Highlighting that Sri Lanka is in a tough position and the next six months of the year would be a difficult period, President Ranil Wickremesinghe called for all stakeholders to agree on a future recovery plan.
According to him, whether Sri Lanka likes it or not, the country has to deal with the IMF.
delivering the key note address, at a forum organised by Advocata Institute, he asked critics to provide an alternative solution, if Sri Lanka should not go with the IMF.
“We have to enter into the standby agreement with the staff level agreement with the IMF,” he said.
“If any member of Parliament or any other stakeholder disagrees with the IMF agreement, then we have the right to ask them for a solution,” he said.
The Parliament can study both proposals and agree on one solution, and everyone should abide by that agreement, he said
The biggest challenge Sri Lanka is facing with the IMF is the government and policies change, he said.
He warned of dire consequences if the country did not go through with the IMF deal.
The solutions might be bitter as it could raise taxes and introduce reforms which have short-term implications until the country adjusts to them.
“The road to recover may be bitter. But any medicine for recovery is bitter. You have to take injections,” he said.
With the country and the IMF working on the staff level agreements, the Government should look into sustainable debt, he said.
With foreign debt as the first focus, Sri Lanka should look at its debt structure to see if it was getting caught on Geo-Politics and navigate without getting caught especially in the Asian region politics, he said.
Until Sri Lanka navigates through it, the country cannot seek assistance from the London Club, he said.
After the foreign the debts, the key issue which needs to be looked at is local debt, he said.
According to him local debt has far reaching consequences.
Lazards, the financial advisors are looking at both debts,” he said.
“It’s certainly going to be a difficult time. I won’t say no. The first six months is going to be difficult. it will be a period we have not seen before. but we all have to go through it,” he said.
By Mario Andree