The New government and foreign debt - EDITORIAL

The new government of President Anura Kumara Dissanayake seems to be under pressure to implement the promises given to the people by his party, National People’s Power (NPP) before the September 21 Presidential election.

In fact, it is more than the ordinary people, the adversaries of the NPP who are pressurising the government to implement what it promised to the people during the recent election campaign. Their pressure on the government to keep all its pledges straightaway points to what they are up to. 

Yet, a pressure campaign within the people is necessary but in a fair manner in order for the government not to deviate from the programmes it put forward to the people not only during the election campaign, but also throughout its recent past. Also, it is comprehensible that except for some procedural issues one cannot expect any major change from the government until it gains a working majority in Parliament.

Allegations are being levelled both by the loyalists and adversaries of former President Ranil Wickremesinghe that this government is following the same path that was followed by Wickremesinghe. Again, it is logical that any government has to follow the previous government’s policies and programmes until they are changed in line with its promises or policies. 

A major issue that is being discussed in the public domain is that the Janatha Vimukthi Peramuna (JVP), the core party in the NPP alliance as a leftist party that still accepts Marxism as its guiding doctrine has deviated from its long-held stance on the International Monetary Fund (IMF). In fact, the JVP has been rejecting the IMF from its inception as an imperialist tool for the subjugation of Third World economies and the party has been doing so in respect of the current IMF-sponsored programme for Sri Lanka as well, until late last year. 

JVP/NPP leader Anura Kumara Dissanayake said in August last year – after Sri Lanka received two out of eight tranches of the 2.9 billion US dollar Extended Fund Facility (EFF)- that Sri Lanka had lost its financial sovereignty to the IMF, which, he said, was overriding Parliament’s power over taxation and fiscal policies. 

JVP General Secretary Tilvin Silva also in March last year said “no country in the world has made it after going with the IMF. The IMF does not exist for the people but to save thieving governments.”

However, with the increasing possibility of its ascension to power at the approaching Presidential election, the party seems to have realized the danger that it was going to encounter in case the IMF withdraws its programme from Sri Lanka and the resultant deprivation of financial aid by other international financial organisations such as the World Bank and the Asian Development bank. In accordance with this realisation the party changed its stance on the global lender. The IMF’s interest in talking to the NPP as a strong contender at the Presidential election facilitated the party for a smooth slide of its stance. 

Former JVP Parliamentarian Dr. Nalinda Jayatissa told media in September last year that a future NPP government will never hesitate to work with the IMF and other international financial institutions. Later the NPP leader also, showing a clever transition from their earlier stance to a new one on the IMF said in a televised interview that although the country could have found some other avenue to face the economic crisis, now the issue has reached a point of no return and they have been compelled to continue with the IMF programme. He said that his party was amenable to the changing local as well international situations. 

Despite this pragmatism having given ammunitions to the adversaries of the NPP to accuse the party of vacillation, it has saved the country from another economic disaster following the Presidential election. 

Although the country was given a breath space with the assistance provided by the IMF, and despite former President Wickremesinghe boasting that he salvaged the country, what  happened was that the government was able to streamline the fuel supply with the newly borrowed money which normalised many sectors. The real challenge that the new government is going to face is to repay the accumulated loans from 2028, as agreed with the creditors.