‘IMF bailout viable option for mounting debt repayment’
Whichever government is in power they would have to face the current dollar crunch, escalating global commodity prices, pandemic and most of the other current issues and one way out of this is to look for a IMF funding Chair of LIRNEasia, Prof. Rohan Samarajiwa at The Advocata Institute organized building political consensus for economic reforms event at BMICH on Wednesday.
He said that no institution has given loans to Sri Lanka by force but now the debt repayment is mounting and one viable option would be to look at the IMF for a bailout. He also said that the budget did have salient features and though not adequate to cut down the fuel allowance of the parliamentarians by 5 liters is a step taken in the right direction giving a positive message that polities too are taking some cost cutting measures. But the one off tax imposed on corporate is not a welcome move.”
He said that the former Governor CBSL Dr .Indrajith Coomaraswamy saw this crisis coming three years ago and warned the then government but no action was taken. SJB MP. Dr. Hrasha De Silva confirmed this and said that the previous government took several measures specially to strengthen the reserves and raise it to USD 8 billion via swaps, hot money and several other financial tools. “Today Reserves have dipped to less than USD 1.5 billion and over USD 2 billion debt repayment is on soon.”
He also said that Sri Lanka should strengthen exports and said that while 43 countries send their components towards manufacturing mobile phones, Sri Lanka is not among those countries.
MP. Patali Champika Ranawaka also said that he too predicted in 2015 that ‘Sri Lanka would be facing this current economic crisis’ and even compiled and published a book about it. “Sri Lanka is heading for bankruptcy in 2023 and quick recovery steps should be taken.
The former Minister of Power and Energy said that the current crisis would be even worse if there was no rain fall and would have to use other power sources. “If there is no rain for 6 weeks Sri Lanka would certainly have to impose power cuts.” He said that the public sector should be given targets and KPI and he even had a ‘Delivery Unit’ when he was in charge of UDA to ensure follow- up action in projects.
He said that the country rating too is very important to woo FDI and said that there will be not even a single investor coming even to the Colombo Port City next year if this is not improved
JVP MP Vijitha Herath said that Sri Lanka is now in the ICU and giving ‘saline or small doses of medicine’ is not enough and a major ‘surgery’ is needed. “Sri Lanka exports which accounted for around 31% in 1980 have now dropped to 7%. This is a major cause of alarm.
Both Mp’s Ranawaka and Herath accused the government of investing on nonproductive and ‘not so urgent’ mega development projects that could have been implemented later while projects that needed priority have been overlooked. “Some highway projects could have come later,” Ranawaka said.
Dr. Suren Rajawan said that several investors have positively responded to invest for the Solar power projects soon in the North East and the government must soon implement them.”
However Rajawan said while expediting these projects the better option would be to sell solar power to India as Sri Lanka doesn’t have a proper storage system. Prof. Ranjith Bandara, MP, SLPP, said urgent steps are being taken by the government including setting up targets to reactivate State Owned Enterprises (SOE) that are not making profits.
“While this is being done, the government has also launched plans to increase the revenue of low income families and bring them up to the next level.