2 March, 2024

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SL Debt Justice Collective Writes Open Letter To IMF On DDO 

An International Monetary Fund (IMF), team is in Sri Lanka from September 14-to 27. While national experts have raised concerns about the legitimacy of the IMF engaging in Domestic Debt Restructuring, amid questions about transparency, Data accuracy, veracity, and authenticity in the IMF’s debt restructuring operations, a group of academics and activists identifying themselves as part of Sri Lankan debt justice collective has written an open letter to the International Monetary Fund (IMF), regarding the country’s Domestic Debt Optimisation (DDO) program.

This is also due to the failure to adequately release the relevant Data and computation of both the IMF’s Internal and External Debt restructuring. Concerns about the Debt Data pertain to the IMF engaging in domestic debt restructuring and converting Rupee denominated debt into US Dollars with the USD Debt Numbers being inflated to present a dire country-level scenario as a precursor for an IMF Firesale of Sri Lanka’s strategic assets in a context of escalating Global Geopolitical tensions and Cold War.  

Questions about the IMF’s conflation and inflation of domestic and internal debt data and currency conversion have been compounded by questions regarding Sri Lanka’s debt data Security, accuracy, veracity, and authenticity. There have been significant cyber and data wipes and hack of the Sri Lanka Government Cloud Data Storage system and encryption of Government emails in recent times. 

Increasingly, in age of Artificial Intelligence (AI), Deep Fakes and data scraping to game numbers and narratives, international bankers and experts now recommend obtaining printed bank statements or hard copies. While, the Government of Singapore refuses to even disclose how much its reserves are, it is a matter of concern that various numbers games are being played with Sri Lanka’s Debt Data by a gravy train of experts amid concerns about the accuracy, veracity, authenticity, and transparency of the IMF Debt Restructuring in a context of escalating Cold War and Geopolitical Economic turbulence.

Following are excerpts from the Debt Justice Collective’s Open Letter:

We are part of the Sri Lankan debt justice collective that has been working with Debt Justice UK to campaign for meaningful debt relief for Sri Lanka. In the wake of the IMF agreement with the Sri Lankan Government in March 2023, a smaller group of us wrote to the IMF delegation on 5 March 2023, setting forth a series of questions about how the IMF intended to ensure a sustainable, equitable and just plan (1).  Since then we have been alarmed to observe that our words have largely fallen on deaf ears.

Given the IMF mission’s current visit to Sri Lanka, a larger group of us, who work on Sri Lanka or are from the country, take this opportunity to reiterate our concerns and urge the IMF to meaningfully engage with all stakeholders.

For brevity, we set out our key concerns below. They revolve around particularly, the domestic debt optimisation (DDO) process. Many of our demands and concerns echo those raised by Sri Lankan trade unions, and civil society actors in their recent discussions with the Governor of the Central Bank of Sri Lanka (CBSL).

By way of context, the IMF staff report considered by the Executive Board issued on March 23, 2023, notes the following key priorities in the implementation of the Extended Facility Fund (EFF) program:

  • Strengthening the social safety net
  • Revenue-based fiscal consolidation
  • Enhancing growth by reducing corruption vulnerabilities
  • Rebuilding external buffers by improving international reserves
  • Strengthening institutions and governance 

The staff report specifically states that an important priority of the program will be, ‘to protect the vulnerable from the impact of crisis and policy adjustments’ (p32, para. 46).

With this in mind, we have the following questions for the IMF delegation to address, seek clarification from the Sri Lankan Government and ensure accountability:

A) How does the Government’s proposal to seek DDO by placing the exclusive burden on the Employees’ Trust Fund (ETF) and superannuation funds, particularly, the Employees’ Provident Fund (EPF), reconcile with the IMF’s commitment to prioritise the protection of Sri Lanka’s vulnerable and social security systems?  The EPF, a majority of which earn less than Rs 100,000 per annum (circa $3,100.00 per annum), is the only social security fund for the working poor in Sri Lanka, many of who keep afloat the country’s key foreign exchange earning sectors (apparel and tea, for instance).

B) Aside from questions of socio-economic justice, the CBSL Governor, as a custodian of the EPF, is unable by law to deplete its resources.  How does the current proposal therefore satisfy the IMF’s commitment to prioritising good governance and accountability?

C) Trade unions as well as Members of Parliament, (MP) such as the chairman of the Committee of Public Finance, Dr. Harsha de Silva, have spoken in Parliament about the opaque nature of the DDO process. The Government and the CBSL have made little effort to engage the members of the EPF and seek their opinion about subjecting their pension fund to DDO.  Key information on EPF and DDO has also been withheld from Parliament, preventing the MPs from making an informed decision on DDO. Is the IMF not concerned that this undermines the commitment to transparency, accountability and good governance identified as priorities in the IMF staff report?

