Last chance for SL to get things right cautions CB Governor

• Points out handwork is only yet to begin
• Says continuing with old ways will lead to an even bigger disaster than what is currently ongoing  
• Asserts the need for SL to look at outperforming targets set to come out of crisis once and for all  
• Unlike the previous 16 times we went to the IMF, this time the situation is complex.  

By Shabiya Ali Ahlam  

While Sri Lanka appears to be letting out a sigh of relief after the US$ 3 billion bailout package received the approval from the International Monetary Fund (IMF) Executive Board, the Central Bank pointed out the actual work in ironing out issues has just only started.   The common sentiment in the past week is that the island nation has managed to sort out its issues that will ease the ongoing economic hardships. However, it is important now, more than ever, to be prudent in efforts taken and by no means take a step backward, Central Bank Governor Dr. Nandalal Weerasinghe said.  

 Addressing the Economic Outlook forum hosted by the Asian Development Bank (ADB) this week, which also put the spotlight on the country’s economic crisis, the Central Bank chief noted that Sri Lanka has learned a painful lesson last year and it must ensure the same mistakes are not repeated.  

“Unlike the previous 16 times we went to the IMF, this time the situation is complex. Previously, after completing the programme (IMF) we forget why we opted for assistance and get back to what was being done before. We cannot do that again. This time, there are no more chances,” stressed Dr. Weerasinghe.  
Continuing with the old ways will lead to a “disaster”, he implied, one bigger than what the entire economy and the people went through last year due to the relevant authorities not being proactive and acting early enough.  

In a bid to ensure Sri Lanka does not go back to square one, again, the governor said serious efforts are needed to not just deliver the commitments made to the major creditors and the Fund, but to outperform the expectations.  
“It is good if we can perform better than what we presented. This is what we should target, so we can come out of this crisis once and for all. We need to achieve debt sustainability faster,” he said.  

According to the Governor, Sri Lanka already has experience in this regard as in 2022 it did outperform what was expected of it from the IMF, and a delay of three months was witnessed due to the need to obtain financial assurances from key creditors.  

While reflecting similar sentiments, Member of Presidential Advisory Group on Multilateral Engagement and Debt Sustainability Sharmini Cooray noted that Sri Lanka must be more proactive in its efforts as the whole restructuring exercise is “all very new”.  

“We have to be very proactive and aggressive in coming up with proposals and putting it through to creditors. They are not going to volunteer. We have to do this.  
“There is no playbook. We have to make it up as we go. We have to come up with specific debt options and get them to the table. They (creditors) will take a while. We shouldn’t assume this will be an easy process. It will be very tough, therefore we need to move fast and take charge of the process,” said Cooray.