(National People’s Power Press Conference – 2024.03.14)
A meeting was held between representatives of the International Monetary Fund (IMF) and a delegation from the NPP at The Shangri-la Hotel in Colombo on 14th March. As NPP National Executive Committee Members, Muditha Nanayakkara and I, along with members of the Economic Council Dr. Harshana Suriyapperuma, Prof. Anil Jayantha, Prof. Seetha Bandara, and Sunil Handunnethi, participated in this meeting. Peter Brewer, the senior mission head of the IMF, and three female representatives from the IMF also participated. This press briefing is to inform the public of the basic essence of the discussion.
The main objective of the government’s engagement with the IMF is to restructure both domestic and foreign debt. Despite the signing of agreements some time ago, foreign debt restructuring has not been successful. Our representatives have inquired about the time frame and the progress of external debt restructuring. We asked about the exact timeline for the completion and also about the current progress. The IMF officials clarified that they could not provide a specific timeline for completing the restructuring work. They stated that discussions are ongoing and that the expected restructuring by the government had not yet taken place. They emphasized that the measures such as obtaining a grace period for loan repayment, reducing interest rates, and forgiving a portion of the debt had not yet been implemented.
We also questioned the steps taken to combat fraud and corruption in Sri Lanka. Despite the government’s claims of commitment, it has failed to make any practical progress. To compound matters, a glaring example of this lack of commitment is the recent appointment of a person with questionable integrity as the Chairman of the COPE committee, despite a thorough investigation into the Central Bank bond scam under the chairmanship of Comrade Sunil Handunnethi in the COPE Committee. Ranil Wickremasinghe set this example for the world by breaking the tradition that the chairmanship of the COPE Committee should be given to a member of the opposition. We pointed out that whatever agreements the government signed with the IMF, they have practically broken the trust.
The President recently invited the opposition to attend a meeting with representatives from the IMF. We raised concerns about the absence of IMF delegates, to which they clarified that they had not been invited by the government to participate in the meeting. The President publicly stated that opposition members are invited to engage in talks with IMF representatives. However, the government’s actions have deceived the entire nation through the media. The RW government, which has signed agreements with the IMF in closed doors, has raised all fees, increased taxes, and sold the country’s resources, perpetrating a significant fraud. The opposition was invited to a meeting with the IMF, which was attended solely by government representatives, without any IMF representation. MP Sumandiram raised concerns about the non-submission of technical assistance reports signed with the IMF. The IMF representatives stated that it is the government’s responsibility to provide these reports to MPs. Despite the government’s claims of transparency, none of these crucial reports have been disclosed to the public. When Basil Rajapakse was the Finance Minister, his signing of agreements with the IMF was questioned by Ranil Wickramasinghe. Basil Rajapakse stated that those confidential reports cannot be submitted. Ironically, this is exactly how Ranil Wickramasinghe operates today.
We emphasized to the IMF delegates that Sri Lanka’s economy has not only collapsed but also revealed serious weaknesses within the state system. We stressed that rebuilding the economy requires a fundamental shift in the existing political culture. Regarding the agreements signed by the current government, we informed them that clauses related to burdening the people and the sale of public resources will be amended under our control. This was the focal point of our discussion today. Based on this fundamental factor, we highlighted the necessity for debt restructuring action.
Answers to the questions raised by journalists:
Q: Did they give any idea regarding the next loan installment
A: It wasn’t discussed. It will be a decision taken from IMF side.
Q: Will they be tempted to take action like withholding the loan installment with the points you have raised, including not stopping corruption?
A: We did not ask them to do that. They did not indicate they would stop either. Considering the current economic situation in Sri Lanka, we are not inclined to reject the loan installment. We did not mention anything like that, and they did not bring it up either.
Q: Has it been decided to take up the debate on the no-confidence motion against the Speaker on 19th and 20th?
A: The conduct of the Speaker is unacceptable. It is biased. His actions during the appointment of the Inspector General of Police were entirely illegal. Four members supported the appointment of Deshbandhu Tennakoon, two opposed it, and two remained silent. Those two staying silent were defined as opposed, and the Speaker’s vote was used, which is illegal. He did not vote at the time of voting and informed his decision through a letter afterwards. The Speaker’s biasness persists, so we will definitely vote against him.
Q: Didn’t the IMF know the real situation in Sri Lanka until the matters were presented in the discussion
A: They were unaware of some aspects. For instance, they did not know about the new appointment of the Chairman of the COPE committee. We briefed them about how the appointment process was taken in Parliament. However, some facts were already familiar to them. For example, they conducted research on the lives of estate workers in Nuwara Eliya.
Q: Do they know that the people of Sri Lanka are living in hardship?
A: We explained the situation to them with the facts. Whether they understood or not, that should be asked from them.
Q: Do they agree to amend the terms under your control? Do they like the fact that terms are changed from one government to another government?
A: There was no discussion about agreements. We have made our position clear. We emphasized that we have no objection to continuing talks with the IMF, but we insisted that these conditions should be reviewed due to the suffering of the people.
Q: Are they satisfied with the performance of the present government?
A: We did not discuss political issues. They mentioned that many people do not understand the 129 points contained in their report. We refrained from commenting on political matters, and they did not offer any comments either.
Q: You said there were adverse parts of the agreement. Are there any additional conditions other than prevention of fraud, corruption, and sales?
A: The initial Memorandum of Understanding (MoU) with the IMF signed on 2nd March 2022 outlined policies based on five main points: raising taxes and removing tax concessions, restructuring state-owned enterprises, devaluing the rupee, fixing energy prices, and fighting corruption. Other technical points were presented based on these five basic points. They referred to it as the “Fight Against Corruption” at that time. However, we highlighted that this process did not translate into action. Controversial frauds persist in revenue-generating institutions, including the Inland Revenue Department. The excise department’s liquor sticker scams continue unabated. The main company responsible for the Central Bank bond scam is still involved in significant alcohol tax fraud.
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