{"id":239219,"date":"2024-10-13T18:22:26","date_gmt":"2024-10-13T12:52:26","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=239219"},"modified":"2024-10-25T02:48:17","modified_gmt":"2024-10-24T21:18:17","slug":"akd-npp-imf-response-to-critics","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/akd-npp-imf-response-to-critics\/","title":{"rendered":"AKD\/NPP & IMF: Response To Critics\u00a0"},"content":{"rendered":"

By Asoka S. Seneviratne<\/a> –<\/strong><\/span><\/p>\n

\"\"

Prof. Asoka.S. Seneviratne<\/p><\/div>\n

Some critics are against the government headed by President Anura Kumara Dissanayake<\/a><\/span> (AKD). AKD’s opposition to the IMF<\/a><\/span> engagement in the economy or the IMF bailout program as a member of parliament is one such criticism. During the presidential election campaign, one of the pledges was that the NPP wanted to change the Debt Sustainability Analysis (DSA) or introduce an alternative DSA that would not burden people. Now, NPP\/AKD is in power, but they continue to work with the IMF, which contradicts what NPP\/AKD stated before the presidential election. Furthermore, it says that NPP\/AKD follows former president Ranil Wicremesinge\u2019s (RW) policies and programs so that there is no change in governance pattern between AKD and RW or the current government is just a replacement for the previous government headed by RW.\u00a0 <\/span>The purpose of this article is to indicate that the criticisms mentioned above do not have any value or credibility.<\/p>\n

What AKD stated in the parliament Regarding the IMF program<\/span><\/strong><\/p>\n

Following the economy’s collapse, the government of Sri Lanka sought assistance from the IMF, which led to criticism fr<\/b>om the opposing parties. Usually, the opposition opposes any move or suggestion from the government. However, the above does not apply to NPP\/AKD at all. Before the presidential election, AKD was a member of the parliament, and, as a habit, he spoke sense; hence, his engagement in the parliament was very systematic, credible, accountable, and productive. Regarding the IMF’s involvement in the economy or the IMF bail-out program, it is accepted the fact that the reforms and adjustment measures proposed by the IMF are not\u00a0 <\/span>loved by the people or pleasing at all, this time due to the worst economic crisis Sri Lanka has faced since independence, the price that the people and country were expected pay unbearable. This was the utmost concern of the opposing parties, including the NPP in the parliament. Yes, it was true that the NPP leader, Anuran Kumara Dissanayake, raised his voice against the involvement in the economy when the bailout program of the IMF was introduced in the parliament to debate. However, it was not for popularity or personal benefit or gain.\u00a0 <\/span>It was purely knowing the hardship that the people had to face; it was not for a short period but for a long time. Unprecedented VAT increase, high-income tax burden, and excessive gas and fuel price increases vindicated why AKD\/NPP opposed the IMF’s involvement in the economy. Indeed, not only NPP\/AKD but also some politicians in the government and, on some occasions and forums, the then-president RW expressed concerns about the sufferings of the people along with the impact of the IMF policies on the people. Generally, except for a few who can afford all luxuries or maybe a maximum of 5% of the population, others expressed their utter dissatisfaction and disappointment with the prevailing harsh economic conditions of the country due to the IMF bailout program.<\/p>\n

