Our country, which was declared a ‘Bankrupt State’, unable to repay its debts, is now free from the ‘Bankrupt’ tag, and is on the path of recovery. The Government has now taken steps to temporarily delay the repayment of loans amounting to US$ 100 billion. The present Government has prepared a programme to continue paying the loans and installments from 2028, after discussions with the lenders. Debt Restructuring (DR) and Domestic Debt (DD) optimisation have been successfully implemented so far. There will be a debate on it tomorrow (2) and the day after (3) in Parliament. Here, several experts express their views on the subject.
Now is the time to think deeply
Professor Sirimal Abeyratne – Former Dean, Department of Economic Studies – University of Colombo
The main challenge faced by our country in the recent past was the inability to pay back the loans taken from both local and international lenders. Economically, we collapsed. Finding an answer to this was one of the biggest challenges faced by the rulers and authorities.
In this backdrop, Sri Lanka took steps to seek help from the IMF. In March 2023, the IMF decided to provide a Credit facility to Sri Lanka. Accordingly, two installments have been received so far. More than US$ 1 billion has already been received. Sri Lanka prepared a relief programme to repay its DD. A relief programme has been prepared for the repayment of bilateral foreign loans. DR agreements have been signed with India, China, Japan and the Paris Club. Now we have a grace period of three years to repay the loan at a lower interest rate. But we cannot remain in these concessions forever. What should we do as a country? Now is the time to think deeply.
National duty to free the country from debt
Dr Prathibha Mahanamaheva – Former Prof. of Law, Dean Law, Law Faculty, Technology University, Jamaica, West Indies
Everyone should work to free the country from debt. It is a National duty. Leaders of all 225 MPst should think so. Now our country is in the process of recovering. I will take two international examples. There was a serious debt problem in America. They were unable to pay their debts. Both the ruling Republicans and the Democrats at the time came together to save their country from that crisis. The leaders of our country should also follow that example. There was a debt problem like this in India. Then India’s Prime Minister Dr. Manmohan Singh and the Opposition leaders came together and implemented a programme to free the country from debt.
Build a strong Economy that can repay the debt
Professor Ramesh Abubakar – Vice Chancellor of South Eastern University, Oluvil
This is the 17th time we went to the IMF seeking Credit facilities. Accordingly, domestic Credit was optimised first. Second, bilateral foreign Debt was restructured. That is what was done recently. Accordingly, the Paris Club, India, Japan, China etc. were subjected to bilateral DR. That is a victory for us as a country. Stalled development projects should be resumed so that they can be effectively used for Economic development to help generate income. With such a programme we can build a strong Economy that can repay the debt in the future.
A victory for us to have won International confidence
Ravindra Gayanath de Silva – International Advisor on Migration
Restructuring of bilateral foreign Debt was successfully achieved on the basis of international confidence built in Sri Lanka. It is a big victory for us as a country, that we were able to win international confidence like this. As it was difficult to repay Sri Lanka’s domestic and foreign loans, what we needed to do was to get concessions for that. It doesn’t happen automatically. For that, we have to negotiate with the Creditors. It is a very difficult task. Here, Sri Lanka being able to access an extended Credit facility from the IMF has been a great strength. On the basis of reaching an agreement with the IMF, we were able to talk to bilateral Creditors and get concessions.
Focus on Local Industrialisation to improve Entrepreneurship
Dhammika Samarawickrama – Consultant, Ministry of Industries
Sri Lanka should take steps to achieve faster Economic development. Sri Lanka, which has recorded negative Economic growth for six consecutive quarters, is currently entering a period of Economic growth. It is the beginning of an optimistic journey. But we must immediately move towards an Export-oriented Economy.
DR is very important at this point. We should be happy with the agreements reached in this regard. But we have no progress in that. We can no longer live on Credit. We must stand up for ourselves. We should focus on local industrialisation as well as generating large Revenues from providing Services. The best thing to do for that is to improve our Entrepreneurship.
Entrepreneurship the backbone of our country’s Economy
Nawaz Rajabdeen – Chairman, Federation of Micro, Small and Medium Enterprises
Sri Lanka has reached a Credit agreement with the IMF. With this initiative, we have been able to get funding and services even from other institutions internationally. As a result, the Asian Development Bank recently provided a concessional loan of US$100 million. This was given to develop Entrepreneurship in this country. The money received from that should definitely go to the Small and Medium scale Entrepreneurs living in rural and semi-urban areas of our country. They are the backbone of our country’s Economy.
Jayasiri Munasinghe
