Sri Lanka cannot abandon IMF framework, must strengthen foreign ties – Ranil

Sri Lanka must embrace rapid economic growth and bold reforms to secure its future, former President Ranil Wickremesinghe asserted, warning that the country cannot afford to remain stagnant.

Joining Ada Derana’s current affairs programme @hydepark, the former President emphasized that reforms are required for the country’s economy to move forward, while questioning whether the current government is willing to take the necessary steps. 

“This economy is not a fully market economy. We have to do the reforms. To go ahead, we have to make major changes,” he said, adding that “I don’t know if the current government is willing to make the changes from the statements they have made. But without major changes, without getting foreign money, being friendly with countries… We have to work with India as the first step. We can’t be by ourselves in this world.”

Speaking on Sri Lanka’s foreign relations, economic policies, and the challenges ahead, Wickremesinghe defended his leadership during the financial crisis and outlined the necessary steps to drive recovery and long-term stability.

Former President Ranil Wickremesinghe defended his handling of Sri Lanka’s foreign relations and economic crisis during his tenure, stating that his government pursued a strategy of “multi-alignment” rather than balancing between global powers.

“We align with all our friends. We had a good relationship with China, and that relationship continued. We had big projects like Hambantota Port, Port City, but unless Sri Lanka grows, they can’t get a return on these projects.”

However, he warned that Sri Lanka must grow significantly to ensure returns on these investments, stating, “We must grow at least fivefold, they will be happiest if we grow tenfold because that means returns on their projects will come fast. China is willing to help us, but if we don’t grow, they’ll forget about us. China is also going to create an economy inside the Indian Ocean. We must also be a part of it.” 

The former president also emphasized the evolving economic landscape of the Indian Ocean, stating that Sri Lanka must integrate itself into China’s economic ambitions in the region while recognizing India’s emerging dominance. “The big player here is going to be India. Then we have China, Japan, and Indonesia growing. Australia is also trying to position itself as a regional superpower for renewable energy.”

“The framework has been laid [during my tenure], the question is if they are going to continue or not. If you stand by your word and you’re really upto performance, your economy is strong. If you don’t do that, the rest is useless.”

“Sri Lanka needs fast growth. This economy is not a fully market economy. We have to do the reforms. To go ahead, we have to make major changes. I don’t know if the current government is willing to make the changes from the statements they have made. But without major changes, without getting foreign money, being friendly with countries… We have to work with India as the first step. We can’t be by ourselves in this world”, he noted.

On IMF Agreement and Economic Recovery

Addressing the International Monetary Fund (IMF) program, Wickremesinghe stressed the importance of maintaining policy consistency. “We have stabilized the economy. The next phase is recovery. Investments lead not only to recovery but also to growth, and you [the current government] have to start now.”

He dismissed suggestions that Sri Lanka could have avoided an IMF bailout, stating, “We could not recover without going through the IMF. If not, where will you find the money? All our creditor nations and bondholders wanted an IMF certificate. Sri Lanka has broken many agreements with the IMF in the past, but under my leadership, we did not.”
Furthermore, the former President added: “You should continue the same policies, if you are amending the IMF agreement, it must be within the framework and the debt sustainability analysis and the EFF agreements and it must be agreed to by the IMF.”

“Everyone has to take responsibility. IMF is also answerable to creditor nations and private bond holders. They are very very careful, you can’t be changing things like earlier. You have to stick to it. If you want to change the economic transformation act, you have to say what it is. I mean there’s a lot of loose talk here. So far, I don’t see much of implementation taking place which I think is going to be the major problem.”

He also expressed views over the government borrowing Rs. 700 billion from the domestic market despite previous assurances against it, citing revenue shortfalls. “One treasury official said yesterday that they lost about Rs. 60 billion due to tax amendments, but some claim it to be even more. When the IMF review team arrives in early April, they will have to address this. But it’s a bit worrying that we have these figures.”

On His Leadership and Political Role

When asked if he could have handled the crisis differently, Wickremesinghe confidently replied, “I handled the crisis. I don’t think anyone would have handled it differently.”

Rejecting allegations that he manipulated political events to assume the presidency in 2022, he stated, “Did I manipulate people to come and burn my house? No one else wanted the job. We all thought the Leader of the Opposition should become Prime Minister, but he didn’t want it. The present President didn’t want it. I have done my best—I don’t know if anyone else could have done better than me.”

Regarding his involvement in the current administration, he clarified, “No, they are not working with me.”

When asked about his views on the ‘Batalanda’ commission report he said: “I am always committed to democracy. As far as the report is concerned, I made a statement, I have nothing more to say about it. This is a 25 year old report. I am not interested now in talking about Batalanda, but the global affairs going on are more interesting. Let the parliament debate it.”

As for his future in politics, Wickremesinghe indicated that he is stepping away from national politics, saying, “I’m keeping out of national politics, and take a holiday for Sinhala New Year” and added that he is more interest in global affairs right now.
 
Meanwhile, Wickremesinghe concluded: “We need not to be poor. We can have a trillion dollar economy. You must go for it. But to do that, you must understand the realities of economics and the current geopolitics. We have to live with it. We must know to get the best out of the world.”

Watch the full programme above…