Sri Lanka is at the final stage of receiving an International Monetary Fund (IMF) bailout as a solution to the current economic crisis. But is the IMF the only solution available to Sri Lanka or do we have other alternatives? What will other parties do if they sweep into power? The Sunday Observer asked several party leaders for their opinions this week.
IMF is the best and only solution - State Minister of Finance Ranjith Siyambalapitiya
In a situation such as this the IMF is the best and only alternative. It is not possible to find a better alternative. This will provide us with the necessary financial support and change the image of our financial affairs. There is no similar alternative to the IMF. But IMF support was delayed. We should have approached them two years ago. Many, including ministers, resisted this.
The IMF has not imposed conditions and they have merely provided guidance with the intention to strengthen our economy. We must increase taxes to increase government revenue. We must increase government earnings if we are to recover without IMF support. But this will burden the people at a time when there is high inflation. We will have to make sacrifices to recover. IMF discussions have reached the final phase. We will be able to reach the expected status soon. We received support 16 times before while having a strong economy. Now we are facing it while in economic decline. This is why there was some delay but we believe we will be shown a green light soon.
Opposition and Samagi Jana Balawegaya leader Sajith Premadasa
All attempts to elicit a response from Opposition Leader Sajith Premadasa proved futile.
IMF support alone not necessary to recover - SLFP leader and former President Maithripala Sirisena
The IMF’s support itself is not necessary to recover from the current economic crisis. There are many other countries we can request help from. But the issue is no one is willing to support the current government. There are those willing to help a government that has no Rajapaksas. First we must eliminate corruption. The President, Prime Minister and Ministers must be clean and sincere in their efforts.
IMF support necessary, but Govt has become a group of yes-men - Member of Freedom People’s Congress Prof G.L. Peiris
There is no point discussing if we must go to the IMF or not. The Government has already sought their support. But it should have held the discussions in a different manner. We should have presented the real situation of the country and sought their support. We should have told them what we are able to do rather than be yes-men. Agreeing to these conditions put forward has led to a tragic situation.
We oppose these conditions. The Government says the people’s sufferings are due to IMF conditions. How can it be so? This isn’t the first time we went to the IMF. Is the electricity tariff hike, interest rate hike, tax hike because of the IMF? The Government has blamed the IMF for all this. We must seek their support but not be yes-men.
Leader of the National People’s Power Party MP Anura Kumara Dissanayake
All attempts to elicit a response from NPP Leader Anura Kumara Dissanayake failed.
IMF, the only divine help available for Govt - Leader of the Freedom People’s Congress MP Dullas Alahapperuma
There is nothing wrong in seeking IMF support but the issue is with accepting their conditions without any opposition. The Government has lost the support of all friendly countries. Arab countries are upset with us due to the attacks on Islamic culture. India, China and Japan are also not in good terms with us. We have announced we are bankrupt. It is more important to remove this seal of bankruptcy before seeking IMF support. The Government is making a mistake by accepting all conditions put forward by the IMF.
Even when the war at a critical stage and we had allegations of human rights violations against us we were able to secure IMF support. We are only to receive USD 2.9 billion for four years. In other words we will only receive USD 725 million annually, or USD 60 million a month. This is not a solution to the economic crisis. The country can be rebuilt through the concept of trust even without IMF support. But the IMF is the only solution available to this government as no other country or organisation is offering them any help.
Crisis cannot be resolved through the IMF alone- Communist Party Leader D.E.W. Gunasekara
We have received three types of foreign debt. Bilateral loans, multilateral loans and sovereign bond loans from international financial markets. Nearly 40 percent of loans have been taken from the international financial market. The rest are multilateral and bilateral loans. Our foreign debt is USD 52 billion while our domestic debt is Rs. 15 trillion.
The main issue is the loans taken from the international financial market. These have been obtained in 2007/2008. This debt trap has become common the world over. We will receive IMF support in four instalments but we will not be able to cover our debts through it. Therefore, we cannot recover through IMF loans alone. We need a long term plan. We must increase our revenue. This is why the Government has increased taxes. There is much opposition to this. The private sector is also to be blamed for the current situation.
Country cannot be rebuilt through IMF - Leader of the National Freedom Front MP Wimal Weerawansa
The Government is implementing the solutions provided by the IMF. Interest rates have been increased to 30 percent. The tax policy is being decided by the IMF. How can a country recover in this manner? The increasing pressure will lead to more businesses closing, resulting in unemployment. Will the country recover through increased inflation and unemployment? The Governor of the Central Bank says the economy will be shrunk. We do not accept that the country can recover through the IMF.
Even the IMF at one point indicated to the Sri Lankan Government to borrow from International Sovereign Bonds (ISBs). During the good governance the government borrowed USD 16 billion from ISBs. We now face the interest pressure from those loans. The alternative is to go for a strategy that empowers our country’s domestic manufacturing industries.
Tamil National Alliance MP M.A Sumanthiran
All attempts to elicit a response from TNA MP M.A. Sumanthiran failed.
Plan vital to rebuild country Democratic Left Front Leader MP Vasudeva Nanayakkara
The IMF is an organisation that consolidates the power of the world’s major financial rich. They intervene in crises of countries like ours and set conditions allowing for financial capitalists to pull the resources they need from our countries. Also, the burden of the crisis is placed on the people. Even if the upper class is taxed according to the conditions put forward, the upper class avoids paying taxes. The Central Bank Governor says that difficult and painful decisions will have to be made. These are felt by common people.
In our country, we should establish an organisation for debt settlement and negotiate debt payments with the agreement of the creditors. Creditors should be told how to get out of the economic crisis. It should be pointed out how to get more income from the property owned by the government. Employees should be added to the management. Customs, Income Tax, Excise departments should be reformed. Government revenue should be increased. Necessary goods for the country should be manufactured locally. Exports should be increased. Taxes on the upper Capitalist class should be increased. Government support should be given to industries and exporters. Instead of submitting to the IMF, we should formulate a plan to rebuild the country.