Teams from US Treasury and India will arrive here: PM

Prime Minister Ranil Wickremesinghe today said that officials from the US Department of Treasury and India will visit Sri Lanka to discuss the economic situation in the country. 

Making a special statement in Parliament, the Prime Minister said that a top level delegation from India is to arrive here tomorrow.

“Next Monday, a team of representatives from the U.S. Department of the Treasury will also arrive in Sri Lanka,” he said.

Full Statement:

Every two weeks since taking the reins of this government, I have taken steps to inform you of the real situation faced by the country and the measures we are taking to address it. Some have ridiculed this. They criticise me while asking “Did he accept the Premiership to merely tell us the hardships faced by the country?”. However, many others are also grateful that we are telling them the whole truth and they have come forward to present various proposals that would perhaps help us overcome these issues. 

No matter which of these two groups you belong to, I call on you to come together as one country and join in the nation's rebuilding process to see it through these dark times. Let us all embark on this journey together. Only by doing this will we be able to ensure the country’s recovery. 

We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has faced a complete collapse. That is the most serious issue before us today. These issues can only be resolved through the reviving of the Sri Lankan economy. In order to do this, we must first resolve the foreign reserves crisis faced by us. 

It is no easy task to revive a country with a completely collapsed economy, especially one that is dangerously low on foreign reserves. If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall into the very bottom. However, we must come out of this situation. If not, we will be unable to seek solutions to any other issue in the country. 

(Yesterday Minister Kanchana Wijesekara presented detailed information on the country’s fuel situation). Currently, the Ceylon Petroleum Corporation is USD 700 million in debt. As a result, no country or organisation in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash. 

We have taken loans amounting to USD 4 billion under the Indian credit line. We have requested more loan assistance from our Indian counterparts. But even India will not be able to continuously support us in this manner. Even their assistance has its limits. On the other hand, we too must have a plan to repay these loans. These are not charitable donations. 

So what is the way out of this dire situation?

The only safe option before us now is to hold discussions with the International Monetary Fund. In fact, this is our only option. We must take this path. Our aim is to hold discussions with the IMF and arrive at an agreement to obtain an additional credit facility. As the next step, we hope to form a foundation to stabilise the economy and implement an immediate programme to increase our export revenue.

Following discussions with the Central Bank, Treasury, relevant government officials, professionals and experts this plan has already been formulated. 

I urge you to inform us of a better solution if available. In fact, if you are in possession of a practical and more favourable plan for the country we call on you to put it forward. 

If political parties wish we can take up any solutions presented by them in parliament. We are prepared to provide them with the necessary space and opportunity. 

Let me now in detail present to you the programme we have currently put into action. 

The majority of the cabinet was appointed by May 20. We began our programme from then onwards. First, we decided to revert back to the tax system we had in place in 2019. We then agreed to ensure a primary surplus in the National budget by 2025. 

Next, an IMF team on revenue and taxation visited Sri Lanka for discussions. They presented us with the relevant report. On Monday, the main IMF team arrived in Sri Lanka and the talks with the group will continue for the next several days. 

We have concluded the initial discussions and we have exchanged ideas on various sectors such as public finance, finance, debt sustainability, stability of the banking sector and the social security network. 

Representatives of the financial and legal advisory firms Lazard and Clifford Chance are now in Sri Lanka to assist us in our debt restructuring efforts. The framework for debt repayment restructuring is being formulated. 

Meanwhile, next Monday, a team of representatives from the U.S. Department of the Treasury will also arrive in Sri Lanka.

We ensured that we created the background necessary for the immediate arrival of these three teams in Sri Lanka. We will conduct lengthy discussions with them. Their presence in the country will now allow us to hold meetings together with all three teams. It will only further assist us in expediting our programme. 

We intend to enter into an official level agreement with the IMF by the end of July. 

Here the most important is our debt restructuring plan. We will together with the teams from Lazard and Clifford Chance do our utmost to complete the framework for this plan before the end of July. 

Considering this planned framework and the official level agreement it is expected that the Executive Board of the IMF will then arrive at its final decision. 

Parallel to this, we will organise a credit aid conference which will be led by India, Japan and China, our main lending countries. However, there have been some conflicts and disagreements between us in the recent past. We are working towards resolving these and fostering friendly relations once again. Each country has different processes for granting loans. Through the credit aid conference, we hope to arrive at a general consensus on the lending processes. 

If we receive the IMF seal of approval, the world will once again trust us. It will help us to secure loan assistance as well as low-interest loans from other countries in the world. 

We are also currently holding discussions with the World Bank, Asian Development Bank, the United States, other friendly nations and heads of state to secure interim short-term loans till we receive IMF support. 

We will be able to lay the foundation to ensure economic stability following the successful completion of these tasks. But this by no means will be the end. In fact, it will be the beginning of our journey. A new journey toward a stronger economy. 

We will then have to forge ahead with our plans to strengthen and create a new Sri Lankan economy. 

In order to create the foundation for the path ahead, we will put forward an interim budget in August 2022 for the remainder of the period. The budget for 2023 will be presented in November. In addition to this, we will also present several new legislations in parliament that are necessary to strengthen our economy. We have already commenced discussions on these with all parties represented in parliament. I extend my gratitude to all political parties and intellectuals taking part in these discussions to support our nation-building efforts. 

We are also working towards ensuring food security and introducing political reforms. 

Already a plan has been formulated to provide farmers with the necessary fertiliser for the next cultivation season.  

We will also take steps to import rice under an Indian credit line and issue stocks to the Sri Lankan market in order to ensure price controls. This will provide some relief to the Sri Lankan consumers. 

