Do we have a plan to repay our foreign debt? - EDITORIAL - Opinion

Do we have a plan to repay our foreign debt? - EDITORIAL

21 October 2023 04:59 am Views - {{hitsCtrl.values.hits}} 6 Bookmark

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It never rains but pours, the age-old adage goes. On April 21, 2019, terrorists carried out a heinous attack on innocents at three churches and tourist hotels in Sri Lanka. The attack killed over 250 civilians and included a number of foreigners. The tourist industry which had just begun to raise its head in the aftermath of the ethnic conflict took a hard hit.

Central Bank records reveal tourist arrivals per day, which averaged around 7,600 during 2019 prior to the attacks, dropped significantly to around 1,700 during the two months after the attacks. This was closely followed by the outbreak of the Covid-19 pandemic.
The first case of the virus in Sri Lanka was confirmed on January 27, 2020. Subsequently, the country went into lockdown effectively closing the doors to tourism as a whole. It also resulted in ending remittances of foreign workers.
Earnings of expatriate workers form the largest slice of our foreign earnings
Tourism is the third-largest source of foreign exchange earnings -behind worker remittances and the apparel industry. Earnings from tourism which amounted to US dollars 44,381 million in 2018 dropped to $3,607 million in 2019 and fell to $ 682 million by 2020.
Facing a shortfall in hard currency, in April 2021, then-President Gotabaya Rajapaksa announced a ban on the import of agrochemicals. A middle-rank military man with no practical knowledge of running a country, he little realized he was killing off agricultural production, while at the same time killing another major foreign exchange earning sector -tea, coconut and rubber.
By April 12, 2022, with insufficient income to repay even interest on foreign loans amounting to US $34.8 billion, the country declared itself bankrupt. Basics such as fuel, cooking gas and medicines became unavailable. Lawlessness broke out and in July the then President fled the country.
Following the President fleeing, in July 2022 Wickremesinghe was sworn in as President of the country.
Within months of his assuming the Presidency Wickremesinghe was able to somewhat stabilise the food and fuel shortages. A debt restructuring agreement was reached with the International Monetary Fund (IMF) and the first tranche of funds was made available.
However, the bailout came at a cost. It calls for a cut in State subsidies, the divestiture of loss-making State-Owned Enterprises as well as a trimming down of staff.
These disciplines imposed by that organisation (IMF) heaped more burdens on the most vulnerable sectors of our society. For example, UNICEF has reported that 5.7 million people, including 2.3 million children, are now in urgent need of humanitarian assistance. It means 1/4 of our population lives in hunger, and the cost of living is still rising.
Political parties in Opposition are calling for demonstrations against the rising cost of living and calling for a change in government.
Unfortunately, none of our political parties in Opposition has revealed to the electorate what they would do differently, to ease the pain of the people, while at the same time easing the country’s debt burden, if they were to be voted into power.
At this time our countrymen and women need to know definite plans of action our diverse political parties have if any.
We do not want to hear how they will bring money stolen by past leaders back to this country. We all know that this has never happened in any part of the world.
At one point in time, a particular political party suggested ripping up the tea plantations and replanting them with potatoes! Our people do not need such infantile proposals.
To create avenues of income you cannot start by decimating sources already bringing in precious exchange to the country.
Let our political parties put forward specific plans of exactly how they will ease the present burdens heaped on the people. Let them tell us how they plan to open up new sources of income to help repay our foreign debt and create employment.
But, let them not take you and me for fools who blindly believe whatever they shout from platforms and rooftops.

Comments - 6

D. E. M. O'CRACY. Saturday, 21 October 2023 03:54 PM

VERY CORRECT... TELL US HOW THE COUNTRY WOULD EARN DOLLARS. WE WILL NOT ACCEPT IF WE ARE TOLD THAT DOLLARS WOULD BE BROUGHT FROM THE MOON. ELDERS WOULD REMEMBER 2 MEASURES OF RICE FREE FROM THE MOON PROMISED BEFORE 1970 ELECTIONS

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Fred Sunday, 22 October 2023 02:12 AM

Spend less than you earn.Sounds stupid but that's all there is to it.As a country that means parking your car and taking the bus to save precious fuel for production. There will be a period of pain but you will be surprised at how quickly the coffers fill up when the nation lives frugally.Can recall South Korea doing something similar many many years ago must be other examplesWhen prosperity returns can celebrate as a nationMaybe you will still need the IMF but it will be as a support not as a crutch

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Champika Munidasa Sunday, 22 October 2023 11:54 AM

Kudos for the President for stabilizing the country to a certain extent. How far can he go with all the crooks around him whether he likes it or not, he has to work with them? Opposition has no unity. They just parrot out what the people are going through and demand their precious votes to change the system for better. People are sick and tired of their promises as it is loud and clear no corrupt politician will ever get punished by courts. Opposition parties should put forward how they are going to bring foreign exchange. No politician can fool people any more.

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Garvin Karunarathe Sunday, 22 October 2023 01:58 PM

Thanks Editor for this valuable piece of writing. SL was not a dollar in debt when Pres Jayawardena took over. Till then SL ws run with the incomes that came in which were collected with great care- every dollar that came in was found and we spent it for essentials and gave veryu small allocations for the import of cars etc. Even in the early Fifties when we had dollars tro implement the Gal Oya project and did it using Morison Knudson, the firm that constructed the Hoover Dam, paying them in dollars we had, we were strict about importing cars. in about 1952 oit was a limited anount ofdollars that was allowed to import cars. Till Jayawardena accepted the IMF's Structural Adjustment Programme at the tail end of 1977 we managed with effective controls on imports and without giving any dollars for travel to anyone unless it was required for the country. Following the IMF's Structural Adjustment we became indebted. My books tell the story. Garvin Karunaratne Author of How the IMf Ruined S

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Garvin Karunaratne Sunday, 22 October 2023 02:52 PM

Thanks for entering mysmall idea. Will write agood paper detailing how we became indebted, from being a country that did not owe a dollar in 1977 to a country that had a foreign debt of $ 53 billion when President Gota left and now the debt will be far more. Thanks Editor. My three books tell it all; How the IMG Ruined Sl(2006) How the IMF Sabotaged Third Woirld Development, Godages/Kindle 2017 How the IMF's Structural Adjustment Destroyed Sri Lanka 2022 Thanks Editor. Garvin

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N V Jen Tuesday, 24 October 2023 12:34 PM

No, on the contrary all governments in the past and in future borrowed or planning to borrow more, to import unwanted crap in to the country, to continue to run the SOE's that are bleeding the coffers blissfully, to fund local and international adventures of the ministers

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