Columns

• Premier Rajapaksa tried to persuade brothers Gotabaya and Basil to reverse their decision, but failed to convince them
• UNHRC to continue Lankan issues tomorrow; Cardinal well received for meeting with UN Human Rights Chief
• Basil’s cancelled India visit: New Delhi says it cannot crisis manage Lanka’s economic problem without a proper road map

President Gotabaya Rajapaksa sacked two partner leaders of his coalition, Ministers Wimal Weerawansa, and Udaya Gammanpila, on Thursday, bringing to the fore sharp divisions in his government.

That effectively brought the curtain down on an ‘opposition’ within. Those from eleven partner parties played that role, holding private meetings and making critical references to their leaders over numerous issues. They were not happy that decisions were being made by an influential handful and their voices not being heard.

Like the last straw that broke the camel’s back, their expulsion came after they challenged the Government’s economic policies and offered a “road map” of their own. A 42-page document “to place the country on the correct path” was presented at a large gathering of government, opposition, and civil society groups at an event at Grand Monarch Hotel in Thalawathugoda. Both Weerawansa and Gammanpila delivered speeches critical of government leaders. Embarrassing enough for them as well as their like-minded colleagues, subsequent events show, it is they, who are on the road now.

President Gotabaya Rajapaksa made the decision to sack them after a complaint from his younger brother and Finance Minister Basil Rajapaksa, the one who has remained the main target of the dissident group for several months. Unbeknownst to many, they have been sniping at him. They were retaliating against moves to oust them from the coalition. If these two brothers were steadfast in their decision to relieve the ministers of their portfolios, Prime Minister Mahinda Rajapaksa, the most experienced politician in the Rajapaksa family, tried to persuade the two siblings to re-consider their move. At that time, they also heard speculation that some 30 MPs were to leave the Government with the dissidents. However, there was no confirmation of such a move though ‘contingency’ measures were talked of.

Premier Rajapaksa expressed the view that in a government such as the present one, diverse views were only natural. The leaders, he said, should give ear to such views. In fact, he was fond of Weerawansa’s oratory and often let him speak at meetings before he followed. Unable to convince them, Premier Rajapaksa later fell in line with the decision. He also spoke to both Weerawansa and Gammanpila on the telephone. The aftermath saw a few ministerial changes, necessitated by the two expulsions and not one over which there has been wild media speculation earlier. On Friday evening, Premier Rajapaksa also had a meeting with representatives of the eleven parties. The idea was to soothe tempers.

There were rumblings within the largest partner, the Sri Lanka Freedom Party (SLFP) and speculation that it would quit the Government. One key member, who holds an important position is, however, opposed to the move. The party will take a final decision after a meeting with President Rajapaksa scheduled for Tuesday. They want to place their demands before him.

A third Cabinet Minister, Vasudeva Nanayakkara, hurriedly summoned a news conference to announce that he would no longer attend cabinet meetings. He will also keep away from going to his ministry. Is he also courting to be sacked? So, it seems, say his confidants.

The dissidents’ ‘road map’ said ‘shortsighted management’ caused the economic crisis and led to the collapse of governance and state services. The remarks were a veiled attack on Finance Minister Basil Rajapaksa. One of his actions — keeping away the partner parties from the Sri Lanka Podujana Permuna’s (SLPP) rally in Anuradhapura last month aggravated the crisis. That move was a formal indication that the SLPP would go on its own at any forthcoming election. Earlier, the dissident group was also piqued by Finance Minister Rajapaksa’s move to hand over to a US company a power project in Sri Lanka. The dissidents went to the Supreme Court. However, on Friday, the Court refused leave to proceed. Yet, the group argues there were several irregularities in the deal reportedly initiated by Basil Rajapaksa. They dubbed him the Ugly American at a news conference.

Weerawansa accused Finance Minister Rajapaksa of not having a meeting with the Governor of the Central Bank (Nivard Cabraal) for more than six months. “During this period, he (the Governor) had sent nine letters, but the finance minister has had no time to look at them,” he declared. He expounded that in a “country that is severely affected by a foreign exchange crisis, if the finance minister has no time to meet the Governor of the Central Bank, nor time to look at his recommendations, he is only waiting till things are further messed up. We cannot ‘sugar coat’ reports of such occasions anymore. Either one should be stupid to allow the situation to deteriorate to disaster level or be naive.  We took the decision for a new “road map” to save the country to awaken those who are pretending to be asleep. We want to educate the people.”

