Written by Tharushan Fernando
19 Apr, 2016 | 8:05 pm
Deputy Minister Dr. Harsha de Silva says the government is hoping to secure funds from the International Monetary Fund, within a fortnight.
Deputy Minister of Foreign Affairs, Dr. Harsha de Silva noted that in today’s IMF negotiations IMF “doesn’t say do this and do that” And it is the governments who come up with plans that they believe can be implemented and then based on that mid-term plan they would seek support to implement it.
The deputy minister pointed out that IMF is a better bet than going to the commercial Market to borrow because IMF will give the level of confidence that is required.
“I’m sure the Hon Minister of Finance will finalise in Washington this week because by and large the PM has agreed upon pretty much everything there is to”said Deputy minister De Silva
A delegation including the Minister of Finance are currently in Washington to hold talks on this matter.
The 2016 Spring Meetings of the IMF and the World Bank Group which commenced on April 10 concluded in Washington yesterday.Prior to this meeting a staff team from the IMF led by Todd Schneider visited Colombo during March 31- April 11 to hold discussions regarding the request.
At the end of the visit, Schneider making a statement said the authorities’ proposed economic program aims to achieve high and sustained levels of inclusive economic growth, restore discipline to macroeconomic and financial policies, and rebuild fiscal and reserve buffers.
In this context, the mission welcomed the cabinet’s decision to reduce the 2016 fiscal deficit to 5.4 percent of GDP, and advised to move quickly on tax and expenditure policy decisions endorsed by the Cabinet.
Other near-term steps suggested by the IMF staff team include a clear strategy to define and address outstanding obligations of state enterprises, start broadening the tax base by reducing tax exemptions, and introduction of a new Inland Revenue Act.
The medium-term revenue effort is based on further reform of tax and expenditure policies, supported by modernizing revenue administration and public financial management.
Chairman of the SLFP Youth Front, Shantha Bandara noted that the International Monetary Fund and World Bank grant plenty of loans, but it is conditional, however there are many countries today that are willing to lend money at lower interest rates or provide assistance, without imposing such conditions.
Earlier this week the Minister of Finance, Ravi Karunanayake pointed out that discussions with the IMF have been going on from March 31.
He further explained that as for the conditions, there are no conditions that are imposed and it is just that financial discipline is what is expected and it is something the government has been embarking on and on the austerity measures, the discussions are still not at the end. He said that certainly, they will revisit certain things, but that would not be categorised as austerity measures.
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