IMF loan, Sajith’s bad-mouthing & Anura’s silence
The IMF loan will not resolve Sri Lanka’s economic crisis. It will only bail the country out in its efforts to come out of the crisis. Of foremost need is to restructure the debts, without which Sri Lanka cannot do anything else.
Minister Bandula Gunawardena put it simply, when he said the country has to import fuel, gas, fertilizer, chemicals, foods, raw materials and machinery. Politicians might not know, but all importers know a letter of credit is needed to import goods. If other countries do not accept these LoCs, they will not ship any item to Sri Lanka, he said.
India and the Paris Club among bilateral creditors have given assurances to support the IMF’s approval of the extended fund facility. India gave it on January 16.
The Paris Club is an informal group of creditors, who find coordinated and lasting solutions to repayment difficulties of the debtor nations.
Its membership comprises Japan, France, Korea, Germany, US, Spain, Netherlands, Russia, Sweden, Austria, UK, Canada, Denmark, Belgium and Australia.
Main among other creditors are China and India, while Saudi Arabia, Kuwait, Hungary, Iran, Pakistan and Bangladesh are also included. Hungary too, has responded positively.
Most important among them is China, but its offer of a debt moratorium has not met favourably with the IMF.
The Sri Lankan government continues discussions in this regard, which is a very difficult task. No one readily offers it when Sri Lanka asks for a restructuring of its debts. All should be brought to a level field.
Restructuring debt with IMF’s bailout package is the somewhat easy solution before Sri Lanka. If there are others, they are more complex. The government has been successful in its efforts so far. Rather than from foreign sources, disruptions come locally.
Sajith Premadasa made a statement in Mathugama, which makes it clear that his aim is to sabotage a pact with the IMF.
He said in effect that a government by the SJB is not bound to implement any agreement signed by this government with the IMF.
Instead of standing straight and dealing with the IMF to gain favourable relief, the SLPP and the UNP both have gone down on their knees before it and agree to its biddings.
One thing should be told to the IMF – that a government by the SJB is not bound to implement any agreement signed by this government with it, he said.
Only a properly-managed economy can deal straight with the IMF. Had the economy been managed properly, no need would have arisen to plead with the IMF for a bailout package.
In the meantime, the pro-China JJB is keeping a complete silence over the IMF bailout package.
Its leader Anura Kumara Dissanayake has been careful not to bad-mouth like Premadasa. That is good. But, China’s caution is a cause for concern.
(Ajith Perakum Jayasinghe)
*Editor's Note: English translation of an article originally published on praja.lk
