President assures unprecedented fiscal effort to restore debt sustainability

President and Asian Development Bank current Chair (Sri Lanka) Ranil Wickremesinghe at the start of the multilateral donor agency’s 55th Annual Meeting in Manila yesterday 

• Uses speech at 55th Annual Meeting of ADB Board of Governors in Manila as Chair to update on measures taken and planned to address Sri Lanka’s challenges 
• Hopes creditors and partners will set an example of collaborative good faith action that can result in sustainable, equitable solutions to sovereign debt issues
• Assures Govt. will stabilise economy, though countries and stakeholders eagerly monitor processes 
• Outlines crisis not only economic, but also consequences of evolving geopolitics
• Calls for end geopolitical rivalry to address major global threats
• Points ADB has key role to help shape finance policies to improve living standards across Asia-Pacific 

President Ranil Wickremesinghe yesterday assured the world that Sri Lanka will shoulder an unprecedented fiscal effort, as part of the Government’s commitment to restore the country’s debt sustainability amidst major economic stress, whilst hoping creditors and stakeholders will support the efforts. 

Addressing the 55th Annual Meeting of the Asian Development Bank Board of Governors in Manila as Chairman, President Wickremesinghe said his Government is well aware that the evolution of Sri Lanka’s economic crisis includes both domestic policy elements as well as external shocks, adding that the resolution of the crisis also requires both domestic efforts and the support of external partners. 

“It is our hope and expectation that Sri Lanka’s creditors, and all stakeholders, will support us in these efforts to restore debt sustainability and help put the country back on the path of inclusive and sustainable economic growth. It is incumbent upon Sri Lanka and our creditors and partners to set an example of how collaborative and good faith action can result in sustainable and equitable solutions to sovereign debt issues,” he added.

Noting that Sri Lanka undertakes these deep and painful reforms, as the country is experiencing rising unemployment and a reduction in purchasing power of the consumers, he added that the Government is cognisant of the adverse impacts on the most vulnerable members of society, whilst pointing out that every effort has been taken to allocate greater financing and resources towards targeted support for social protection.

President Wickremesinghe assured that the Government has stabilised Sri Lanka’s economy and many countries and stakeholders are keenly monitoring how they resolve this crisis.

“The Government has already undertaken major macroeconomic policy reform measures, aligned with the commitment to implement an ambitious and comprehensive package of reforms that will help restore the sustainability of the country’s public finances, address external imbalances, and restart the growth engine through structural reforms and improvements in governance,” he explained. 

Stating that the economic levers alone are insufficient to stimulate global economic recovery, he pointed out that the factors underlining the main crisis are not only of economic origin but also the consequences of evolving geopolitics. 

He noted that as this global rivalry intensifies into a new Cold War, which will determine a new global power balance by 2050, the inability of the major countries to give leadership to the mitigation of the global climate change crisis is becoming more apparent.

“As they say in many of our countries when the elephants fight, it is the grass that is crushed. This is the predicament of many of our member countries. Therefore, we must overcome the geopolitical rivalries to address the major threats to our existence, otherwise, we will all fail to lead to instability in our region reminiscent of Europe after World War I. 

“On the other hand, our ability to successfully meet these challenges will lead to remarkable progress in raising the living standards of our people through the rise of the economies of our member countries,” he stressed.

Against this backdrop, President Wickremesinghe appreciated that the ADB’s Strategy 2030 which seeks to respond to global challenges, including climate change and natural disasters, food, and energy insecurity, whilst also embracing opportunities in the digital economy, sustainable energy, and leveraging technology for inclusive education and healthcare. 

He also said the ADB has a crucial role in helping to shape and finance policies that improve people’s lives and livelihoods across Asia and the Pacific.