Govt should not deviate from agenda of national needs in discussions to find solutions to crises: Eran

Samagi Jana Balawegaya (SJB) Member of Parliament (MP) Eran Wickramaratne emphasized that the country’s crises cannot be resolved only by agreeing to the agendas of multilateral agencies that provide assistance to find solutions to the crises that Sri Lanka is currently facing.

When holding discussions with the International Monetary Fund, the government should adopt a strategy to discuss not only their agenda but also to include our agenda of national interest.

Mr. Eran Wickramaratne said this while addressing the debate held in Parliament today August 10 on the President's policy statement.

The MP who spoke further said that the International Monetary Fund has advised us to revise the electricity tariffs. It has also been said to restructure the balance sheet of the petroleum corporation. It is also said to increase the perimeter of the external credit limit. As of now, our foreign debt is about 30% of the total debt.

"Dealings have to be negotiated with other parties who agree to assist in resolving issues. The unique problem for Sri Lanka is the non-availability of dollars. There are also issues with financial problems and a balance of payments related to the budget. But we have no problem with banks. If we do not engage in negotiations to protect our banking system, the emergence of another crisis cannot be avoided," the MP said. 

Mr. Wickramaratne asserted that Sri Lanka should not ever consider the domestic debt restructuring proposal in particular. We must be firm in that position. Otherwise, while trying to solve one problem, the country may be pushed into another problem. If a banking crisis occurs, it will take another decade to resolve it.

In the economic crisis we are facing, the huge problem is the national debt. According to government statistics on public debt, the percentage of debt received from China is 10%. 13% from the Asian Development Bank, 9% from the World Bank, and 47% from sovereign bonds (ISB). , 10% from Japan, 2% from India and 9% from all other countries.

Statistics prove that China has actually given more than what was shown in the debt stock. The China Exim Bank has given loans directly to several SoEs with sovereign guarantees and the government has not reported them as government loans.

These loans given to public corporations are also government loans and the government itself has to repay them. Also, in Foreign Currency Financing, the amount to be paid to China Development Bank is not included as public debt. From this point of view, the total amount of debt received from China is about 20%.

There are other facts that explain the magnitude of our crisis. Japan's JICA has stopped the concessional loan of 570 million dollars given for the construction project of the second terminal building at Katunayake Airport.

And China's Exim Bank has also stopped US $ 51 million offered for the construction of the first phase of the Central Expressway from Kadawata to Mirigama, Also, the World Bank announced on July 29, 2022 that it will not lend to Sri Lanka until macroeconomic stability is established. 

“How can the government solve the country's problems in the midst of such crises” argued Mr Eran Wickramaratne