Government to obtain loans to cover debt servicing and budget

Government to obtain loans to cover debt servicing and budget

Written by Staff Writer

10 Jan, 2019 | 9:20 pm

COLOMBO (News 1st) – A debate ensued following a special statement made by Prime Minister Ranil Wickremesinghe on the economic status and debt repayment of the country.

The Prime Minister speaking in Parliament said that the total debt repayment for the year 2019, including the interest, has been calculated to USD 5900. He continued to say that this debt is not what they obtained adding that on the 14th of January they have to service a debt of USD 2600 million which is also the highest amount in the history of Sri Lanka.

The Prime Minister said that the economy which was gradually stabilizing was greatly affected through the 51 days of political instability in the country. The PM continued to say that the reserve bank of India has agreed to provide USD 400 million to the CBSL adding that they hope to get another USD 500 mn through China’s panda bonds and Japan’s Samurai bonds. Another USD 1 billion is to be taken from the IMF adding that despite all these difficulties that a people-oriented budget will be presented to the country.

In response to this UPFA MP Bandula Gunawardene requested for a debate to discuss the country’s economy, taking into consideration the rate at which the rupee has depreciated.

The premier then said that during the first half of the year that currencies of all countries had depreciated against the US dollar adding that by November currencies of all countries had increased except for Sri Lanka. He accused the opposition of having caused all the political turmoil within the 51 days which led into this situation.

Meanwhile, UPFA MP Wimal Weerawansa questioned the Prime Minister whether or not they had agreed to sell the China Bay port, Mattala airport, Kankasanthurei Port and the Colombo East Terminal in return for the USD 400 million granted by India.

The Prime Minister only replied that the SWAP agreement comes under the SAARC currency SWAP and that nothing should be given on lease in exchange.

THE BIG PICTURE

The Prime Minister announced recently that the government will be entering into a USD 400 Million SWAP Agreement with the Indian Government, in order to repay the international debt of the country.

This is approximately Rs. 72 Billion.

While the Sri Lankan economy has been forced to a corner and made dependent on the charity of foreign governments to stay afloat and repay her loans, it is interesting to put this Rs. 72 Billion SWAP into context.

  • The total Loss from the Sri Lankan Airlines Scandal alone over the past three years amounts to over Rs. 57 Billion. That’s two-thirds of the funds required.
  • The Central Highway Loan, which was borrowed at Commercial Rates, works out to a mammoth Rs. 450 Billion which is over 6 times the value of the loan repayment.

All these examples are not even taking into consideration what is perhaps Sri Lanka’s worst financial crime;

  • The Bond Scam, with its immediate loss of Rs. 11 Billion and the almost incalculable long-term loss running into tens of Billions of Rupees.

Despite the media highlighting these incidents and massive public outcry against corruption, financial mismanagement, incompetence and rampant corruption have resulted in a situation where Sri Lanka is forced to rely on foreign nations to repay her loans.

The Rs. 72 Billion question is, where would Sri Lanka’s economy be today if it was managed by those whose interest was the progress of the nation and not self-interest and political survival.


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