When AKD raised his voice, the government politicians did not talk against him or say that AKD was wrong. They kept silent because they knew that AKD was right. Indeed, given the facts, figures, and reasons, some ministers, especially in the finance portfolio, tried to convince the parliament that IMF engagement in the economy was unavoidable and that policy measures would generate the expected outcome or stability in the economy after some time. Given the above, AKD accepted the stability that would be reached after a long time because he knew the purpose of the policy and adjustment measures or program of the IMF. In short, NPP\/AKD did not oppose merely being in the opposition but acted responsibly and accountable. AKD opposed it as he was required to do so, and he disagreed because there was a great need to do so. Given the above, AKD fulfilled his responsibilities in an accountable, and credible manner in parliament, as the people expected him to do so. The pertinent question is that AKD opposed the bailout program, but a single member of the government did not talk against the impact of the IMF bailout program on the people and their country. When they lost the presidential election like a Tsunami, they reminded the public that AKD opposed the IMF bailout program to attack AKD, who won the presidential election, which is true. As I will explain later, one of the reasons that RW faced a humiliating defeat in the presidential election was the IMF bail-out program, which AKD opposed. Given the above, those criticizers AKD must assess and evaluate their role with RW, and the IMF ba<\/i>ilout program was introduced to the parliament. This reminds me that when Gotabaya wanted to proceed with the controversial carbonic fertilizer program,\u00a0<\/span>everybody agreed by saying \u201dYes Sir<\/b>\u201d but later criticized Gotabaya when he was out of power. There is no doubt a similar response from the members of parliament who supported RW. In short, the above will not take place soon because RW is still in sight. Still, silently, they may be cursing RW because they, too, lost their future by not being able to be selected by the people again to the parliament being caught by the political Tsunami, the naked reality of the IMF bailout program for them.<\/p>\n

Alternative DSA by NPP\/AKD<\/span><\/strong><\/p>\n

The NPP’s election manifesto pledged to carry out an alternative DSA to provide more relief to the people and the country. This is also true. AKD opposed it in the parliament because the IMF bailout program generally hurts people and the country in numerous ways because the reforms and adjustments included in the program are too harsh and that people cannot afford. Given the above,\u00a0 <\/span>NPP\/AKD was massively convinced that the IMF program (i) resulted in a drastic reduction of the real income of the people, (ii) unemployment and price levels were rising, (iii) nearly one-third of the population under the poverty line, malnourishment among children was growing, (iv) more than 100,000 small and medium scale businesses were closed down, (v) no money income of the people increased at all along the with price increases, (v) regarding more than US$ 100 debt, per capita debt was about US$4700,\u00a0 <\/span>(vi) due to domestic debt restructuring, EPF members were severely affected\u00a0 <\/span>(vii) crimes in the country were growing, so the social unrest (vii) many people particularly young men and women wanted to lead the country and many more all negative impacts were rolling over unbaiting, which was the harsh reality on the ground that compelled for NPP\/AKD to focus on an alternative DSA which was in the right direction. As a grassroots-oriented political movement, the concern and commitment of the NPP cannot be argued or undermined by anyone. As I can remember, by knowing and understanding the harsh realities on the ground, as mentioned above, none in the RW\u2019s government wanted to think and focus on an alternative DSA; they just waited for 2048 prosperous Sri Lanka as RW blindly advocated for.<\/p>\n

It is pertinent to mention that SJB wanted to renegotiate with the IMF about the IMF bail-out program because it, too, felt that people and the country were suffering immensely, very similar to NPP. Given the above, alternative DSA by NPP and re-negation with the IMF were based on the same reality: people faced mounting hardships and difficulties. While RW wanted to avoid revisiting the IMF bail-out program, badly lost the presidential election, SJB, who promised to renegotiate the IMF bailout program, just emerged next to AKD by losing 1.2 votes compared to the 2019 presidential election results. The stand by NPP\/AKD for alternative DSA was so bold because by understanding the ground realities, NPP\/AKD was convinced that only a new DSA would meet the expectations of the people and the country, which is realistic gave it utmost commitment to uplift the living standards of the people or \u201cA Thriving National, A Beautiful Life\u201d.<\/p>\n

AKD follows the same program as RW<\/span><\/strong><\/p>\n

This is the third criticism against NPP\/AKD, which is untrue. RW signed the agreement with the IMF on behalf of the government of Sri Lanka or its people. As the head of the state, it was not a private or personal engagement by RW. RW would be in power or not, but the government of Sri Lanka is fully committed to adhering to the program, and this is what NPP\/AKD is implementing now. It must be mentioned that the way RW behaved and responded was that he tried to convince the people and the country that he was the only one who could talk and negotiate with the IMF, which is untrue. AKD and his team are performing well and receiving the utmost support and encouragement within the country, including the opposition, particularly from some parliamentarians who were with RW and internationally. However, all must understand the harsh reality on the ground that RW implemented the IMF program with unabated corruption, misuse of resources supporting and looking after his closed associates, and along with many more anti-governance commitments as being widely surfacing now. In contrast, president AKD is implementing the IMF bailout program based purely on sound governance principles; for that, RW never comes close to AKD. This means President AKD is well able to maximize the benefit of the IMF bailout program for each dollar borrowed by the government of Sri Lanka that no one can deny; the harsh reality of President AKD is proceeding with the IMF program, which is vital.<\/p>\n