The Sunday Times made a request to Finance Minister Basil Rajapaksa to respond to the criticism and accusations against him. He, however, did not take the opportunity.

Gammanpila told the same meeting: “The first thing is for those who matter to admit that we are facing a crisis. This is the result of not discouraging imports of non-essentials.” It is far too late for the government to now identify 600 items and restrict their imports. That should have been done earlier.”

Present at the meeting was former President Maithripala Sirisena, leader of the SLFP. Some dissident group members have been speaking of making him the leader of a new front when there is an election. It is not clear whether Sirisena would have favoured such a move. Also present was the party’s General Secretary, Dayasiri Jayasekera, who has been carrying out a whisper campaign about party members taking to the streets over the prevailing situation whilst being a strong advocate of the Government in many ways.  State Minister Vidura Wickremenayake and Premnath C. Dolawatte were government MPs who took part.

Gammanpila told the Sunday Times, “The leaders of the seven partner parties of the Government met on Friday. We decided to function as an independent group on the Government side.”  Added Sagara Kariyawasam, General Secretary of the SLPP, “We are not driving Gammanpila and Weerwasnsa away from the parliamentary group, even though they are from two other parties. They are part of this Government.”

The decision by the dissidents raises an all-important question — is it the end of their “road map” campaign. Remaining as members of the Government parliamentary group brings them under the SLPP whip and makes them liable for disciplinary action for any violations. It appears that the dissident group did not foresee an expulsion when they launched their project on Wednesday. On the other hand, Basil Rajapaksa, at least for the moment, has his own faction of the SLPP, also has temporarily strengthened his clout within the Government parliamentary group and will continue to push for a single SLPP foray at any election.

One of his confidants, Arundika Fernando, who was asked to resign by President Rajapaksa as a state minister after his son allegedly used an official vehicle and reportedly assaulted a student at the Ragama Medical College, has been re-instated. It was at the request of his brother Basil. He has been sworn in as State Minister of Coconut, Kithul and Palmyrah Cultivation Promotion, Related Industrial Product Manufacturing and Export Diversification.

The recourse to the Supreme Court and the presentation of a “road map” to different groups on Wednesday, without doubt, were a gross violation of collective responsibility — a cardinal rule that governs the conduct of ministers. On the other hand, the lack of even a little humility among some coalition leaders has spawned factionalism. Demanding personal loyalties has become the order.  This is nothing new. It was prevalent even in the previous UPFA government that held office before the yahapalana regime. This was a major contributory factor for their downfall then. That reality has been forgotten by these leaders who are now facing complaints from party members of being arrogant and not approachable.

Developments in Geneva

These developments come as the UN Human Rights Council put off till Monday the interactive dialogue on Sri Lanka. This is to facilitate an urgent debate on Russia’s invasion of Ukraine. The news comes as the United States has decided to join the Sri Lanka core group which is now headed by the United Kingdom. They will also associate themselves with the statements to be made by core group representatives on Monday and make a separate statement on the subject. Its significance lies in the fact that the US Under Secretary of State for Political Affairs, Victoria Nuland and Assistant Secretary for South Central Asian Affairs Donald Lu are due in Sri Lanka later this month.

Despite change in schedules due to an urgent debate on the situation in Ukraine, there was time for Human Rights High Commissioner Michelle Bachelet to update the Council and for Sri Lanka to respond. The European Union, Nordic countries, and the UK, leader of the core group, made statements. The content of these statements, and in particular the nuances, would need to be closely watched for the future. Sri Lanka’s request to have its response furnished on the draft Report of the High Commissioner, circulated to the Council, did not materialise.

Also significant is the statement made by India. Its representative Indra Mani Pandey declared: “India believes that it is in Sri Lanka’s own interest that the expectations of Tamils in Sri Lanka for equality, justice, peace, and dignity, within a united Sri Lanka, are fulfilled. This applies equally to the commitments made by the Sri Lankan Government on meaningful devolution, including through the 13th Amendment to the Sri Lankan constitution.

“The Indian delegation has taken note of the engagement by the Government of Sri Lanka with the members of the international community and other relevant organisations on various aspects of the human rights situation and reconciliation issues in Sri Lanka. We would like such engagements and productive and purposeful dialogue to continue among the relevant stakeholders.

