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Acknowledging that the country will not suffer another crisis:
If this plan were to change, the country’s progress would be seriously hampered and jeopardized:
Deputy Finance Minister Shehan Semasinghe stressed that the IMF’s approval of the second review and disbursement of the third loan in the process of taking Sri Lanka’s economy to new heights and saving the country from economic crisis has provided a guarantee for Sri Lanka to successfully build its economy both domestically and internationally.
Seemasinghe said no conditions had been put forward for Sri Lanka to approve the second review of the third tranche of the International Monetary Fund (IMF) loan.
State Minister Seemasinghe made the remarks at a special press conference held at the Ministry of Finance auditorium yesterday (13th) morning.
Minister Seemasinghe pointed out that the government took the right decisions in a timely manner and within a given time frame despite various challenges, and said that due to their success, the country’s economy has reached a stable level and if this plan is changed, the country’s development will be seriously hampered and jeopardized.
State Minister Seemasinghe further stated: “The Executive Board of the International Monetary Fund has approved the second review of the third tranche of the loan to Sri Lanka. Therefore, the government is confident of disbursing the third tranche and said it will definitely be disbursed.
“We received the first tranche of the IMF in March 2023 and the second tranche was disbursed in December 2023. So by 2024, the third tranche has been disbursed based on the staffing level agreement we reached in March 2023. $336 million will be disbursed as the third tranche and the IMF has worked to provide a total of $1 billion to Sri Lanka through these three loans. Basically, the IMF appreciated the steps taken by the President and the government to build the Sri Lankan economy and implement the reform program.
“We believe that the president, the people and the government made many sacrifices in saving the country from economic collapse in 2022 and moving towards 2024. We made it clear at the time that this reform process would be difficult in the short term, but would bring good results in the medium and long term. After the initial difficult period, we have now reached the stage of achieving results.
“When we had discussions with the IMF, one of the allegations the government faced was that opposition groups said the IMF is running the country today. We as a country requested the support of the IMF. We requested their support as a country in March 2022. Those discussions started in April 2022 and the necessary reform packages were discussed. The IMF has never forced any reforms or programs on Sri Lanka. When we requested support in the current state of the country at that time, they showed us the way to rebuild the collapsed economy and move towards an economy that will not collapse again, and the actions to be taken were indicated at that time,” he said.
The IMF pointed out decisions on public finance management, structural changes, moving towards debt restructuring for debt management, steps the government should take to eliminate weaknesses identified for good governance, etc. Then the government had to decide that by going down this path, Sri Lanka will become a country with a good lifestyle that the people expect, or we will live in a country where inflation continues to rise and cannot stop inflation of 70% in 2022. The President and the government had to make a decision on behalf of the people of the country. We made the right decision. We still stand by that decision today. Today, the numbers prove that the decision was right.
“The approval of this amount will greatly help us become more stable and stronger economically. We are currently in the final stages of our debt restructuring plan. We have not entered into any adverse deal with the bondholders. The IMF will not allow any adverse deal. Our creditors have not influenced us. We have held discussions with the bondholders. In our overall debt restructuring plan, we are mainly following two principles. It includes treating all creditors equally and dealing with them in a transparent manner. We are implementing the debt restructuring plan based on these two principles.” State Minister Seemasinghe said that the IMF pointed out the importance of taking the plan forward as it is very important.
He said it was clear that the process must be continued and that it should not be put in a dangerous situation. He said the IMF press release specifically mentioned some of the unique work that the IMF saw in the review, including measures taken for public financial management, the government’s commitment to structural changes, and especially to good governance in the country.
He added that steps taken by the government to eliminate fraud and corruption were appreciated by the IMF.
Posts Sri Lanka’s economic recovery receives international approval First appeared in Daily News.
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