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President Ranil Wickremesinghe’s address to the nation last Wednesday heralding the “ Good News” of the signing of bilateral debt restructuring agreements with the Paris Club, India and China was preceded by a media blitz throughout the country including in the social and conventional media.

The headquarters of the President’s United National Party too greeted the speech with crackers on the President’s “achievement”. However his partners in Government the Sri Lanka Podujana Peramuna did not seem to share the feeling of celebration and neither lit crackers nor ate Kiribath. 

Whether they felt there was nothing to celebrate or were peeved at the President’s supporters giving the entire “credit” to President Wickremesinghe is not very clear.

In fact the President in his address very clearly spelt out his belief that it was primarily his efforts that resulted in the bilateral debt restructuring agreements with the Paris Club, India and China being reached.

To quote the President: “Despite these conditions, I accepted the challenge without any preconditions. I believed in my ability to save our country and its people from the economic abyss. I had a comprehensive work plan and a deep understanding of the strategies that other nations had employed to emerge from similar crises. Furthermore, I had faith that with my planned policies and dedication, the economy could be revitalized.

“I was confident that I could garner international support for our recovery efforts.

“That was all I had. I had no Members of Parliament. I did not have my own cabinet. I did not have a government to call my own. Despite these challenges, I accepted the daunting task.”

One cannot grudge the President claiming the “achievement” as his when most of his Cabinet Members were party to the destroying of the economy under President Gotabaya Rajapaksa and may not have had the capacity to contribute to the task at hand.

However the full details of the Agreements with the official creditors will only be known when the President tables them in Parliament on Tuesday. From the information available it seems that through the Agreements signed debt relief is provided by way of an extension of the payment period (maturity extension) and reduction of interest rates. There is no reference to a haircut.

With the domestic restructuring completed earlier, what remains to be addressed by the Government is the finalising of agreements with the commercial external creditors including the ISB holders and the China Development Bank (CDB).

From all reports this seems to be the most challenging part of the restructuring process and the outcome is anxiously awaited.

Samagi Jana Balavegaya Parliamentarian Dr. Harsha De Silva commenting on the agreements signed with the official creditors stated that as a people’s party, they welcomed the deal but looked forward to the deal with Bi-Lateral lenders being tabled before parliament so the finer details could be better understood. “We must ascertain how much of a grace period it entails, and if there are any interest costs attributed to that he said.

The SJB MP also questioned how the Government could claim that the Domestic Debt Restructuring (DDR) was a success?

He went on to say that “If anyone says DDR was done successfully that is not right. The burden was heaped only on pension funds, and that is not fair.”

SJB MP Kabir Hashim, stated that the haircut with ISB holders should be a minimum of 30% and requested the Government to cap the haircut at 20%, as the bondholders had previously agreed to this number. If that happens only can the Government talk about good news, he said

While economists and politicians analyse the impact of the debt restructuring process, the public still reeling from the impact of the economic crisis anxiously await how it will improve the conditions of the common man. That would be the ultimate litmus test of the debt restructuring conducted by the Government.

Meanwhile on a different note, the Constitutional Council probably did the recently retired Attorney General Sanjay Rajaratnam a favour when they twice turned down a proposal by the President to extend his services by six months.

If the Constitutional Council had approved the President’s proposal for extension of Sanjay Rajaratnam’s term, every decision made by the Attorney General in the next few months would have been viewed with suspicion particularly in the context of the forthcoming Presidential Elections.

(javidyusuf@gmail.com)