With the country allegedly on the verge of an economic crisis, what with massive loan repayments due this year in a climate of uncertainty, President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa have embarked on different administrative paths, the main opposition United National Party (UNP) said.
UNP MP Hesha Withanage told reporters today that, with the government clearly split into two opposing camps resulting in severe economic mismanagement, the country has been put in an unenviable position where it can no longer apply for loans.
This is against a backdrop of a large loan repayment installment due January 31, he said.
Sri Lanka’s external debt repayments are USD 4.8 billion for 2020, and payments for the first half of the year is already financed, according to Central Bank Deputy Governor Nandalal Weersinghe, who told EconomyNext in December 2019 that the government would have to raise a “certain amount of commercial financing” to furnish the repayments.
The UNP MP accused the government of not having a concrete plan in place for managing the situation, adding that apart from the debt and interest repayments, the government is also subjected to risk payments as lenders are not satisfied with the economic situation of the country.
The Samurdhi welfare and social protection scheme is in danger of being discontinued as a result of this situation in about three to four months, the MP warned, along with reductions in state sector salaries.
MP Withanage also accused the government of incurring a loss of Rs 538 billion from the recent VAT reduction and other concessions that, according to him, was a politically motivated move to “get back at the UNP”.