SJB does not agree with transparency policy of IMF on Policy intention – Eran

Glad to see those who caused crisis now proposing solutions

Mr. Eran Wickramaratne M.P. said that those who caused the economic crisis in this country are now proposing solutions and the group that did not allow them to resolve issues has now agreed to do them and is seem willing to push the country in one direction.

Even when the opposition was in power, it had EFF transactions with the International Monetary Fund, but there are problems with this government’s business. First the MP emphasized that SJB could not agree with the organization’s transparency policy while speaking in the Parliamentary debate Thursday afternoon on the report submitted by President on the agreement reached with the IMF.

Further speaking he said that when looking at the conditions followed by the International Monetary Fund in lending to Sri Lanka, questions arise not only about the integrity of the Sri Lankan government but also about the IMF on its transparence policy.

The first page of the report, which provides extended financial credit facilities to Sri Lanka, states that “The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents” “I can understand as a former banker, that nobody should reveal market information. But I do not agree with the clause which says they must not disclose the authorities’ policy intention. I think the IMF needs to look at its own Transparency policy. Some of these global institutions talks to countries like Sri Lanka about transparency why not your policy intention what was the secrecy about your policy intention” retorted back Eran Wickramaratne

He further emphasized that the SJB does not agree with the non-transparent method of not disclosing the policies that should be followed with IMF. There should be a will and place for policy disclosure.

We see this only when the President tabled the report in Parliament. same people who created economic and political instability in the country are coming forward to solve this problem. The MP quoting clauses from the IMF report to cite the reasons as to how country was devastated after 2019 showed that  Despite progress made under the 2016-19 EFF program, Sri Lanka’s vulnerabilities were aggravated by substantial shocks during the period, including the 2017 drought, the 2018 political crisis, and the 2019 terrorist attacks. income tax and value-added tax (VAT) were drastically cut in late 2019, with estimated revenue losses exceeding 2 percent of GDP. The automatic fuel pricing mechanism was discontinued, and legislative reforms to enhance central bank autonomy and fiscal rules were suspended. The EFF-supported arrangement expired in June 2020 after the 6th program review was completed in November 2019” The legislative enactment to make the CBSL independent from the government had been drafted in 2019 but three years after this government is now talking of bringing it back. Usable gross international Reserves declined from $ 7.6 billion at the end of 2019 to 1.6 billion dollars at the end of 2021. 

This is the group that caused the economic crisis. This group in the government should be responsible for it. Now the issue it to liberate the country from these crises. Inflation is the biggest issue in tackling the economic isues. Inflation was almost exceeding 100 percent previously and now it has come down to around 50 percent. The primary reason that caused these problem was printing of money without proper economic management. At that time it was pronounced from the government side there was no need to go to IMF as there can solve this problem by printing money in the country. When the SJB elucidated to go to IMF, the authorities in the Central bank rejected the idea in toto at that time but they ended with going for IMF loan.

Mr. Eran Wickramaratne urged the government to take precautionary measure when they step into the second step of discussion on loan. In discussions with private bondholders and creditors India, China and Japan on debt restructuring, he asked to take the lead in obtaining in a fair haircut on debt or interest and not to agree to domestic debt restructuring as they have already paid the prize for it.

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