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Govt says no IMF written agreement, only understanding

09 Sep 2022

  • House Leader responds to AKD and Sajith
  • Duo recall Ranil quizzing Basil for IMF agreement
  •  G.L. says P’ment needs to know as final arbiters of public finance
BY Buwanajee Coralage   Leader of the House and Minister of Education Dr. Susil Premajayantha said yesterday (8) that no written agreement has been reached between the International Monetary Fund (IMF) officials and the Government of Sri Lanka (GoSL), and that what exists is only an understanding between the global lender and GoSL. “No agreement has been signed between the Government officials and the IMF, but a consensus and understanding has been reached,” said Dr. Premajayantha during the Parliamentary session held yesterday.  He stated this in response to separate questions by Janatha Vimukthi Peramuna-led National People’s Power Leader MP Anura Kumara Dissanayake and Opposition and Samagi Jana Balawegaya (SJB) Leader Sajith Premadasa on why the IMF agreement had not been tabled in Parliament. Speaking further, Dr. Premajayantha stated that such an agreement would require the Government to bring about certain changes to strengthen the economy.  “Everyone is aware of the fact that Sri Lanka is currently facing an economic crisis and that it has been predicted that economic growth for this year would be around minus eight (-8) with inflation exceeding 60%. The budget deficit is at minus 10 (-10). Government revenue has decreased by 8% relative to gross domestic product (GDP). We can no longer remain in this state, and the only solution to emerge from this would be to reach an agreement with the IMF, which has been suggested in this Parliament on numerous occasions. The discussions have begun and the only understanding until now has been to enter into an extended fund facility (EFF) for four years,” he said. The Leader of the House added that certain fundamental requirements for an economic recovery have been laid out by the IMF, of which many are public knowledge.  “With an agreement in this regard, we would need to increase our current account balance from minus-four (-4) to plus-2.3 with the Government revenue being increased to 15% of the GNP by 2026. The Budget also mentioned plans to restructure Government businesses operating at a loss. The Government sector should also be further strengthened, and it is planned to appoint three new standing committees in the Parliament to look into those matters. New amendments have been drafted by the Justice Ministry to prevent bribery and corruption. So this understanding has been reached focusing on these primary factors,” he stated. Defending the Government’s stance, he added that no agreement with the IMF would be revealed to the Parliament or the Cabinet of Ministers unless it is approved by the Executive Board of the IMF in prior, and that after it has been approved, the agreement will be presented before the Cabinet and Parliament, but that this will require more time in the current context. He reiterated that up to date, there is only an understanding and that no agreement has yet been signed. The response was provided by Premajayantha to a question posed by Dissanayake as to the reasons for not presenting the particulars of the agreement before the Parliament and the Cabinet. “On 1 September, the bilateral talks between the IMF and officials from the Sri Lankan Government on the $ 2.9 billion loan to be provided were concluded with the signing of a staff-level agreement, which was announced by both the IMF and the Government. In the face of the financial crisis currently crippling the economy of the country, many believe that only an agreement with the IMF will be the escape from this. This primary agreement with the IMF is tightly bound with the lives of the Sri Lankan people. The people have a right to know about the conditions of this agreement. This is not merely an agreement between two individuals or two organisations. This is closely interwoven with the people and their livelihoods. Therefore, this Parliament also has a right to know about these agreements,” Dissanayake emphasised. Moreover, he stated: “The former President Gotabaya Rajapaksa called an all-party conference to discuss the economy, which then-United National Party MP and incumbent President Ranil Wickremesinghe also joined as a member of the Opposition. During this, Wickremesinghe repeatedly asked then-Minister of Finance Basil Rajapaksa to disclose the particulars of the pending agreement with the IMF. According to media reports, Basil Rajapaksa had, in a confrontational manner, declared the absence of such. Wickremesinghe, as a member from the Opposition at the all-party conference, asked Basil Rajapaksa to provide information to table the agreement, but now, as the President and Minister of Finance, Economic Stabilisation, and National Policies, he is not reciprocating the same practice.” Addressing Parliament on the same matter, Sri Lanka Podujana Peramuna Chairman MP Prof. G.L. Peiris stated: “Premajayantha stated that the agreement has not been signed yet, but that an understanding has been reached and also that the Government needs to take some action before getting the approval of the Executive Board of the IMF. When the Budget of 2023 is presented in November 2022, some facts of this agreement would have to be included in order to initiate action on some of the matters included. This will directly affect the day to day lives of the people of our country. Therefore, my suggestion is that under Article 148 of the Constitution, Parliament needs to be aware of these facts in order to act accordingly. As Parliament is responsible for the administration of public finances, that responsibility cannot be carried out if fundamental information relating to the agreement is being kept from the Government. As Dissanayake disclosed, the country is in this state due to the authorities keeping information from the public and sometimes even the Government.” Echoing Anura Kumara Dissanayake’s sentiments, Opposition and Samagi Jana Balawegaya Leader Sajith Premadasa, also speaking in Parliament, called on Wickremesinghe to table both the agreement and its conditions to the Cabinet and Parliament, just as Wickremesinghe had requested when the latter was in the Opposition.


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