Colombo (LNW): President Ranil Wickremesinghe said that the necessary steps will be taken to pass the best anti-Corruption Act in South Asia in Parliament soon.
The President revealed that the cabinet approval for the Bill has already been granted and said that he will discuss it with the Opposition representatives in the future and present it to the Parliament.
President Ranil Wickremesinghe said this during a discussion held at the Presidential Secretariat today (23) with the heads of media organizations.
Expressing his views further, President Wickremesinghe said,
Firstly, let me thank everyone of the media for your presence here today. As you know I have requested all of you to be present here to tell you about the IMF agreement.
We became a bankrupt country a year ago. This is the first time we have had to restructure our debt with the support of the IMF and our creditors.
And this is the first occasion we’ve had to restructure our debt with the support of IMF and our creditors. This is only the beginning. Once we’ve got the support, the financial assurances, it means that we are no longer considered a bankrupt state. We have to go to the next stage, which is to negotiate with all our creditors with the multilateral creditors, with the bilateral creditors and the most difficult of all, the private creditors.
Now that stage only once we concluded it that we will be in a position to go ahead without having to look back and with confidence. So this is not the end. This is, in a sense, only the beginning. Next is the negotiations with the creditors. And just as much as you are negotiating the creditors, we also have a four year programme. This is why I’ve asked Parliament to give me approval to approve this agreement. I don’t require it by law, but to have parliament voting for us for this agreement will strengthen us. The country has already voted for it. I think that from the reactions I have and, I would like to get the assistance of parliament.
It’s also necessary to show the creditors that the country has accepted the principle which is included in this IMF agreement.
So firstly, it’s a restructuring of the debt but is not limited to restructuring of the debt it’s restructuring of our economy.
Firstly, we have financial stability. Once we go through this process, we are increasing our revenues.
This is the most difficult era and we will stabilise government spending as they will explain the character of government spending and the income we have. But this will ensure that we have a surplus in the primary budget and increase revenues.
We are aiming at much better control of the government budget. And it’s not only that goal we are going to achieve, if we put our finances in a better condition.
But also we have to remember that the structural reforms we do will enable us to have a growth enhancing economy. We will liberalise further. There are those who think liberalisation is not a good word, and we will open it out for foreign investments. We are also looking at different areas of investment additional foreign investment in manufacturing. But it means we have to go up to the higher, end.
Responding to a question raised by a media person about how long it will take to pay off this debt for the country to move to a middle-income country in 10 years, the President stated that the first task is to approve this agreement and then proceed to restructuring the debt and the method of paying off the debt will be known only then.
Secondly, modernising agriculture and fisheries. Thirdly, making Sri Lanka a Regional Logistic Centre, certainly upgrading and expanding, tourist, digitalized economy, the green economy. So we are moving towards the new Sri Lanka.
My aim is, though most of us won’t be there by then, when we are in 2048 when 25 years have passed that we will be a high middle income country.
We can’t go on with economic stagnation, we can’t go on with low growth. We must remember that all the upheavals we had in the country relates back to this issue. We have had one in 1971, which related to unemployment and 1983 was not merely one of language but that the Tamil youth had no employment. The same in 1989. So we have had too much the, economic situation. The absence of growth has resulted in instability and bloodshed.
Now we have the opportunity of starting out a new, so it’s a historic process. What I’d like you is to, support us in this venture, the officials will be available to speak to any media personnel at any time to discuss what’s happening. But the future of Sri Lanka rests on whether we go ahead with this agreement or not, whether we implement this agreement or not.
If we don’t do it, we will be cursed by the future generations.
Let us first approve this agreement as the first task and then move on to restructuring the debt. Only then will we know how to repay the debts. We have not completed out programmes. Why have we not completed it? Because it came under political influence. If not, it came under public influence. It was the media that created public opinion. This time I urge the media to assist us in making this programme a success.
Not just that, when the MCC was presented they alleged that the country was to be divided. When the IMF was introduced, they said we were going to be dominated by the West. So it is difficult for us to do all this. That is why the media organizations were asked to join in making the 17th International Monetary Fund program a success.