“The report raises important concerns on promoting, reconciliation, accountability, and human rights in Sri Lanka. We call upon Sri Lanka to take the necessary steps to address the legitimate aspirations of the Tamil community, including by carrying forward the process of reconciliation and the implementation of the Thirteenth Amendment to the Constitution of Sri Lanka, to ensure that the fundamental freedoms and human rights of all its citizens are fully protected.

“We will continue to urge the Sri Lankan Government for the early conduct of elections to the Provincial Councils in keeping with its commitment to devolution of power.”

Foreign Minister G.L. Peiris also delivered his statement to the Human Rights Council High Level Segment last Tuesday (March 1). He used this opportunity to air the Government’s strong reservations to the passing of the resolution 46/1 in March 2021, (particularly with reference to the operative paragraph 06) which refers to an evidence-gathering mechanism, a measure he claimed that was strongly opposed by several countries. However, in this context only 11 of the 47 voting member states voted against this resolution, and how it would be deemed as strong opposition is questionable, when 22 countries voted in favour and 14 abstained, including India.

Minister Peiris reiterated that “such initiatives create disharmony both in the domestic and international arenas.  It creates obstacles to reconciliation efforts, breeds hatred by reopening past wounds, and polarizes society.” He further said, “We take particular objection to the use of voluntary funding which has the necessary consequence of undermining objectivity and detachment.” These observations are not new. They have been articulated over time.

In 2012, he called the US-backed Resolution on Sri Lanka at the Human Rights Council as “undue meddling in the sovereignty and integrity of Sri Lanka.” However, this week Colombo’s Archbishop Malcolm Cardinal Ranjith called upon UN Human Rights High Commissioner Bachelet to initiate an international inquiry into the 2019 Easter Sunday massacres. The meeting with High Commissioner Bachlet came after he had met Pope Francis in the Vatican. The dialogue had been carried out in Spanish as the cardinal is well versed in that language. A source familiar with both meetings said, “He was well received and there was great support.” In Geneva, the Cardinal politely declined a dinner invitation by Sri Lanka’s Permanent Representative C.A.  Chandraprema who was hosting the country’s delegation.

It is now known that the Office of the High Commissioner for Human Rights (OHCHR), senior staffer Rory Mungoven had many rounds of talks with the Cardinal before the High Commissioner’s Report on Sri Lanka was released. The office also engaged civil society members, media personnel, organisations based in Sri Lanka and those in the Tamil National Alliance (TNA) via an internet link.

The Government delegation also met the Human Rights High Commissioner in Geneva a day after the Cardinal’s meeting.  A notable absentee at the meeting was Sri Lanka’s Permanent Representative Chandraprema due to a number restrictions maintained by the High Commissioner’s office. Minister Peiris was accompanied by Justice Minister Ali Sabry, Pharmaceuticals Production and Supply State State Minister Channa Jayasumana and Foreign Ministry Secretary Admiral Jayanath Colombage. If number restrictions were the real reason for the non-inclusion of Ambassador Chandraprema, would it not have been appropriate for the state minister Jayasumana to have given way, considering his portfolio not being of direct relevance to human rights issues? After all, it is Sri Lanka’s Permanent Represetative who must be privy to the discussions for subsequent follow up work.   Foreign Minister invited Commissioner Bachelet to visit Sri Lanka and to see for herself the development of the nation. There is no voting after Monday’s interactive dialogue. However, sponsors are to present either a rollover of 46/1, or a new resolution on Sri Lanka in September, this year, following the Human Rights High Commissioner presenting a comprehensive report to the council.

Impact of Ukrainian war

It is not only the interactive dialogue that has been delayed due to the Russian invasion of Ukraine. The impact of the war on Sri Lanka’s economy is feared to be highly damaging. One of the worst affected is the tea industry. Jayantha Karunaratne, Chairman of the Colombo Tea Traders Association, told the Sunday Times, “The banks do not take Russian documents for money transfer.” He pointed out that “the shipping lines are reluctant to sail to Russia and Ukraine due to the war situation. Only one shipping line is taking goods to Russia. Further availability of that shipping line too has become unsure. All the shipping lines are reluctant to transport goods to Ukraine.”

