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Saturday October 1st, 2022

Parties opposed to Sri Lanka seeking IMF help must offer alternatives: minister

ECONOMYNEXT – If some parties are opposed to Sri Lanka going to the International Monetary Fund (IMF), the government is ready to consider any alternatives proposed by those parties, a cabinet spokesman said.

Cabinet spokesman Minister Bandula Gunawardana speaking to reporters on Tuesday August 16 said critics of the decision to seek IMF support must offer alternatives.

Gunawardena was responding to questions about a comment attributed to independent MP Vasudva Nanayakkara on Monday that the group of independent MPs that he is part of cannot support President Ranil Wickremesinghe who he said was a caretaker president “operating within the IMF framework”.

Nanayakkara, who leads the Democratic Left Front, has always opposed Sri Lanka seeking IMF assistance, one time going as far to say “even if we die, we will not go to the IMF”.

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Minister Gunawardena said that Sri Lanka is a member of the IMF and that member states are expected to seek IMF assistance when facing a balance of payments crisis.

“Party and political agendas aside, one thing we must all understand is we cannot avoid international trade. No matter who is in power, without imports and exports a country cannot run. We are member states of the IMF. As a member, when we face issues in balance of payments, it is normal to seek help at an international level,” he said.

Gunawardana recalled that  Sri Lanka had gone to the IMF 16 times prior to the current round of negotiations. However previous IMF programmes failed due to successive governments not being able to implement IMF-recommended reforms which he said has resulted in Sri Lanka’s prevailing economic crisis.

President Wickremesinghe has repeatedly articulated his plans to work with the IMF and several rounds of negotiations have already been held, though there is still some uncertainty on when staff level agreement can be reached. The main opposition Samagi Jana Balavegaya (SJB) has also expressed conditional support for an IMF programme

“For the first time we have defaulted on foreign debt repayment. But we cannot avoid debt,” he said.

“If these parties can offer an alternative with their knowledge, we can consider that. As a country since we do not have such knowledge, to restructure these debts we have hired [the financial advisory and asset management firm] Lazard on a credit basis.”

He added that cases have been filed against Sri Lanka internationally for delaying repayments.

“This is the reality. If someone thinks this can be solved by kicking out international support, that is not practical,” said Gunawardana.

“If they can recommend a solution that doesn’t involve the IMF, we can consider it,” he reiterated.  (Colombo/Aug16/2022)

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