D) The IMF staff report is explicit about the need to reduce corruption vulnerabilities.  Trade union leaders and civil society activists who held a meeting with the CBSL Governor on 5 September, 2023, outlined several avenues of revenue generation to address debt sustainability issues.  These include addressing the issue of illicit capital flows and tax evasion. The Global Financial Integrity (GFI) estimated that Sri Lanka has lost $40 billion as a result of illicit capital flows. The Auditor General of Sri Lanka revealed that a massive volume of tax revenue worth Rs.904 billion was lost due to tax evasion. We believe the ability of a government to secure foreign exchange earned through international trade and amass tax revenue is a cornerstone in ensuring fiscal stability and financial sustainability. In this regard, both illicit flows and tax evasion that the trade unions underscored are related to corruption around the government and corporate sector business corruption that remain unaddressed in the country. How does the Governance Diagnostic proposed by the IMF, factor in these issues?  What steps is the IMF taking to ensure that the Government of Sri Lanka (GoSL) strengthens and addresses corruption vulnerabilities?

E) Is the IMF satisfied that the GoSL, and the CBSL are ensuring transparency of communication around the EFF program?  While press releases and briefs in English are made available, what steps are being taken to share information in the local languages – Sinhala and Tamil? This is essential to ensure that the population of Sri Lanka is aware and able to make informed decisions in relation to programs of action being implemented in their name.

F) The IMF should also note that the debt negotiation process is being steered by an unelected head of state who has been postponing public elections, closing down avenues for redress via the judicial system and cracking down on dissent. Parallel to the burgeoning burden of debt restructuring placed on the people, the President and the Government are proposing to implement new draconian anti-terror laws designed to further constrain democratic rights to free speech, free assembly and public dissent. Is the IMF not concerned that this contradicts its commitment to strengthening institutions, transparency, accountability and good governance in Sri Lanka?

We raise the above concerns for your attention because – as the IMF itself notes – the impact of the debt crisis on low-income groups in Sri Lanka is severe.  The UNDP’s (2023) multi-dimensional vulnerability index estimates that more than half (55.7%) of Sri Lanka’s population faces multiple vulnerabilities.  This is a staggering 12.3 million people in a country of 22.2 million people.  We will not recount the World Bank›s estimates on increasing poverty or UNICEF›s concerns about spiralling malnutrition.  However, we bring these to the attention of the IMF mission as both the GoSL and the CBSL Governor appear to be seeking debt sustainability, where the interests of private creditors (external and internal) are given precedence over the people of Sri Lanka. This is especially ironic given that in 2013, Ranil Wickremesinghe raised the point in Parliament that the bulk of Sri Lanka’s external debt is odious, and should be cancelled without oppressing the poorest communities of Sri Lanka.

With this in mind, we look forward to hearing how the IMF will ensure the delivery of its own publicly expressed commitments to ensuring equitable, sustainable, transparent and accountable debt relief to Sri Lanka.

Yours sincerely,

Signatories:

1. Anne M. Blackburn, Prof Cornell University, USA

2. Arjun Guneratne, Prof Macalester College, USA

3. Harshana Rambukwella, Prof NYU, Abu Dhabi

4. Jeanne Marecek, Senior Research Professor and William Kenan Prof Emerita, Swathmore College, USA

5. Howard Nicholas, Prof Emeritus, Erasmus University of Rotterdam

6. Kanchana N Ruwanpura, Prof University of Gothenburg, Sweden

7. Kanishka Jayasuriya, Prof Murdoch University, Australia

8. Kiran K Grewal, Prof Goldsmiths, University of London, UK

9. Ruvani Ranasinha, Prof King’s College London, UK

10. Vasuki Nesiah, Prof NYU, USA

11.Dr Amali Wedagedara, Independent Post-Doctoral Researcher, Sri Lanka

12. Dr Eva Ambos, Research Fellow, University of Tübingen, Germany 

13.  Charith Gunawardena, Ex-Elected Councilor, London Borough of Enfield, U.K.

15. Heshani Sothiraj Eddleston, Filmmaker, Centre for Pesticide Prevention, University of Edinburgh, U.K.

16. Dr Kaushalya Ariyarathne, University of Colombo, Sri Lanka

17.Dr Mario Gomez,  Executive Director, International Centre for Ethnic Studies, Sri Lanka

