The Parliamentary debate on the International Monetary Fund (IMF) Extended Fund Facility (EFF) was held from April 26 - 28. The debate was attended by MPs of the Government and the Opposition who presented varying views on the subject. Here are excerpts from the debate:
We have embarked on the path of revival – President Ranil Wickremesinghe
We have now embarked on the path of economic revival. The entire country must support these efforts. I accepted the Presidency at a time when all hope was lost due to my confidence that the country could be rebuilt. We have already gained the trust of foreign banking and financial institutions. We are seeing signs of economic stability. We are allocating more for social security. Investors are taking an interest in Sri Lanka. We reached agreements with the IMF 16 times but did not fulfill the conditions. The 17th time around when we have received a permanent resolution we must get rid of long-term weaknesses and implement a new program. It will consist of several factors. One we have debt restructuring discussions to hold. We will discuss this with bilateral countries as well as private creditors. We need to restructure our debt. They have informed us to discuss domestic debt restructuring as well. We need a green digital economy. There is no other solution than the IMF agreement. Therefore, if there is no other practical solution we must approve this.
Paths have opened for international deals again – Prime Minister Dinesh Gunawardena
The people have not forgotten the difficulties faced by the country last year due to the devastating economic crisis.
This is not the first time we have gone to the IMF. The seniors in Parliament have forgotten that they played a part in the last 15 deals. No State sector employee has lost their job in the last 12 months.
We have not stopped their salaries or pensions. It is an example to other countries. We have faced tough times and are now recovering. We not only have the IMF deal but paths are opening for us to commence financial dealings with other international organisations.
The entire country has been fooled – Opposition Leader Sajith Premadasa
This crisis has happened due to the actions taken by those who received a mandate of 6.9 million votes in 2019. They gave tax breaks, lost Government revenue and blocked entry to the international markets. Now they are claiming that we can only achieve the GDP we had in 2019 by 2029. We will have to wait for five years. There is no mention of how we will bring back monies that were stolen. We must bring in an anti-corruption process. We must allow local investors to commence productive projects. We were assured domestic debt will be left alone. Now the entire country has been fooled and a domestic debt restructuring process has commenced. What will happen to the savings, banking system and the EPF?
This is not the time for popular decisions – Minister of Education and Leader of the House Susil Premejayantha
There are varying views on seeking IMF support. But if we have a financial issue we must obtain a loan. The loan will not be given out according to the way we want. Therefore, we must make sacrifices. The Rupee fell way before the current President came into power. The former President failed to manage the economy. We cannot make popular decisions now. The benefits of the IMF loan can be witnessed every six months.
We disagree with the conditions of the agreement – Chief Opposition Whip Lakshman Kiriella
This agreement has not been presented to Parliament. We are debating this without having the agreement in hand and are groping in the dark. We handed over the country with US$ 7.8 billion. Now those who bankrupted the country are attempting to rebuild it by going to the IMF. But it is too late. The Government must step down. We do not agree with the conditions in the agreement. Domestic debt restructuring, excessive electricity tariff hikes, tax burden and threats to the EPF cannot be borne.
We must understand ground realities – Minister of Transport, Highways and Mass Media Dr. Bandula Gunawardena
We must understand the ground realities. We carried on an economy we were not able to support following Independence. The people believe this crisis was caused by all Governments. Parliament is a main respondent to this. In 2003, the Financial Management Responsibility Act was brought with the intention of managing the budget deficit at 5 per cent since 2006. If it was implemented this crisis would not have occurred. Our entire economy is less than US$ 80 billion. No matter which Government is in power till 2029, we must repay over US$ 12 billion. The Hambantota Port was sold for US$ 1.4 billion. The greatest investment Sri Lanka received from Port City is US$ 1.4 billion. How will we secure US$ 50 billion to service our debts?
The debt bombshell will explode in 2026 – Leader of the Pivithuru Hela Urumaya MP Udaya Gammanpila
After realising that the crisis was intensifying, I was the first to propose to the Cabinet that we must approach the IMF. We must resolve both the Rupee and Dollar crisis. We went to the IMF not because we do not have Rupees but because we do not have Dollars. We are expecting the IMF to help us resolve the Dollar crisis but that is exactly what is lacking in this agreement. It has given solutions to the Rupee crisis by increasing taxes, curtailing Government expenditure and shrinking the State sector but has not given any solution to the dollar crisis. The debt bombshell of 2015 exploded in 2022. A similar event will happen in 2026.
We need a plan to bring in Dollars – Sri Lanka Freedom Party General Secretary Dayasiri Jayasekara
Whether we vote or not the Government can implement this. The country is in this situation due to the thinking that we did not need IMF support. No Government would have had another choice than approach the IMF. But we will fall into yet another debt trap in the next five years. If the solution to the dollar crisis is to obtain a loan, then anyone can do this. We are ready to extend our support to any program to bring in dollars to the country. The Government must bring in a plan to increase tourism-related revenue to US$ 7 billion.
No IMF conditions to resolve the National Question – Tamil National Alliance MP Sivagnanam Sridaran
We question the IMF executive board if it supports the Government’s anti-Tamil stance. The IMF has not imposed any condition(s) forcing the Government to resolve the country’s ethnic and constitutional issues. While the activities against the already suffering Tamils are increasing daily, the IMF is supporting Sri Lanka.
We will not be able to come out of the debt trap – MP Prof G.L Peiris
We must only celebrate the IMF deal if we can come out of this debt trap but the IMF says in 2027 we will need yet another US$ 1.5 billion. There is no way to save ourselves from this debt trap. The banking system is at risk of collapsing. Can we be assured that the EPF and ETF will not be affected by domestic debt restructuring? Over 20 percent of electricity supplies have been disconnected. Production has dropped. The Anti-Terrorism Bill is being presented to face a possible uprising of the people against these circumstances.
We are falling down a bottomless abyss – MP Wimal Weerawansa
We are still up to our necks in the crisis. Now there is a dangerous assumption that the IMF is the only solution to this. This is being claimed by those who are in the grip of imperial powers. How did Sri Lanka face a forex crisis as well as a Rupee crisis? Incorrect solutions are being given which is only worsening the situation. Domestic debt restructuring will destabilise the State banking and financial markets. Import revenue has dropped by 15.5 percent in the last three months. We are falling down a bottomless abyss. The IMF-only path is not a suitable one.
Social issues will remain – Leader of the National People’s Power Anura Kumara Dissanayake
It is not fair to call a vote when the conditions of the agreement remain a secret. Claims that the economy has stabilised are false. Social issues will remain despite the balancing of accounts. To resolve the rupee problem, they are suggesting we increase our VAT revenue. The price of all goods and services in society increases through the imposition of VAT. The banking system is based on trust. If it collapses, the banking system itself will collapse. To strengthen foreign reserves, it is proposed we sell profitable companies. It is not a solution to sell whatever one possesses to make a living after becoming destitute. This is not a transformation of the economic structure, which cannot be reformed without changing the political culture.