“Due to the war the value of the Russian Ruble is depreciating fast. Up to now it has deprecated by 50 percent against the U.S Dollar. The tea export would be affected as the payments for earlier tea shipments would be reduced due to the Rouble’s depreciation. Apart from that, the import of paper from Russia would also come to a halt due to the war situation.”

Added Tea Board Chairman Jayampathi Molligoda: “Sri Lanka exports 29 million kilograms of tea to Russia which is the third largest consumer of Ceylon tea. Ten percent of the total foreign exports are sent Russia. The revenue earned from selling tea to Russia is 132 million US dollars in 2021. There are sanctions imposed on Russian banks, therefore our main priority is to get remittance for exports. Also, the value of the Rouble is depleted against the dollar due to financial sanctions imposed. Also freight charges and shipping charges would increase as the threat levels increase due to the war. Ukraine is among the 20 countries where Ceylon tea is exported. It is the 18 in the list of 20. About 4.5 million kilograms of tea are sent to Ukraine and a revenue of US$ 24 million is earned.

Fuel crisis

Sri Lanka was still struggling to buy the required fuel even before the war broke out. Sri Lanka is seeing long queues for fuel, essential food items and even medicines with economists warning the crisis will aggravate in the coming months if the dollars fail to come in. It was primarily to finalize on financial cooperation agreement to the tune of one billion US dollars for Sri Lanka to secure supplies of essential foods, fuel, and medicines that the Minister of Finance Minister Basil Rajapaksa was to visit New Delhi on Friday, February 25 for meetings with his Indian counterpart Nirmala Sitharaman and External Affairs Minister Dr. Subrahmanyam Jaishankar. The official version for the last-minute cancellation was “last minute scheduling issues due to the war breaking out in Ukraine”.

However, the Sunday Times reliably learns from authoritative sources that on Thursday (February 24) evening a message was relayed from New Delhi through diplomatic channels to Colombo to inform Minister Basil Rajapaksa, that until he has ‘a plan’ and a viable roadmap to recovery, it will be hard for India to crisis manage the financial situation of Sri Lanka on a regular basis. In fact, when he was in New Delhi in December, last year, Indian Finance Minister, Nirmala Sitharaman, urged him to seek the assistance of the International Monetary Fund (IMF).

Basil Rajapaksa and a team is due to travel to Washington in April for meetings with the IMF. An official announcement in this regard is expected anytime now, said a Foreign Ministry official.

It was perhaps coincidence that the same Friday, February 25 when Basil Rajapaksa was to fly out to Delhi, the IMF Executive Board concluded the Article IV consultation with Sri Lanka. In their report, they observed that major policy changes including large tax cuts at late 2019 introduced by the newly elected President Gotabaya Rajapaksa in anticipation of the general election that year, primarily contributed to the annual fiscal deficits exceeding 10 percent of GDP in 2020 and 2021. They said, “The country faces mounting challenges, including public debt that has risen to unsustainable levels, low international reserves, and persistently large financing needs in the coming years.”

Against this backdrop, the IMF Executive Board stressed the urgency of implementing a credible and coherent strategy to restore macroeconomic stability and debt sustainability, while protecting vulnerable groups and reducing poverty through strengthened, well-targeted social safety nets, the statement said. The IMF also urged increases in both value added and income taxes. It also called for the current 200 to the US dollar peg to be dropped in favour or a “gradual return to a market-determined and flexible exchange rate to facilitate external adjustment and rebuild international reserves.”

The IMF board also called for current exchange controls to be lifted and Sri Lanka “to gradually unwind capital flow management measures as conditions permit.” It is noteworthy that the present Central Bank Governor Ajith Nivard Cabraal introduced some of these measures and has given various interviews to major financial media institutions in the recent past arguing against almost all the above recommendations by the Directors of the IMF.

In answers to questions posed by the Sunday Times, Shantha Devarajan, once Chief Economist of the World Bank, endorsed moves by the Government to turn to the IMF for assistance.

The Central Bank Governor continues to pooh-pooh the idea whilst behind the scenes initiatives are being taken by Finance Minister Rajapaksa though he has not explained the reasons for the delay. Come April and one of them would have to back down. Contradictions have become the hallmark of the ruling coalition.