The alternative DSA sounds excellent, but it must also be cautious now, given the situation and circumstances. Given this, the NPP\/AKD indicated their agreement in principle to carry out the IMF program while indicating that they are committed to providing relief to the people with VAT and income tax, a balancing act of President AKD. In short, the NPP manifesto pledged subsidies, VAT and income tax reductions, and salary increases, which also sound great. On the other hand, the economy is still fragile, so it needs due attention and further stabilization. Given the above, any sight of derailment of the IMF program will no doubt pave the way for another collapse or crisis in the economy, forcing the government of Sri Lanka to seek IMF assistance 18 times, which must be avoided, as clearly stated by the president \u201cThe change we seek involves many steps that will take time. However, achieving stability and confidence in the current economy is crucial\u201d.<\/b>\u00a0 <\/span><\/p>\n

Indeed, rescuing the economy by AKD from the Somali pirates is a massive achievement for the people and the country; if not, the people and the government will no doubt have to face incomprehensible hardship and difficulties with no hope of prosperity in sight, even in 2048. The current situation is such that people are calm, quiet, and happy with the president’s governance, so they strongly believe that the president will not harm them or the country. Indeed, the government is fully committed to working with the IMF and creditors, giving the right signals to stability in the financial sector, while the Fitch Ratings assessment is positive for the economy which is vitally important. Entrepreneurs, the business community, professional groups, civil society organizations, and foreign investors are confident and interested in the economy.\u00a0 <\/span>Having the same governor of the Central Bank and Finance Secretary has positively impacted the economy in many ways. At the same time, the president must follow the borrowing limits while debt repayment will commence after 2027, which is also a considerable challenge among many. Given all the above, constant and consistent assurance given by the president on many occasions and forums to be with the IMF program is hugely crucial for further enhancing her stability in the economy for\u00a0 <\/span>\u201cA Thriving National, A Beautiful Life\u201d.<\/p>\n

The way forward<\/span><\/strong><\/p>\n

Given the still fragile nature of the economy and the expectations of the people and the country, the immense task of the president is like \u201cEating curd with a shaving knife<\/b>.\u201d However, there is no doubt that President AKD will do all that the people and the country expect. For this, NPP should have a strong parliament, and it is up to the voters to fulfill the above on 14 November 2024. At the same time, having strong opposition in the parliament will be helpful in many ways, according to the parliamentary democracy. The above all will be met after 14 November 2024.<\/p>\n

Conclusion<\/span><\/strong><\/p>\n

AKD was in the parliament and opposed the IMF bailout program when it was introduced to the debate, which is true. But the reasons for such opposition were credible, accountable and accepted. The criticism that the NPP manifesto pledged for an alternative DSA is also correct. However, NPP had solid reasons and facts for such a pledge. AKD acts similarly to RW, which is not true because of the agreement signed with the IMF between the government of Sri Lanka and the IMF. People and the country are happy with President AKD and how he is systematically and cautiously handling the economy: “Eating curd with a shaving knife<\/b>\u201d. Given all the above, AKD is fulfilling its responsibilities as a committed head of state in a credible and accountable manner for\u00a0 <\/span>\u201cA Thriving National, A Beautiful Life\u201d<\/b>. The president’s repeated assurance to proceed with the IMF program is crucial for the still fragile economy. The NPP must have a solid parliament after 14 November 2024 to fulfill the people’s and the country’s expectations.<\/p>\n

*The writer, among many, worked as the Special Advisor to the Office of the President of Namibia and was a Senior Consultant with UNDP for 16 years. He worked as a Senior Economist with the Central Bank of Sri Lanka (1972-1993) before he migrated to New Zealand. The author can be contacted at <\/i><\/b>asoka.seneviratne@gmail.com<\/i><\/b><\/span><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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