18. Dr Mythri Jegathesan, Associate Prof Santa Clara University, USA

19. Dr Narayani Sritharan, Post-Doctoral Fellow – AidData, William & Mary, USA

20. Dr Nicola Perera, University of Colombo, Sri Lanka

21. Dr Nimanthi Rajasingham-Perera, Associate Prof Colgate University, USA

22. Dr Sharika Thiranagama, Associate Prof Stanford University, USA

23. Dr Shyamala Gomez, Executive Director, Centre for Equality and Justice, Sri Lanka

24.  Dr Shyamain Wickramasinghe, Research Fellow, Sussex University, U.K.

25. Dr .Darini Rajasingham-Senanayake, Independent Researcher, Sri Lanka

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Latest comments

  • 15
    5

    This man Ranil who with his wife went to the Queens funeral and Kings coronation was never elected by the people of this country to be a president. He was a bogus representative at the above ceremonies. In fact the people of this country did not even want him in parliament, Ranil W was defeated at the parliamentary elections and his party the UNP got barely 1% of the general vote !

    Even at the UN he has no moral right to represent this country.

    That he is a fraud and a bogus conman is obvious when you watch his interview with an American TV presenter ( I am not for India or China but for Sri Lanka interview ) .Any intelligent person will realize how shallow this man .Because he is such a mediocrity he does not even realize how absurd he is.

    In that interview among a lot of nonsense Ranil attempts to analyse the defence pact between USA,UK and Australia ,obviously an attempt to restrict China. These are all successful First world countries with long military histories and strong armies. Ranil this utter failure representing a failed country says US has blundered by getting UK into the pact because US planes will have to defend UK navy and in the process lose 75 planes !

    • 10
      4

      Aiyoooooooooo desperate deepthi silva
      Forget Ranil for a second and read below:

      Hyundai to expand in India
      Plans to build an assembly plant for electric vehicle (EV) battery packs
      Excerpt:
      [Hyundai Motor Company this week announced plans to invest INR200bn (US$2.4bn) to strengthen its operations in India, the world’s third largest vehicle market after China and the US.

      The automaker’s local subsidiary, Hyundai Motor India (HMIL), plans to build an assembly plant for electric vehicle (EV) battery packs in Chennai, Tamil Nadu state, where its existing vehicle manufacturing operations are based. The funds will also be invested in existing factories for the production of EV models as well as new internal combustion engine (ICE) vehicles for sale locally and for export.

      HMIL managing director Kim Un-soo said: “The long term investments will help enhance our manufacturing capacity, enabling us to make the best EVs and ICE vehicles in Tamil Nadu for the rest of the world.”]


      I suggest stupid Lankies shut their mouth for a while enabling Sri Lanka to be part of Hyundai’s supply chain initially at least.

      • 8
        8

        Vedda the dream peddlar !

        I think there is a more professional dream maker in Sri Lanka. His followers call these dreams – vision.

        He has not achieved any dream for 50 years. The people have realized all this dreaming( vision) is only a creation of a corrupted mind and an excuse for being a humbug non-performer.

        All his life he has been telling us that Rajapaksa family are corrupt and murderous. He has however not proved any case against them. Today he is with them sharing power and protection. Many Rajapaksa gangsters went to NY with him and his wife.

        But he keeps dreaming so that his hand full of supporters can talk of his undefined vision.

        Looks like vedda has also become a follower of this man’s dreaming.

        I hope Vedda looks sexy in a pair of shorts.! However I think his shape and personality will not go with casual shorts.

    • 7
      4

      Clown Prof Deepthi Silva aka Botox baby from UK, who always worked in favour of MEDAMULANA horu.

      https://www.youtube.com/watch?v=Y7mKU6JPARU

      I lately revealed, could you have had the chance to get married to a Rajapkashe, your pathological situation could have been much better.

      We really dont know how abusive you should be to twist things upside down this way ? Curse on UK state social funds, you miserable srilankans anchored your foot in UK, however, you seem to have learnt nothing actually. So pathetic.
      :
      Going back to the brutal tyrannical era of Mahinda Pariah, You were dead silent at the time, Medamulana HORA took plane loads of PS leaders once to UNO assembly remember ? That is how Rajaakshe pigs wasted public funds on broad day light and Led the country to a Mugabe’s land.

      I dont say that current presedent, RW should bring some of HORU to US in current visit, however, RW is in a prison-like cabinet, there he has to agree with POHOTTUWA ballige puthas whenever they bark loudly. RW is the most critical person in today’s context in the country.

      Rajapkaashes are proved to have killed own people not once several dozens of time. So why cant they kill RW for power gain intentions. This is what our stupid folk dont seem to understand.

      • 6
        2

        https://www.youtube.com/watch?v=4Wj0OODyiZ4

        President s speech before UNO assembly 2023
        :
        https://www.youtube.com/watch?v=0yttqpTMkvQ

        President GOTA s speech before the assembly 2021
        .
        Compare the two speeches and discuss it here… will you. That will help many to open eyes.

