Saturday, 31 October 2020 09:25

Another report expressing disbelief about the country’s debt repayment ability. The situation is serious - Harsha

Samagi Jana Balawega MP Harsha de Silva says that the international community's confidence in Sri Lanka's debt repayment capacity is continuing to be eroded and that the government should face this real problem instead of lying.

"I have been making it clear for several weeks now that the government is facing a huge economic and financial crisis. They say there is no such problem, everything is moving forward very nicely.

By October 29, the secondary market price of Sri Lanka's $ 1 billion bond to be paid in June next year has dropped so much that if anyone wants to buy that international bond today, we get an annual interest rate of 46%. This is something that has never happened. The international bond, which matures in January, sells for 44% of the secondary market. We remember seeing Greece as a country with such high interest rates in the past. Some people invested in those Greek bonds. Our Sri Lanka did too. Then it was said that we can expect a huge benefit from this. What eventually happened was that hundreds of millions of dollars were completely wasted because the Greek government could not pay them.

Sri Lanka's confidence in repaying its loans has been completely shattered. Moody's downgraded Sri Lanka to two CAA rankings. Beyond that is the inability to pay. Then the Central Bank, the Treasury and the Minister were attacked to crush Moody's. Then Morgan Stanley re-submitted a report. Government officials and ministers discussed with them, that is, with the international investment banks, but as a result of those discussions their further confidence in Sri Lanka was shattered.

A few days ago, Moody's gave a 30-page long explanation as to why they had downgraded Sri Lanka so much from the rankings, and what reality they see in six months.

Then on the 28th Goldman Sachs, the world's leading investment bank, heard another report and said that international confidence in Sri Lanka, Iraq, Angola and Gabon was rapidly collapsing and that there was now a big problem with their ability to repay loans. This is the reality.

Decisions taken in the hope of winning the election dealt a heavy blow to the economy. Then we have no way to go international to get a loan now. We have $ 6-7 billion to pay for the next 12 months. Over the next five years, we will have about $ 25 billion in debt repayments. But our dollar income has plummeted. We have been pushed to the point where we cannot borrow from the international community. If so, how do we repay this debt? We have to face the problem.

Then they are right, China will give us the amount of money we need. He is of the opinion that India will provide us with money in the short term to pay off this debt. Let's just say it happened. Because none of us wants Sri Lanka to become indebted.

Because if one day a country does not pay its debts, a big black spot will appear. Then, according to economists, it usually takes 10 years to get rid of such a black spot. If that happens whoever comes to rule will have to face a big crisis after that.

Therefore, we are warning the government regarding a program that goes beyond politics. Suppose we borrow money from someone to pay off debts in June next year, and then what happens? The government should go beyond the issues of deceiving the people in the political arena and do what is necessary to save Sri Lanka from this crisis.

The government should have the backbone to speak the truth. Now said in other countries. India said economic growth slowed to 28% in the quarter. That is the truth. Truth be told, people also understand that this is the situation, we need to work harder, we need to save this country somehow.

Singapore says it is negative. Indonesia says it is negative. America says negative. What do we say? No but we are not ready to say those numbers.

There is a limit to lying. Beyond that, no one can make a lie come true, it turns out. Therefore, we appeal to the government to resolve this issue before the debt can be repaid and before it collapses. We ask you not to do this. Because even if they try to deceive the international investors in this way, they can see the truth, no matter how much they try to cover it up, they can see the truth from inside the veil. If we increase trillions of rupees in taxes, people will be strangled by this work, ”he said.

Dr. Harsha de Silva stated this addressing a media briefing held in Colombo on the 29th.


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