Premier says : 50% drop in EPF, ETF value

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The depreciation of the rupee has reduced the value of the money in the Employees’ Provident Fund and the Employees’ Trust Fund by 50 per cent and the real value of pensions has also decreased by 50 per cent, Prime Minister Ranil Wickremesinghe said in Parliament yesterday (5).

Wickremesinghe, in a special statement, presented the road map of the Government to revive the collapsed economy and the progress of the discussions with the International Monetary Fund (IMF).

“We are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more difficult and complicated situation than in previous negotiations. Once a staff-level agreement is reached, this will be submitted to the IMF Board for approval. But due to the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to them separately. Only when they are satisfied with that plan can we reach a staff-level agreement. This is not a straightforward process.”

But we have been able to end the rounds of discussions effectively despite these difficulties. According to the IMF’s official announcement, “Positive and productive discussions were held on supportive economic policies and reforms. Significant progress was achieved.” The next step is to submit to them the plan on debt restructuring and sustainability, which is being prepared by financial and legal experts Lazard and Clifford Chance. We hope to submit this report to the IMF by August. Once this is done, we will be able to reach an agreement. However, even after this agreement, it must be presented to the IMF Board for approval.  After approval is granted, a comprehensive loan assistance programme will be prepared for 4 years. We are now on that path, he said.

“After reaching a staff-level agreement, we will organise a donor conference by bringing together the friendly countries that provide us with loan assistance, such as India, China, and Japan.

We hope to create a system where we can get loan assistance through a common agreement.”

Wickremesinghe said, by 2025, the Government aims to create a surplus in the primary budget and raise the economic growth rate to a stable level. The Government’s expectation is to establish a stable economic base by 2026.

“We have to pay USD 3.4 billion between June and December this year, USD 5.8 billion in 2023, USD 4.9 billion in 2024, USD 6.2 billion in 2025, USD 4.0 billion in 2026, and USD 4.3 billion in 2027. The total debt burden of the Government at the end of 2021 was Rs 17.5 trillion and by March 2022, it has increased to Rs 21.6 trillion.”

“No matter how much we are in the middle of a huge economic crisis, we cannot forget the problems faced by the poorest sections of society regarding food. The upcoming interim budget will allocate money to provide short-term relief to the lowest sections of society. This relief will be given to the people under the Social Welfare Benefits Act. We are also launching activities to prevent malnutrition caused by a lack of food,” he said.

In parallel to these activities, necessary incentives are being provided for cultivation. Facilities are being provided.

An islandwide cultivation programme is being launched with the intervention of the Prime Minister’s Office along with the Ministry of Agriculture and other relevant ministries. The aim of this programme is to increase food availability at a decentralised level. In this regard, the responsible institutions will meet weekly and take necessary action. We hope to increase overall food production in the next six to seven months, the Premier said. 

By Methmalie Dissanayake