ECONOMYNEXT – Leader of the Opposition Sajith Premadasa is calling on all political parties to shed their differences and come together to pull the country out of its current economic morass.
In a statement released yesterday September 29, Premadasa pointed to the downgrading of Sri Lanka by Moody’s which he said would make debt on the international market more expensive and harder to obtain for Sri Lanka.
“Because of the downgrade interest rates we have to pay for Bonds and loans will go up and it will be very hard for us to raise money for ourselves even to pay our loans,” he said.
“The downgrading is an indication that the level of trust that the international community has in us has fallen,” Premadasa said in the address released on video.
He said the proposal to remove auditors oversight over government institutions and the abolishing of the Procurement Commission contained in the proposed 20th Amendment to the Constitution has caused this loss in investor confidence.
“With this proposal, we are sending a wrong signal to the international community,” he warned.
“If investors have no confidence in the country they will not come here and that will have a direct adverse impact on economic growth,” the leader of the main opposition Samagi Jana Balavegaya said.
We are a country that is facing a debt crisis. Our people need to know that from 2021 until 2025 we have to pay between USD4bn and USD5bn each year as loan repayments.
Because of the downgrade, Premadasa warns we will have to go to “Blackmarket lenders who will give us loans at very high rates.”
This raises the prospect that we as a nation can become bankrupt.
He said that if we have to draw on our foreign reserves then we have to limit imports which will also have an impact on economic growth and even our own exports.
“Our country has fallen into an economic situation which is very serious,”
“What is needed is a democratic solution and a better macroeconomic management policy. This must aim at providing sustainable solutions for the country’s most serious problems” he added.
“In order to do that we as a nation must come together casting aside political and other divisions so that we can escape a deathly economic trap we may fall into,” he proposed. (Colombo September 30, 2020)
Reported by Arjuna Ranawana