|The decision to settle the full proceeds of the ISB maturing on the 18th January is highly questionable in the light of dangerously low foreign currency reserves that have resulted in shortages of essential food items, medicines, fertiliser, and raw materials for industries. The daily sight of queues, the agonies expressed by those having to undergo such hardship as well as the experiences of businesspeople who struggle to obtain foreign currency to import essential raw materials, paint a bleak picture. If a company was faced with such a crisis, it would have been deemed irresponsible on the part of its management if it did not negotiate with its creditors a rescheduling of the debt by presenting a credible plan that showed how the company would emerge from the crisis and gain the confidence of the creditors, to provide leeway, instead of settling the creditor in full and leaving the business exposed to a possible collapse.
Not only companies but even countries, faced with the situation Sri Lanka currently faces, have done that successfully, saved its precious foreign reserves, improved fiscal management, increased economic activity and within a short period, boosted their reserves, to have their country’s ratings upgraded. Surely, shouldn’t Sri Lanka follow a similar path? What is the mighty hurry to settle in full foreign ISB holders, who have most likely purchased them at a deep discount and are licking their lips in anticipation to earn a staggering profit, at the expense of your citizens and businesses who are desperately in need of these funds for their livelihood and existence?
The mind boggles!
Former Chairman, Employers Federation of Ceylon (2007-2009)