Economic crisis: Lankan-born former World Bank expert advises President what to do Warns that without a proper roadmap and restructuring, Lanka might end up like Lebanon The advice of Sri Lanka born Dr Shantayanan (Shantha) Devarajan, former Chief Economist of the World Bank for Asia, Africa, the Middle East and North Africa, was sought by President Gotabaya Rajapaksa on matters relating to the ongoing debt crisis in the country. He spent hours talking to him in Colombo. Following suit was Opposition Leader Sajith Premadasa, who kept directing questions periodically besides having a meeting. Then came a meeting with members of the Tamil National Alliance. Dr Devarajan is now Professor of the Practice of International Development at the Georgetown University in the United States. He answered questions posed by the Sunday Timeson the present debt crisis in Sri Lanka. Dr Shantha Devarajan Q – In your view, what is the status of the Sri Lankan economy? The economy is extremely dire for two reasons. The country’s usable foreign exchange reserves are at an historic low (estimated at about $800 million in end-January 2022) while debt service payments over the next few months amount to $2 billion, and $6.9 billion for the remainder of the year.  Secondly, Sri Lanka’s debt is unsustainable. That is, with realistic projections of economic growth in the future, the government will not take in enough money to repay its debt.  In short, the country is both illiquid and insolvent. Q – Without course correction what would be the repercussions (including inflation, unemployment, shortages, public services etc.) you foresee with examples of other countries which were/are in similar circumstances? Without course corrections, the country will suffer a hard default.  It will be unable to meet its debt service obligations, at which point the country loses access to foreign exchange.  This is what happened in Lebanon in 2020.  The country had to compress imports by so much that GDP fell 20 percent in one year, inflation reached 150 percent, and the currency depreciated by 130 percent.  Even more troubling, the harsh economic conditions have led to violence in the streets, with clashes among sectarian militias reminiscent of Lebanon’s civil war. Q – In your view, apart from Covid-19 pandemic causing shortages of foreign currency earnings through tourism and remittances from overseas employees, what are the other factors, perhaps poor decisions of this and past governments that have caused this situation? The cut in value added taxes in 2019, several months before the pandemic struck, led to a drop in government revenues that, in turn, caused the rating agencies to downgrade Sri Lanka’s credit rating to near default levels.  Sri Lanka could not rollover its sovereign bonds and had to pay for them out of reserves, contributing to the foreign exchange shortage today. Other factors include the large number of loss-making state-owned enterprises, such as Sri Lankan Airlines, Ceylon Electricity Board, and Ceylon Petroleum Corporation, which not only drain the Treasury but also led to an inefficient economy.  Finally, the country’s low tax-to-GDP ratio (9 percent—one of the world’s lowest) and large civil-service wage bill make it very difficult to use fiscal policy to stimulate growth. Q – How will the war in Ukraine impact Sri Lanka? The main impact of the war in Ukraine is the spike in world oil prices (over $100 per barrel as of February 28). This creates a dilemma for the Government.  It cannot subsidise fuel any more, given the high fiscal deficit and serious debt situation.  But it also cannot pass the higher price on to the consumers, who have already been suffering from the pandemic, recession, and recent food, fuel, and pharmaceutical shortages. Q – If you were the Governor of the Central Bank of Sri Lanka now what will be your counsel to the Government and particularly to the Minister of Finance? The Government should embark on a debt restructuring programme and request assistance from the International Monetary Fund (IMF).  A debt restructuring is different from a default. Working with a financial advisor, the Government, with the collaboration of the IMF, brings the creditors together to work out a plan by which the country’s debt can be re-profiled, rescheduled and in some cases reduced to a level where Sri Lanka can pay it back.  Many countries have done this.  In many cases, the debt restructuring takes about six months, and the country regains access to capital markets soon thereafter. The IMF can play two roles.  First, it can undertake the analysis to determine the level of debt that Sri Lanka can repay. Having an institution with the reputation of the IMF do the analysis strengthens Sri Lanka’s bargaining position with the creditors.  Secondly, once the debt restructuring is under way, Sri Lanka can negotiate a programme with the IMF. In other debt restructuring cases, having an IMF programme increased the investor confidence that the country’s fiscal stance was credible, and contributed to the country’s return to the capital markets.  In addition, an IMF programme can generate added resources to the country—from the IMF, the World Bank, the Asian Development Bank, and bilateral partners. Because Sri Lanka has let its reserves decline to such low levels before initiating a debt restructuring, it will need some bridge financing to cover the import bill during the restructuring process.  