By Rusiripala Tennakoon –

Rusiripala Tennakoon

During the ongoing debates, conversations and media shows, there is a strong focus on the IMF assistance we have obtained in the recent past. Some Political leaders and their spokesmen canvassing support for their candidacies, are repeatedly stating that the IMF agreements we have already concluded will be revisited by them if they come to power and revised according to their wishes.

In such a context it has become necessary for an independent review of these aspirations which unfortunately appear to gain ground and causing mind boggling confusions among the gullible public.

This is not the first occasion of our country getting IMF assistance. According to the known history last IMF assistance was the 17^th in line with several other facilities granted before between 1966 and 2016  extending as follows. Four arrangements from 1965-70;  Four arrangements between 1970-80 ; 2 from 1980 to 1990; and –  In six occasions between 1990- to 2016.

But there is a slight difference in the circumstances that led the country to seek IMF assistance this time amidst heavy controversies.

In an around December 2021, the whole country had plunged into a serious economic crisis of an unprecedented magnitude. The  usable gross official reserves level had fallen to US$ 1.565 Billions in October 2021. And this was sufficient only for one month of the country requirement to import of goods and services.

The current account balance had fallen to minus 3,285 USD. This was -3.7 as a percent of GDP. External Debts  both Public and private figured in the region of US$ 58.4.billions.

International Rating Rates had fallen below critical levels making  the country ineligible to go for any more foreign borrowings.

Total amount becoming due to be repaid during 2022  for debt servicing was nearing US$ 7000 million including interest payments.

The estimated requirement only to service the Debts in January 2022 was  approximately US$ 900 million.

This State of affairs was unquestionably accepted and acknowledged by everybody in the country including all MPs in parliament.

Many University Professors, Social Organizations including persons who have formerly held high posts in International Organizations without any dispute endorsed this economic state that prevailed then. A huge shortfall in the Export Income, Remittances from overseas employment, and the fall in income from Tourism  were the main cause for the depletion of Foreign Exchange reserves.

The sitting government however expressed a great reluctance to seek IMF assistance and the then Governor of the CBSL publicly announced his disagreement to go to IMF expressing his view that if we go to the IMF we will have to adopt several measures like reducing the Public Service, Sell country’s assets, and even cut the pension payments. He categorically stated that he is not in agreement to seek IMF assistance citing examples of other countries where social unrest and hardships have been caused as a result of implementing IMF programs. He justified going into the options of getting assistance from friendly countries on mutually agreed terms.

However the Economic Analysts  and Business circles held contravening views on this matter. They announced that any condition imposed by the IMF in association with their assistance packages would be directed to establish an orderly economic plan with greater financial discipline so that the funds provided by them would be secured while the country would achieve a high level of financial discipline which in turn would help the country to improve the economy. They also opined that in such a situation when the IMF programs are implemented the country ratings will come up satisfactorily and the Debtors too will be amenable to come to terms which will be more tolerable. They pointed out further that Sri Lanka categorized as a middle Income country would be able to obtain bipartite facilities with improved Rating rates following the IMF assistance.

It is interesting to recall that research bodies too strongly recommended seeking of IMF assistance. They even strongly lobbied government circles to influence a declaration of bankruptcy to stop further drain of foreign exchange out of the country by stopping debt settlement.

The most astonishing part of the episode is those who are vociferously campaigning to revisit and  revise the IMF agreement in no uncertain terms argued both in the parliament as well as publicly against the refusal of the then government to seek IMF assistance.

Opposition MPs like Harsha de Silva, Eran Wickremeratne and Champika Ranawaka who are highly vociferous today on this subject were key spokesmen then to amplify the benefits of going to IMF arguing in the Parliament (as reported in the Hansard) as well as in public debates.

All the fears expressed by the government quarters against going to IMF were crystalized on the ground before long. The President of the country decided to quit making the entire cabinet and the Prime Minister to resign. Parliament was given the choice of electing a President from among the MPs to hold office during the unexpired period of the term of office of the Vacating president in terms of 40(1) (a) of the Constitution.

Now all this happened at a time when the country was feeling the impact of the Crashed economy fully at all levels. The election of the President was done providing the opportunity for any MP aspiring to take over to contest. Election of MP Ranil Wickremesinghe was under these circumstances.

The newly appointed President had to secure Law and Order and take measures to safeguard the Democracy hitherto maintained by Sri Lanka as an Independent Nation from being ravaged by undemocratic means as attempted under various coups launched in it’s history on a couple of occasions before under attempted clandestine operations and unsuccessful devastative insurgencies.

While pressing for Revision of IMF agreement they keep on promising many things that the country could not afford to provide even at times of abundance.   

This shows the total darkness they are in and the darkness towards which they are attempting to drive the voters.

It would be highly appropriate to examine the present state of the country before we ponder over the fanciful pictures presented by those interested in grabbing power first  to necessarily  thereafter start thinking how they are going to deliver what they promised. Let us take a  look at the IMF  Article iv survey report already published about the country performance under their latest assistance quoted  below;

Reform efforts are bearing fruit with the economy starting to recover, inflation remaining low, revenue collection improving, and reserves continuing to accumulate. Performance under the program, the design of which benefitted from the 2021 Article IV recommendations, has been strong. Nevertheless, the economy is still vulnerable and the path to debt sustainability remains knife-edge. Sri Lanka faces considerable uncertainties associated with the upcoming presidential elections and ongoing debt restructuring. Sustaining the reform momentum is critical to safeguarding the hard-earned gains and ensuring Sri Lanka can emerge from one of its most severe economic crises.

Time is ripe for us to look at things with open eyes and proceed accordingly. It will not be difficult for any body to understand the need to look at things objectively. There is no disputing of the fact that we all need a change and a complete change at that. The most recent change we were compelled to effect has to be sustained for sometime for its effects to cause the expected impacts. A change according to some is professed as a change of the heads and faces. What we need is a strong policy change and an adaptation to keep momentum with the rest of the humanity in the World. For that there is a strong need to create the foundation both legislatively and socially. WE have to be alert to the setting of goals which provide Clarity ,motivation, measurable targets, accountability and a direction.

AS we are moving in that direction let us think carefully before we fall back into the same pit from which we have managed to emerge, but still a long way ahead to   clear in order to be at a safe distance away from it.

In the serious expectations we are engrossed in to reach a state served by a set of highly motivated Public service contributing fully to an aggressive forward movement in place of a lethargic , outdated, under-performing and  highly inefficient Public Service regime. In the current situation it is pathetic to note that  even some senior officials are contemplating a serious change forgetting  where the country is now.

Let us be more vigilant about the present while looking for  necessary Changes.

Reminds us of the poetic version about women!

“are a necessary evil in order for our society to get as far as it could