்பு நடைபெற்றது.

அந்த சந்திப்பின் போது பாஜக சார்பில் அமித் ஷாவுடன் நயினார் நாகேந்திரன், அண்ணாமலை ஆகியோர் இடம் பெற்றிருந்தனர்.

அதிமுக சார்பில் எடப்பாடி பழனிசாமி, வேலுமணி மற்றும் கே.பி.முனுசாமி ஆகியோர் அந்த செய்தியாளர்கள் சந்திப்பில் பங்கேற்றனர்.

"தேசிய ஜனநாயகக் கூட்டணியுடன் உள்ள இதர கட்சிகளுடன் இணைந்து பாரதிய ஜனதா கட்சியும், அதிமுகவும் வர இருக்கின்ற தேர்தலை இணைந்து சந்திக்க உள்ளது'' என அப்போது அமித் ஷா கூறினார்

மேற்கொண்டு பேசிய அவர், "தேசிய அளவில் பிரதமர் நரேந்திர மோதி தலைமையிலும், மாநில அளவில் எடப்பாடி பழனிசாமி தலைமையிலும் இந்த கூட்டணி தேர்தலை சந்திக்கும்," என்று தெரிவித்தார்.

நீண்ட காலமாக இவ்விரு கட்சிகளும் கூட்டணி வைத்து தேர்தலை சந்தித்து வருகிறது என கூறிய அவர், "1998-ஆம் ஆண்டில் முதல் அதிமுகவும் பாஜகவும் கூட்டணியை தொடர்ந்து அமைத்து வருகிறது. இது ஓர் இயல்பான கூட்டணி. பல தேர்தல்களில் இந்த கூட்டணி தொடர்ந்து போட்டியிட்டுள்ளது. ஒரு நாடாளுமன்ற தேர்தலில், இந்த கூட்டணி 39 இடங்களில் 30 இடங்களில் வெற்றி பெற்றுள்ளது" என்று குறிப்பிட்டார்.

அமித் ஷா, அதிமுக பாஜக கூட்டணி, முக்கிய செய்திகள், தலைப்பு செய்திகள், செய்திகள், தமிழ்நாடு பட மூலாதாரம்,Getty Images

படக்குறிப்பு,கூட்டணியாகவே ஆட்சி அமைப்போம். அந்த கூட்டணி ஆட்சி பழனிசாமி தலைமையில் தான் நடைபெறும் - அமித் ஷா

உட்கட்சி விவகாரத்தில் பாஜக தலையிடாது

இந்த கூட்டணி வெற்றி பெற்றால், கூட்டணி ஆட்சிதான் தமிழகத்தில் நடைபெறுமா என்று செய்தியாளர்கள் சந்திப்பில் கேட்கப்பட்ட கேள்விக்கு பதில் அளித்த அமித் ஷா, "கூட்டணியாகவே ஆட்சி அமைப்போம். அந்த கூட்டணி ஆட்சி பழனிசாமி தலைமையில்தான் நடைபெறும்," என்று கூறினார்.

பாஜகவுடனான இந்த கூட்டணியில் இடம் பெற அதிமுக ஏதேனும் நிபந்தனைகளை வைத்ததா என்று கேள்வி எழுப்பப்பட்டபோது, அதிமுக எந்தவிதமான நிபந்தனையும் முன்வைக்கவில்லை என்று விளக்கம் அளித்தார் அமித் ஷா.

இந்த கூட்டணியில் அமுமுக பொதுச்செயலாளர் டிடிவி தினகரன் மற்றும் ஓ.பன்னீர் செல்வத்திற்கு வாய்ப்புகள் வழங்கப்படுமா என்ற கேள்வி கேட்கப்பட்டது. அதற்கு பதில் அளித்த அமித் ஷா, "அதிமுகவின் உட்கட்சி விவகாரத்தில் பாஜக தலையிடாது," என்று பதில் அளித்தார்.

- இது பிபிசிக்காக கலெக்டிவ் நியூஸ்ரூம் வெளியீடு