Bankruptcy a thing of the past

Sri Lanka, which was declared a ‘Bankrupt State’, unable to repay its debts, is now free of the ‘Bankrupt’ tag, and is on the path to recovery. The Government has now taken steps to temporarily delay the repayment of loans amounting to US$ 100 billion. The present Government has prepared a programme to continue paying the loans and installments from 2028, after discussions with the lenders. Debt Restructuring (DR) and Domestic Debt (DD) optimisation have been successfully implemented so far. A debate on the matter too is slated to be held in Parliament. Here, several experts express their views on the subject.

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As Bankers, removal of restrictions by international financial institutions is our lifeline

Sujeewa Rajapaksa – Chartered Accountant – Chairman, People’s Bank

Sri Lanka banks had to face various difficulties as international banks and financial institutions had imposed various restrictions on us during our dealings with them during the recent history.After we, as a country, obtained a comprehensive credit facility with the International Monetary Fund, our country got some international recognition again since March 2023. It has recently been further strengthened due to the agreement to restructure the debt with the bilateral creditors. We as a country have been waiting for a long time to achieve this. It is good to see our expectations becoming a reality. It is important that we get some concessions to repay these bilateral loans. For us as bankers, the removal of certain restrictions that had arisen in dealing with international banks and financial institutions is the biggest consolation.

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IMF loan facility afforded us Credit and Credibility

Dr. Prabath Weerasinghe– Senior Lecturer Faculty of Engineering, Ruhuna University

Sri Lanka is a country that has a glorious history of paying installments and interest on time for domestic and foreign loans obtained. But after 2022, we had to officially declare that we will not be able to repay the loans. In this situation, it was difficult for us to get a credit facility from international lending institutions. They did not welcome us that much. Under such circumstances, it is good that we got the IMF loan facility.

We get a number of advantages with this, as we get some recognition to get foreign loans as a government, and as a private sector apart from the government.

There are many scientists, innovators and entrepreneurs in our country who are researching new products, innovations and new discoveries. They make new discoveries and research with their own funds. Patents are obtained through that. Discoveries that can be made into various products are unveiled at the research level. There are no funds to create a necessary industrialization and manufacturing company to bring these to the market as commercial, new products. They therefore suffer by keeping their inventions at home.

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Export processing zones generate immense economic benefits

Dhammika Fernando – Chairman, Export Processing Zone Manufacturers Association

In our country, mainly in the export processing zones, industries and enterprises operate on the investment of local and foreign investors. These will bring huge economic benefits to the country.

We industrialists are engaged in export activities directly related to foreign trade. Our first, second and third goal is to bring the foreign exchange needed by Sri Lanka. We are working to achieve this goal. Our country faced a severe economic crisis three years ago. That is the inability to pay back the domestic and foreign loans taken by us as a country.

Due to this crisis, the country fell into an economic abyss. We needed solutions to get out of this abyss. At that time, a group of people told us to go to the IMF. Another group said not to go. But, in the short term, the social and economic difficulties that the people of the country suffered increased day by day. We lost the foreign exchange needed to make essential imports.

At this time, it was announced that the country was bankrupt. It was in such a background that the current government started negotiations to get an IMF loan facility.

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