SL unable to seek donor assistance – PM

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It is not possible for Sri Lanka to seek assistance from any donor without assurance from the IMF on assistance, Prime Minister Ranil Wickremesinghe said in Parliament yesterday (22).

Making a special statement, the Premier said, a team of representatives from the US Department of the Treasury will arrive in Sri Lanka next Monday.

“Sri Lanka has taken loans amounting to USD 4 billion under the Indian credit line. We have requested more loan assistance from our Indian counterparts. But even India will not be able to continuously support us in this manner. Even their assistance has its limits. On the other hand, we too must have a plan to repay these loans. These are not charitable donations,” he said.

“The only safe option before us now is to hold discussions with the International Monetary Fund. In fact, this is our only option. We must take this path. Our aim is to hold discussions with the IMF and arrive at an agreement to obtain an additional credit facility. As the next step, we hope to form a foundation to stabilise the economy and implement an immediate programme to increase our export revenue.

This plan has been formulated, following discussions with the Central Bank, Treasury, relevant government officials, professionals and experts.”

A majority of the Cabinet was appointed by 20 May. We began our programme from then onward. First, we decided to revert back to the tax system we had in place back in 2019. We then agreed to ensure a primary surplus in the national budget by 2025. Next, an IMF team on revenue and taxation visited Sri Lanka for discussions. They presented us with the relevant report. On Monday, the main IMF team arrived in Sri Lanka and the talks with the group will continue for the next several days, he said.

“We have concluded the initial discussions and we have exchanged ideas on various sectors such as public finance, finance, debt sustainability, stability of the banking sector, and the social security network. Representatives of the financial and legal advisory firms Lazard and Clifford Chance are now in Sri Lanka to assist us in our debt restructuring efforts. The framework for debt restructuring is being formulated.

We ensured that we created the background necessary for the immediate arrival of these three teams in Sri Lanka. We will conduct lengthy discussions with them. Their presence in the country will now allow us to hold meetings together with all three teams. It will only further assist us in expediting our programme. We intend to enter into an official level agreement with the IMF by the end of July.”

Considering this planned framework and the official level agreement, it is expected that the Executive Board of the IMF will then arrive at its final decision.

“Parallel to this, we will organise a credit aid conference which will be led by India, Japan and China, our main lending countries. However, there have been some conflicts and disagreements between us in the recent past. We are working towards resolving these and fostering friendly relations once again. Each country has different processes for granting loans. Through the credit aid conference, we hope to arrive at a general consensus on the lending processes.

If we receive the IMF seal of approval, the world will once again trust us. It will help us to secure loan assistance as well as low-interest loans from other countries in the world.”

Wickremesinghe said the budget for 2023 will be presented in November. He said the Government is also working towards ensuring food security and introducing political reforms. Already, a plan has been formulated to provide farmers with the necessary fertiliser for the next cultivation season. The Government will also take steps to import rice under an Indian credit line and issue stocks to the Sri Lankan market to ensure price control. This will provide some relief to consumers, he said.

“The Samagi Jana Balawegaya (SJB) and the National People’s Power have pledged they will take the lead in setting up farms in the country. I thank them for their efforts in setting up these farms without government support. As mentioned by MP Anura Kumara Dissanayake recently, his party has already chosen the areas to commence these programmes.”

He urged the SJB and Jathika Jana Balawegaya (JJB) that boycotted this week’s parliamentary sittings to attend Parliament immediately and support the passing of the 21st Amendment and agree to establish the new parliamentary committee system. He said he has requested former Speaker Karu Jayasuriya to present a comprehensive plan and report on the newly proposed parliamentary committee system. He handed over his report on Monday (20).

Once we have established a firm economic foundation, you can hand over power to any political party as per your wish at an election and elect 225 representatives to Parliament, Wickremesinghe said.

“We have also taken steps to import 100,000 MT of LPG utilising a World Bank loan of US$ 70 million and US$ 20 million of our own reserves. We will be able to eliminate the gas shortage once we receive these LPG stocks. Presently, Sri Lanka is in need of US$ 550 million to meet its monthly fuel needs. However, in the face of the economic crisis, we are experiencing difficulties in securing the required funds for this purpose. Thus, we will take steps to import the maximum fuel stocks possible based on our dollar income. It will take more time to resolve the fuel shortage. Therefore, I request you to use fuel sparingly,” he requested the public.

Speaking further, Wickremesinghe said he requested the IMF to hold a discussion with all political parties.

By Gagani Weerakoon and Methmalie Dissanayake