      • 5
        8

        Leela your language reflects your decency and objectiveness.

        Vedda and OC are privileged to keep your company.

        keep improving your language.

        What cultured gantalman come from your lineage !

  • 7
    6

    Eager-beavers seeking puclicity and getting their names in print. Laughable.

    • 6
      9

      Sonali
      You are being too harsh.
      Regardless of purpose, none of this will make a difference.
      Many advocates of an IMF rescue plan last year had retreated and become critical. To what avail?
      *
      We have to rescue ourselves from the IMF

      • 11
        1

        “We have to rescue ourselves from the IMF”

        A very good idea.
        And transfer pieces of land to Piece Loving neighbour China on a regular interval.

        • 1
          7

          There comes the middleman for the international kappamkarayo.

          • 6
            0

            Native , very funny. ” we have to rescue our retards from the IMF ‘. Hence every 4 years we go to IMF pleading for more loans.’. Says retired, desperate to see his name in Sonali’s list.

          • 6
            0

            “There comes the middleman for the international kappamkarayo.”

            Here comes the patriotic Maoist absurdly defending every word, action, …. thought, however following the usual tactic of “”if you are not with us, you are against us.” -reworked Bush Doctrine, or you are with enemy, a traitor, ….
            Finally he could only find such words middlemen, kappamkarayo, ….

            People have to grow up, …. well at this age,..

    • 6
      0

      By the way anyone noticed last name in the list , IN Dependent researcher ???

      • 1
        6

        It looks like you should soon see an ophthalmologist.

        • 7
          0

          Looks like you , retired mechanical thinking professor should add your name in Sonali’s eager bevers seeking publicity list.

    • 6
      2

      “Eager-beavers seeking puclicity and getting their names in print. Laughable.”

      puclicity – Laughable?

      • 2
        7

        Yes, as funny as your spelling.

  • 10
    0

    “Increasingly, in age of Artificial Intelligence (AI), Deep Fakes and data scraping to game numbers and narratives, international bankers and experts now recommend obtaining printed bank statements or hard copies.”

    It’s a bit rich ……. to borrow to the hilt at the prevailing highest interest rates …….. for white-elephant projects and steal most of it ……. and then hoodwink some gullible “professors” to request for debt-forgiveness.

    Why can’t good ol’ Ranil request all these hot shot professors to use their skills in AI …….. to steal the loot back from the Rajapakses and all the Rajapakse/Ranil cronies?

    Like the US …… there’s no need for Lanka to pay down it’s debt …… https://www.youtube.com/watch?v=9yU_bVZqqYk

    Who Ranil is “consulting” in NY ……… The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy – Stephanie Kelton ……. https://www.amazon.com/Deficit-Myth-Monetary-Peoples-Economy/dp/1541736184

  • 3
    7

    0h God. That the the IMF of all people can’t see this is unbelievable.

    Democracy, equal rights, emancipation, liberal government, freedoms, representative government,….all those grand humanity terms are for US and the West to indulge in over the sufferings of our lesser people. That’s the only way they can fulfill those concepts so their people can frolic in bliss.

  • 10
    0

    Foreign Minister Ali Sabry takes his son to UNGA and to attend 121 meetings with various VIPs
    AG of Sri Lanka flies by helicopter to Jaffna to stop Tamil memorial events
    Sri Lanka President take a large entourage, some not MPs or Ministers to UNGA
    There is no economic crisis in Sri Lanka. Sri Lankans have proved again that they are a unthinking nation as Tisaranee puts it

    • 8
      0

      Rajash

      “Sri Lanka President take a large entourage, some not MPs or Ministers to UNGA”

      It does not matter how many ministers, functionaries, their b***s carriers, brothers of ministers’ mistresses, …. join the prime minister, as long as Ranil’s entourage added value to his trip to Cuba and USA.

      Basil, Weerawansa, Weerasekera, Gamanpilla, Malcom Ranjit, …. a few of the hardcore saffron thugs should have accompanied Ranil’s entourage.

      • 5
        0

        Rajash and Native, Ali responded to public outcry, by saying ” I’m too busy, hence my son studying in the U.S not only accompanies me to the U.N, but writes my statements , interventions, and speeches. Great isn’t it. But what may be the role of retarded large entourage ??? can they speak and write in English.

  • 6
    0

    ………..Since then we have been alarmed to observe that our words have largely fallen on deaf ears……….lament The Debt Justice Collective.

    Maybe the IMF is working hand in glove with the Rajapakses and Pillayan.?
    After all they are the Govt:!
    Besides the Rajapakses have more funds than the next tranche of the IMF.

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