This process is very difficult. We all feel it. This is a four-year process. It will end in 2026. Those who were with me over a long period and supported these policies are now speaking against me. So is it a big thing for those who were against me to support me? We must remember one thing. We are in a difficult place now. We can’t play the old games again. If we do that, we will fall again. Let’s forget the old games and the past and move forward.
We all made mistakes. At least now agree with this and support us. This money we received will be used to pay the salaries this month. It’s not stealing. These were lost because of the allegations of theft. Don’t spread such stories. These people who point fingers steal more than this. My salary is lower than those of you here. We need to change attitudes.
They accused me of coming to protect thieves. But we are bringing the best anti-corruption bill in South Asia in consultation with the IMF.
The opposition’s shouting did not bring anything. The Minister of Justice is also discussing this with the opposition.
We presented this to Parliament to get the support of all parties. No one can oppose this. Some new laws have also been introduced. We have taken several new steps.
We do not want to suppress the media. I hear the most criticism from the media. I also lost the media. I am the one who removed the criminal law imposed on the media. I was the one who gave the right to know the information. Independent commissions were brought to Parliament three times. So how do I suppress the media?
They ask to solve the Tamil problem. But while I was doing those things, they said that I was trying to get rid of the other problems together with Mr. Sumanthiran. No one in the media said that the accusation was not good. I have said before that we are working to solve the national problem. No media objected to it.
Everyone agreed to that in the parliament. Don’t create racism under the guise of it. One media organization is running a racist programme. The same thing was aired for four days. What would happen if someone attacked one Tamil person during that time?
It is okay to show protests against the government, but the protests should be shown as protests. And it should be shown that there is another side to it.
Not all people got onto the streets for the protest. There are instances where the same team went around the country. That is why I say, report both sides in a protest. I didn’t say don’t report on protests or post only those that praise me.
Why is the government in business? It is not the government’s job. During Mr. D.S. Senanayake’s time, nothing of this sort happened. But the country had money. Back then, the country had money to lend to England and build the Galoya project.
Now we are asking for money from China to build Moragahakanda. Which country has a law saying that government institutions should engage in business? We are aiming to develop rapidly as a normal country. Only we as a country say that the state should engage in business.
The government exists to maintain law and order and solve the problems of the people. Today, do we have a good education system? We have paid more to the petroleum corporation than for education last year. The electricity board has been paid more than for education. During Mr. D.S. Senanayake’s Premiership, none of these happened. When the private sector does business, the government collects taxes. Who owns the telecom in England? The private sector. It is the same in France and America. We should develop in the same way, or we could fall like North Korea. You tell me which one you prefer.
Expressing his views Minister Bandula Gunawardena said;
This is considered to be the first step taken to recover from the situation that the country has been in for a while, by reaching a basic agreement with the International Monetary Fund. We had ships coming with oil in the past, but we did not have dollars to pay for it. There was also a power cut. Even though the gas ships came, there were no dollars to buy the gas. Due to lack of fuel, people had to stand in queues for two or three days. This difficulty arose because of the long-term budget deficit in our country and the lack of sufficient government revenue to meet the expenditure. There was an unaffordable budget gap like never before experienced in the history of Sri Lanka. We have borne all the expenses under two methods under the budget gap.
We borrowed domestically and internationally. Money was printed as the loans obtained was insufficient. No matter who came to power, each of these governments continued to borrow. Finally, in order to obtain foreign loans, they had to go to the open market and borrow at higher interest rates by issuing sovereign bonds, away from concessional channels such as the International Monetary Fund, the World Bank, and the Asian Development Bank. Eventually, it turned into a bankrupt country that could not pay its foreign debt installments and was unable to meet the huge payments.
Organizations like Fitch Rating and Moody’s, which guide the settlement of international transactions, had cast our country to a very low level. As we had hit rock bottom, we became unable to issue letters of credit to import the goods we needed. Therefore, especially in a situation where the import of fuel is increasing by US$ 5 billion or more per year, the necessary suppliers stopped supplying us with goods.
A letter of credit by Sri Lanka required a third party guarantee. Because of that, the banks of other countries had to pay additional fees for providing guarantee certificates to the importers of our country.
