It is unfair that while the ruling NPP government still has time till the 12th of the month to negotiate the principles listed in the agreement for debt servicing in the next six months, it acts as if the deal is through with, opposition Member of Parliament (MP) Harsha de Silva said, speaking to The Daily Morning Business yesterday (8).
“The vote on account was taken with the impression that there had been almost full consensus to the debt servicing agreement among the ISB bondholders, and that it was through with, while they are yet to sign off on it on the 12th,” de Silva said.
On 6 December, the parliament unanimously placed a vote on account for a borrowing limit of Rs. 4,000 billion, in the event that the restructuring of international sovereign bonds are delayed beyond 31 December.
Addressing parliament, Finance Deputy Minister Anil Jayantha said that while Sri Lanka expects to wrap a debt exchange by 31 December, any technical delay will be resolved with the vote on account that provides for new bonds to be issued in 2025.
Prior to its election win in September, the ruling NPP party had campaigned primarily on the commitment to negotiate more favourable conditions for the public, which included presenting proposals on efficient tax administration and government expenditure management to renegotiate the revenue-based fiscal consolidation proposals of the International Monetary Fund (IMF).
“They are continuing on with the same conditions agreed to by the previous Wickremesinghe government, while having campaigned on the promise of change. While working with the IMF is crucial, it is necessary that the conditions are negotiated,” de Silva said.
The MP said that the party addressed a separate audience at the Ceylon Chamber of Commerce after the elections, and said that the basis of their discussion with the IMF would be NPP’s debt sustainability analysis (DSA).
The NPP policy document for its election campaign mentions the preparation of a DSA with the aim to maintain debt sustainability, in the “pursuit of debt restructuring engagements.”
“From what is presented there are no changes to the conditions of the principles, and what we can expect as “change” is going to be in the budget prepared in 2025, which we’re wary would make a sizable difference, in comparison to negotiating the debt servicing policies and terms,” he added.