I also take this opportunity to extend my gratitude to individuals and groups for their untiring efforts to revive the country’s agriculture sector. I would also like to note that many groups are attending the government’s discussions on food security while setting aside all party divides. 

The Samagi Jana Balawegaya and the National People’s Power party have pledged they will take the lead in establishing agricultural farms in the country. I thank them for their efforts in setting up these farms without having requested the government for any support for the process. As mentioned by MP Anura Kumara Dissanayake recently his party has already chosen the areas to commence these programmes.  

Meanwhile, Minister Bandula Gunawardane has also taken steps to allocate a large amount of unused reserve land belonging to the Department of Railways for agricultural purposes. I request Mr Sajith Premadasa and Mr Anura Kumara Dissanayake to discuss with Minister Bandula Gunawardane should they have any difficulties in securing land for their agricultural projects. I have also informed the secretary of the Committee on Food Security to hold discussions with the two-party leaders. 

On Tuesday, the cabinet approved the 21st amendment to the constitution. The Supreme Court has now announced its determination on the proposals for the 21st amendment put forward by the Samagi Jana Balawegaya. The cabinet has agreed to the government’s proposal. We must now come to an agreement on the proposals put forward and present the final draft bill to parliament. However, it is unfortunate that the process will be delayed due to the boycott of parliament by the Samagi Jana Balawegaya and the National People’s Power Party. 

I have requested former speaker Karu Jayasuriya to present a complete plan and report on the newly proposed parliamentary committee system. He handed over his report on Monday. 

Therefore, I call on both parties to once again attend parliament immediately and support the passing of the 21st amendment to the constitution and agree to establish the new parliamentary committee system. 

As I have mentioned before, the situation we face today is in no way normal. I have repeatedly stated that Sri Lanka has not faced a crisis of this magnitude in its recent past.

Once we have established a firm economic foundation you can hand over power to any political party as per your wish at an election and elect 225 suitable representatives to parliament. The responsibility and power to do so lie with you, the citizens of this country. You will be then given the opportunity to reject those you believe were responsible for the predicament Sri Lanka is facing today.  In turn, the new government will be given the mandate to bring those responsible before justice. But all this can only be achieved following the revival of the country. 

Keeping this in mind, I call on the country’s citizens to contribute to the efforts to rebuild the country from the abyss it has fallen into today. 

So let us all first work together to come out of this situation. There will be difficulties. There will be hardships. But even while facing these difficulties and hardships each of us has things, however small we can do to contribute to this effort. I call on all Sri Lankans to bear these difficulties and hardships for a short period of time and contribute to the nation-building effort. 

Due to the processes put into action by the current government, you will experience a gradual decrease in difficulties faced by you. We have been able to reduce the time period of the power cuts. 

We have also taken steps to import 100 000 MT of LPG utilising a World Bank loan of USD 70 million and USD 20 million of our own reserves. We will be able to eliminate the gas shortage once we receive these LPG stocks. 

Currently, Sri Lanka is in need of USD 550 million to meet its monthly fuel needs. However, in the face of the economic crisis, we are experiencing difficulties in securing the necessary funds for this purpose. As a result of this, we will take steps to import the maximum fuel stocks possible based on our dollar income. Resolving the fuel shortages will take more time. Therefore I request you to economise when using fuel. 

We are aware the country’s schools education has collapsed as a result of this crisis. The children have missed out on months of study. First because of the Covid pandemic and now because of the economic collapse. Minister Susil Pramajayantha and the officials of the Ministry are taking necessary steps to rectify the situation. The relevant authorities are formulating a plan to give priority to school buses and school vans when providing fuel.  We will ensure that a conducive environment for continuous study is created for the children of this country. 

Step by step let us go forward. 

The world will only assist us if they sense a strong urge and dedication on our part to come out of this crisis. Therefore we can either show them our aspiration as a nation to rebuild our country. If not we can display our indifference and disinterest, through committing various acts of sabotage. Your struggle must be one for rebuilding and uplifting our country. It should not be to destroy our country. Therefore I urge you to carefully consider and be vigilant in your actions at all times. 

The Samagi Jana Balawegaya and the National People’s Power Party have now come to a common stance of boycotting parliamentary sessions.  

The Samagi Jana Balawegaya had previously stated that Sri Lanka must work together with the IMF. Has their stance changed since? Does the National People’s Power Party agree or not with the discussions being held with the IMF? 

I requested the IMF to discuss with all political parties. I request both these parties to attend these discussions. Solutions are far more important than criticisms at this critical juncture. Therefore if you possess better solutions I urge you to present them to us. 

The 21st amendment to the constitution will be presented in parliament shortly. Do these two parties have no need for the 21st amendment? Do they not need independent commissions? Are they for or against facilitating the ability of both government and opposition MPs to participate in governance through the parliamentary committee system? This is the opportunity for the Samagi Jana balawegaya and the National People’s Power Party to present their views on these. 

But there is one important fact we must not forget at this juncture. Today there is a collective protest by citizens against the whole parliament. At such a time a host of economic and political reforms affecting the country’s future have been proposed in parliament. If one has a true love for one's country, what must be done now is to extend one's support to introduce these reforms and to point out any shortcomings. 

Therefore I call on everyone to step away from traditional politics and to think afresh for the sake of our country. I also invite them to join the parliamentary meetings being held to expedite these necessary economic and political reforms. 

I would also like to emphasise that it is the aspiration of the people that these reforms are expedited and implemented. 

If we can set aside our differences for a short while and only think of our country at this juncture I believe we will be able to safeguard our motherland from this impending disaster. The flock of quails were only able to escape the hunter’s net by flying away together along with the trap set for them. If the quails merely resorted to blaming the hunter, they would have all been trapped and met a tragic fate. Therefore let us escape this economic trap. Let us work together to overcome these challenges.