If for some reason this agreement could not be signed, no matter which government would come to power, we will not be able to issue a letter of credit and import fuel, fertilizer, gas or fuel that the country needs.
According to the agreement program we prepared, we have been able to change this situation and restore international credibility. The biggest problem now is that we have not restructured the debt pile of more than 50 billion US dollars. As the Opposition says, it is difficult for us to provide that money.
The country received 1.4 billion US dollars from the Port City project. Hambantota Port was sold for 1.4 billion US dollars. If we take these two main projects, only 2.8 billion US dollars have been received. We can’t bridge that gap when we have to pay more than 50 billion dollars. Together with the Central Bank and the Ministry of Finance, the Government decided to get expert knowledge to restructure the debt from France’s Lazard Company and the Clifford Chance Company is handling the litigation because the debt cannot be paid. The country is in such severe national danger. We need to find an answer to the real economic situation in this country. Scholars in the country should explain this. This is now the last chance.
We have signed 16 agreements with the IMF previously. It has not been possible to finalize anything that was agreed upon. Now after completing all the activities, this relief was obtained. The President personally intervened in this to a large extent. Government decisions may not be popular. The President has always told the Cabinet that unless difficult decisions are taken, there is no country or future. All these agreements were presented to the Parliament without hiding anything. If there is any other option other than this, then someone should present it to the parliament. It also saves the government a lot of money. In that case, we won’t have to pay the French company Lazard. If there is someone who can give us a better option to get out of this debt, then we can implement it. This is a more complex problem than we think. So, help us to publicize this issue in a fair manner.
Central Bank Governor Dr. Nandalal Weerasinghe also expressed his views;
If the debt was not restructured, we would have had a foreign debt burden of 06 billion dollars per year for many years. Because it is difficult to pay, the debt payment is temporarily suspended and this process is used to restructure the debt. We are unable to pay under the current terms, so we are asking the commercial institutions and private sectors and the respective governments that have granted us loans, to give us a relief period.
The first step in that process is the assurance given by the bilateral countries. The International Monetary Fund has set targets for debt sustainability. In order to reach that sustainable level, each country has given an assurance that they will support us.
The next step is to negotiate according to that guarantee and request that we cannot pay the debt at the rate of 06 billion per year at this moment, but to give us a long term payment plan with a relief period.
We have a responsibility to repay the loans we borrow, otherwise lenders may refuse to lend to us in the future. It’s important to note that we are currently facing difficulty in paying off our debt, and as a result, we have been given an opportunity to repay in a more flexible and concessional manner rather than defaulting on the payment.
As an example, suppose we currently have a debt of 50 billion that we are supposed to repay in 10 years. In this situation, we may request a longer repayment period of 20, 30, or more years to make it easier for us to pay off the debt.
The current discussion centers around the fact that we cannot allocate more than 4.5% of our GDP per year towards debt repayment.
Therefore, it is being proposed to reduce the debt repayment amount to meet this target, and to extend the repayment period over a longer timeframe. The ultimate goal is to make the debt repayment manageable and sustainable for our financial resources.
It should be noted that there is a possibility of taking new loans in the current situation. In particular, one of the loans being considered is from the International Monetary Fund (IMF). However, it is important to highlight that this proposed loan would be a long-term, concessional loan with a low interest rate, provided by organizations such as the World Bank or the Asian Development Bank, rather than a short-term loan from the market. Such loans have a different nature than commercial loans and would not necessarily affect the sustainability of our existing debt. As such, there would be no obstacle to taking such a loan if deemed appropriate.
Minister of State for Finance Ranjith Siyambalapitiya, Minister of State Dilum Amunugama, Senior Adviser to the President on National Security and Chief of Presidential Staff Sagala Ratnayake, Secretary to the President Saman Ekanayake, Secretary to the Ministry of Finance Mahinda Siriwardena, Secretary of the Ministry of Media Anusha Palpita, Governor of the Central Bank Dr. Nandalal Weerasinghe, Director General of Presidential Media Dhanushka Ramanayake, Director General of the Government Information Dinith Chinthaka Karunaratne and heads of media organizations were present on this occasion.