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President Ranil Wickremesinghe makes special statement in Parliament yesterday
President Ranil Wickremesinghe yesterday told Parliament that he and the country had fulfilled the obligations to secure critical support from the International Monetary Fund (IMF) and the onus was on the latter to approve within weeks.
Wickremesinghe, amidst applause from Government benches also warned the Opposition and the people not to scuttle the process or face serious consequences on the basis that the agreement with the IMF is of special importance to restore the economy, and there was no alternative path to be seen at present.
Making a special statement in Parliament, the President revealed that Sri Lanka received the letter of financial assurance from the Exim Bank of China on Monday night. “Accordingly, on the same night, I and the Governor of the Central Bank signed the letter of agreement and forwarded it to the IMF. Now our duties are done. I hope that before the end of this month, by the fourth week, the IMF will do its duty,” the President said, adding thereafter Sri Lanka will get the first round of money from the World Bank and ADB.
“This time, there is no room for failure in completing every task agreed upon with the IMF, unlike the previous 16 occasions,” Wickremesinghe stressed. In its 17th attempt, Sri Lanka is seeking $ 2.9 billion four-year Extended Fund Program from the IMF followed by restructuring of $ 33 billion of Central Government debt and Guaranteed SOEs debt.
“If Sri Lanka fails to fulfil the tasks agreed upon with the IMF, it could result in the IMF discontinuing its collaboration with the country, and this could in turn lead to other multilateral and bilateral financial institutions being unable to work with Sri Lanka,” the President warned.
He also warned that if the existing agreement with the IMF is breached, foreign economic activities will be largely hindered, and Sri Lanka would have to pay loans taken from foreign countries and private banks. The President revealed that an annual amount of approximately $ 6-7 billion of foreign loans are due to be paid until 2029, and “we do not have the foreign exchange to pay this debt. Thus, we need the IMF to continue the agreed debt sustainability discussion with foreign creditors.”
Parliament was told that the Government took many extremely difficult economic measures to stabilise the economy and efforts are now being made to ensure economic growth.
“The suffering caused by this continues for everyone in our society. Amidst a difficult and complex situation, we have worked hard for the past seven to eight months to bring about a positive state,” the President said, stressing that economic reforms are crucial to move forward, and it is important for everyone in the country to understand this.
“Various influential groups, including political parties, voluntary organisations, and trade unions, should consider this deeply. Professionals have highlighted that the tax burden is high. However, this situation should be maintained for a short period of time. Otherwise, if this program is disrupted, the country will be pushed to a far more dangerous place than the state it was in during February- March 2022,” the President warned.
He recalled that at that time, many people thought that salaries would be lost, pensions would be lost, jobs would be lost, industries would be closed, schools would be closed, etc. We have controlled this situation to a certain extent,” he said.
“However, if the groups that can influence the society disrupt the program that we have proposed through various measures, the social alternative that will emerge from it will be extremely dangerous. It could lead to a period of unprecedented woes in our society,” Wickremesinghe pointed out. “Therefore, we accept the people’s right to freedom of speech. But that should be done peacefully. Holding meetings and holding protests is not a problem. But I would like to say that if this program is disrupted through this agitation, this Government will act strongly on it,” he warned.
The President also referred to the positive development of the appreciation of the Rupee. “If this country had collapsed on 9 July, this situation would not exist today. There was no support from anyone at that time. I would like to express my thanks to the Armed forces and the Police who acted to uphold peace in the country. As a result of their efforts, we have fuel and electricity today. Also, before long dollars will be available. Therefore, we will not allow these sinister forces to destabilise this program,” the President said.
Wickremesinghe once again extended an invitation to the Opposition to join the Government in this endeavour of stabilising the country’s economy. “After accomplishing this, we can decide on holding the presidential election and general election. The country would take this decision. Until then, I am asking you if you are ready or not. You can accept this, or reject it.
“The country’s income situation should be considered especially by mid-June. Accordingly, it is from there that decisions could be made. Once the IMF agreement is reached, the agreement would be tabled in Parliament. I request the House to accept it or give an alternative,” the President told MPs.
He said that thereafter the Government will bring a new draft on the Government’s way forward and road-map.
“I will also give it to the National Assembly. I will present a long-term and mid-term plan after the Parliament has discussed and reached an agreement on it. At present, a number of reports have been received from the National Assembly and Committees of the Parliament. I am thankful for that. But we were able to complete this work within a short period of 08 months. I declare that we will take advantage of it and move forward,” the President told Parliament.
Earlier in his speech, Wickremesinghe recapped the various difficulties faced by the bankrupt country and the people last year and listed necessary measures taken by the Government to resolve those. He also detailed negotiations with the IMF and other multilateral and bilateral donors as well as private creditors.
“The Government had to fulfil the requirements set by the IMF, which included revisions to electricity tariffs and fossil fuel prices, ensuring the independence of the Central Bank, and increasing interest rates to control inflation, reforming public enterprises, strengthening the social safety net, working to increase public revenue and controlling public expenditure.
“Expanding competition in the petroleum and electricity sectors had to be done in advance. Those tasks that Sri Lanka should have done proactively have been completed by now,” the President said.
“I am aware of the hardships that the people of this country had to suffer. As a Government, we apologise for that,” he added.