Some of Sri Lanka’s traditional development partners could provide this financing.  The chances of their doing so will be greater if Sri Lanka has embarked on a restructuring programme in collaboration with the IMF, providing confidence that the country will emerge with a sustainable debt. Q – Some argue that Sri Lanka should consider even defaulting on sovereign debt rather than placing the people of Sri Lanka through such unbearable burden, whilst restructuring and renegotiating debt repayments. In your considered opinion, should we? What may be the consequences? Please elaborate. Sri Lanka should avoid a hard default. But it should undertake a debt restructuring, as outlined above, to reduce the size of its debt service payments and hence relieve some of the severe burden on the people caused by paying the full debt service. In 2010, Jamaica had a debt-to-GDP ratio of 124 percent and debt service costs were 112 percent of government revenues.  It initiated a debt restructuring (called a “pre-default debt exchange”), which led to a 20 percent reduction in the present value of the debt.  The fiscal savings amounted to 3.5 percent of GDP.  While Jamaica’s credit rating initially fell to “Selected Default”, it rose after restructuring.  Ten months later, Jamaica issued a sovereign bond, which was oversubscribed. Q – The Pathfinder Foundation says “The Road Map, presented by the Central Bank of Sri Lanka (CBSL), identified several potential sources of debt — and non-debt-creating inflows to fill the external financing gap. The securitisation of remittance flows has been added to the menu of options recently. However, to date there has been an alarming depletion of external reserves and an inexorable increase in the external financing gap.” It further said, “If the anticipated inflows are not forthcoming in sufficient quantities to fill the external financing gap, there will be no option but to turn to the IMF to avoid further scarring of the economy and creating greater shortages of essential goods and services.” Do you agree? If so why? I would rephrase it as “there will be no option but to undertake a debt restructuring and turn to the IMF.”  The reason is that, if the country’s debt is unsustainable, the IMF cannot negotiate a programme.  So, the country must initiate a programme of debt restructuring, with the appointment of a financial advisor, and then seek the IMF’s collaboration. Q – “An IMF programme would impose significant burdens on the people.” Is this statement true? Will you please explain? The statement is not true.  The current situation, with the scarce foreign exchange causing cooking gas, powdered milk, and fuel shortages and power cuts, is imposing significant burdens on the people.  A debt restructuring, combined with an IMF programme, can relieve that burden.  The combination of lower debt service payments and new money from the IMF, World Bank, ADB, and bilaterals could leave the country with an additional $6 billion in foreign exchange, which could go a long way to purchasing much-needed imports. The reason some people think the IMF “imposes significant burdens on them” is that most IMF programmes involve increases in taxes and cuts in public expenditures to reduce the fiscal deficit and make the debt sustainable.  But Sri Lanka will need to undertake these tax increases and expenditure cuts anyway, to be able to negotiate a debt restructuring and avoid a hard default.  The benefit of having an IMF programme is that the tax increases and expenditure cuts are accompanied by new money. A recent independent evaluation of IMF programmes since 2009 found that countries that had IMF programmes grew faster and resumed their pre-crisis income levels earlier than similar countries without IMF programmes. Q – India seems to be helping a lot during this crisis. How long can a neighbouring country help without Sri Lanka taking some fundamental decisions such as the possibility of IMF help on debt restructuring etc.? Also isn’t Sri Lanka further adding to its debt burden by keep borrowing more from India and others. I don’t know enough to answer this question. Q – In 1991, Indian foreign exchange was a fixed rate, it had import controls and had high Current Account Deficit (CAD) like Sri Lanka. In 1991 India had a major balance of payment crisis and only held foreign currency reserves sufficient for 15 days of imports. By 2004, it was USD 100bn and now it’s just shy of USD 650bn. The then Prime Minister P. V. Narasimha Rao appointed an economist (Dr Manmohan Singh) to run the Ministry of Finance without much political interference. They also had economists run their Central Bank (Reserve Bank of India). Don’t we need to take similar steps, if we were to recover faster and build a sustainable economy for the future? The steps Sri Lanka needs to take to recover faster and build a sustainable economy are well known.  The problem seems to be building a political consensus around these decisions.  The statement by the opposition leaders in Parliament and some of the statements by cabinet ministers on debt restructuring and the IMF suggest that such a consensus is growing. Given the critical nature of the country’s finances, the time to act is now.