ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe highlighted the public’s endurance limit amid International Monetary Fund (IMF) intervention at the Berlin Global Dialogue. “There’s a point beyond which you can’t burden these people. Now we are going beyond that point,” he said, before a panel of experts present on Day 1 of the forum.
The forum, held by the German state-owned international broadcaster Deutsche Welle (DW), brings experts from business and policy to find “joint solutions” for global economy and transition.
President Ranil Wickremesinghe had spoken on a panel which focused on the future of developing countries, post global crisis. “There are major issues we got through on the debt restructuring, but looking at some other countries, they won’t get through,” he said.
“For Sri Lanka it was difficult. We had no petrol, we had no fertiliser, people were on the streets, the government broke down, all our houses were set on fire.”
The president appealed to the experts in the room for solutions that ensure stability.
“You have to work on the basis of a solution which also ensures stability. Some of the proposals put forward do not enforce stability.”
Former Argentine Minister of Economy who had dealt with the IMF during his term was also present on the panel with President Ranil Wickremesinghe. He weighed in on the Sri Lankan debt crisis by commenting on the role of the IMF.
“Even though the IMF is supposed to play a counter-cyclical role in the global economy, it doesn’t. Today the IMF lending rates, the interest rate at which the IMF lends is not determined by a formula of the IMF, it’s determined by the monetary policy in the US, UK, Europe, Japan and China. These countries that issue reserve currencies.”
“The interest rates of those five countries determine the rate at which Sri Lanka borrows from the IMF, so that makes no sense,” he said. (Colombo/Oct4/2023)