Opposition Leader Sajith Premadasa stated that although the President claims to handle the pressure transparently and balanced, the government has adopted a dual policy.
He pointed out that one policy has been implemented for the holders of international sovereign bonds and a different policy for the people of this country.
He noted that countries like Ghana, Jamaica, and Ecuador have entered into beneficial agreements, but the President and government of our country have not achieved such outcomes.
Premadasa made these remarks while responding to the President’s speech in Parliament today. He noted that the President made several statements regarding debt restructuring and related agreements. At one point, it was claimed that Sri Lanka carried out debt restructuring very quickly compared to other countries, but Premadasa asserted this is false. He mentioned that countries like Ghana, Argentina, Ecuador, Mongolia, Belize, and Barbados implemented debt restructuring agreements within a limited time before our country.
The opposition leader provided specific examples: Ghana started debt restructuring in January 2023 and reached agreements with bondholders by June 2024, reducing debt and interest by 37%. Argentina began debt restructuring talks in December 2019 and managed to reduce its debt by 36%. Ecuador achieved a 42.2% debt reduction under its program. Despite expectations, statistics and data related to our country’s debt restructuring have not been submitted to Parliament yet.
Premadasa highlighted that a sudden meeting of party leaders was called in Parliament, and a debate was planned but then canceled due to not reaching a complete agreement. He questioned if our country has reached a level of debt reduction similar to Ghana, Ecuador, and other countries.
Premadasa criticized the government for failing to extend the debt repayment period as announced by the President. He noted that while the President claimed to have signed an agreement to extend the repayment period until 2028, the government could not secure an extension until 2033 as agreed by the International Monetary Fund in March 2023. He attributed this failure to the government’s weak negotiations.
He also pointed out that although an agreement was reached regarding $3.9 billion of loans from Exim Bank of China, there is no mention of the Chinese government loan of $13.8 million and the China Development Bank loan of $538 million. Premadasa stated that it is inappropriate to claim success in the debt restructuring process without disclosing all relevant information.
Premadasa accused the government of surrendering to international sovereign bondholders during the foreign debt restructuring process. He pointed out that although the government initially claimed there would be no domestic debt restructuring in 2022, they restructured domestic debt when threatened by international bondholders. He argued that such measures only protected the super-rich while adversely affecting the retirement funds of working people.
He mentioned that the group representing the sovereign bondholders would not have issued critical statements if negotiations with international bondholders had been conducted effectively. On January 31, 2024, a statement was issued criticizing the government’s lack of interest.
Premadasa noted that Ghana’s finance minister directly negotiated with international sovereign bondholders and secured a 37% debt reduction for the country. He criticized the President, who has made many foreign trips, for failing to achieve similar results. He highlighted that Argentina’s finance minister successfully negotiated with international bondholders in 2023 and gained their trust, resulting in debt reduction. Premadasa argued that the President, who travels abroad as the Minister of Finance, should have held similar discussions but failed to secure the best possible agreement.
Premadasa pointed out that the technical assessment reports made by the IMF have not been tabled in Parliament. He noted that the President, who previously demanded Finance Minister Basil Rajapaksa to present these reports, is now preventing their submission to Parliament. He called for these reports to be tabled.
Premadasa criticized the President’s notion of financial discipline, referencing the Poonakary project. He stated that a 700-megawatt power plant was promised, but the license was ultimately given to a company that distributes solar panels in another country, allowing the license to be sold. He also mentioned a significant financial fraud in the 500 MW wind power plant project. Premadasa questioned whether this is the President’s idea of financial discipline and asserted that the government’s central nervous system is not functioning properly. (OL Media)