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By Sandun Jayawardana  

The Resolution on the Vote On Account (VOA), which covers funding for the first four months of 2025, was passed in Parliament on Friday (6). Though the VOA was passed without a vote, there were intense disagreements over the allocation of funding. The opposition insisted that the ruling National People’s Power (NPP) is essentially going down the same path as the previous Wickremesinghe government despite pre-election rhetoric of bringing about a “system change.” The government meanwhile, hit back that it has no choice but to pay for the “past sins” of previous regimes.  

Over Rs. 1402 billion was allocated through the VOA for maintaining government services and continuing ongoing projects. Opening the debate for the government, Minister of Labour and Deputy Minister of Economic Development Prof. Anil Jayantha Fernando explained that the country’s borrowing limit had been increased to Rs. 4000 billion through the VOA in the event that the restructuring of International Sovereign Bonds (ISBs) are delayed beyond December 31.

The NPP government’s number one priority is stability, Prof. Fernando stressed. He added that in this context, the government was forced to work according to the framework of the agreement the previous government had struck with the International Monetary Fund (IMF). “That is what we said in our manifesto. We said that we will not deviate from the framework of the agreement but that we would discuss different sectors depending on the suitability. That discussion was successful and the final result is that we have reached a staff level agreement. It will be submitted to the IMF Director Board for approval and we can hear about the outcome either in January or February,” he said.

Opposition parties though, accused the government of hypocrisy, alleging that the NPP’s VOA was identical to the economic policy of the previous government of former President Ranil Wickremesinghe. Samagi Jana Balawegaya (SJB) Kegalle District MP Kabir Hashim alleged that the VOA did not contain an iota of the “system change” that President Anura Kumara Dissanayake promised. There was no system change, but “Anura has changed,” quipped Mr Hashim.

Pointing to the increased borrowing limit to Rs. 4000 billion, the MP said the presentation of the VOA raises several questions. “Your VOA contradicts your ideology, your philosophy and your promises. We need answers for that,” he told the government. The SJB said that while it will follow the framework of the IMF agreement, it would change some of the contents. However, President Dissanayake has stressed that his government would follow the agreement to the letter, Mr Hashim stressed, telling the government, “you have become more neoliberal than us.”

While it is true that the government has set aside Rs. 3000 billion for ISBs, that funding has not been allocated just by the VOA. Funds for ISBs had been set aside in the 2024 budget as well, Minister of Industry Sunil Handunnetti noted. “We hope to reach an agreement on the ISB payments by December 31, 2024. We won’t need this Rs. 3000 billion if an agreement is reached before that date. We have made the allocation in the VOA in the event that agreement is delayed. You know that very well,” he told the opposition.

He said the government had been forced to allocate funding for ISBs owing to the “past sins” of previous governments including the Wickremesinghe government. “We are now being forced to pay off with interest, the loans you took out.”

New Democratic Front (NDF) MP Ravi Karunanayake recalled that he was Finance Minister in a previous government that negotiated with the IMF and it was no easy task. During such a negotiation, one needs to realise that while the IMF “can have their say, the government must have their way,” the MP added.

“The IMF is essential to take the country forward after falling into bankruptcy and it is extremely dangerous to play around with that. However, there’s no need for us to accept everything the IMF says. We are the most qualified to give ideas on how to achieve targets,” he emphasised.

At issue is the contradiction between what the NPP said on the campaign stage and what it is doing now, said SJB MP Dr. Harsha De Silva. The NPP and JVP stance was that credit had been stolen. Claims were made that in certain instances, only 53% had been received and that 47% had not been received and that debt liability is Rs. 8 trillion while assets amount to Rs. 2 trillion. “They made it sound as if the balance of Rs. 6 trillion had been stolen, and countries such as Uganda were also dragged into the conversation. However, we consistently explained that liabilities were with the Treasury while assets were with other institutions. For example, there are assets of the RDA and UDA. The assets of the Mahaweli have not been parked at the Treasury. There is an accounting issue here. Nobody has stolen Rs. 6 trillion.”

He added that the NPP had claimed a lot of the debt was “odious debt” where loans had been taken out for one purpose but had been diverted to personal accounts overseas. The party had said it would only pay the loans after conducting a forensic audit of the debts that had been incurred, yet this has not happened, Dr De Silva pointed out.

Neoliberal policies driven by profit have caused enormous difficulties for women and the working classes, said NPP Colombo District MP Dr. Kaushalya Ariyaratne. She added that the IMF conditions which Ranil Wickremesinghe agreed to have had an adverse impact especially on women and marginalised groups. “Accordingly, this is why we have proposed that when the next budget is presented, the 18% VAT imposed on some items by the Wickremesinghe government be removed,” she said, noting that a central tenet of the NPP’s policy is empowering women.

Quoting from the NPP’s manifesto, “A Thriving Nation, A Beautiful Life,” Opposition Leader Sajith Premadasa claimed that the new government has betrayed its mandate and violated the rights of the people by agreeing to move ahead with the IMF agreement without any changes. He alleged it to be “the biggest betrayal in recent times.”

He urged the government not to go down the same path as the Wickremesinghe government and appealed to them to present the agreement Sri Lanka hopes to sign on the restructuring of ISBs to Parliament before it is signed on December 12.

When the NPP took over, the ISB restructuring process was in the final stage of negotiations. Even if there are certain shortcomings in the agreement and though there may be alternatives, the government cannot further drag out the negotiations by discussing these now, Foreign Minister Vijitha Herath explained. “What we are expecting from the IMF programme is to manage this crisis situation. If we are to move forward on a long-term recovery however, we need to implement a production based economic programme. We have that vision and will take steps towards that end,” he stressed.