Twelve members of several political parties in the opposition have issued a collective response to the ongoing economic crisis in the country, seeking urgent, constructive, and sustainable solutions to the pressing situation.
The document is signed by Opposition Leader Sajith Premadasa, and MPs Rauff Hakeem, Tissa Vitharana, M.A. Sumanthiran, Kabeer Hashim, Harsha de Silva, Eran Wicramaratne, Shanakiyan Rasamanickam, Mano Ganesan, Rishad Bathiudeen, Karu Jayasuriya and R. Sampanthan.
In their statement, the parliamentarians noted that the country’s ratings have fallen to the level of being blacklisted in international credit markets. “Since April 2020, Sri Lanka has been locked out of borrowing using International Sovereign Bonds (ISBs) in the international market.
They also noted that repaying USD debt in this context means that the usable foreign reserves are down to below one month of imports - the lowest on record since independence.
The MPs also pointed out that the ratio of interest on debt to government revenue was above 70% in 2020, a historical high for Sri Lanka, and amongst the highest in the world.
The ratio of public debt compared to the value of Sri Lanka’s domestic production (GDP) is also the highest on record, at 120%, they said further, adding that it has skyrocketed, by almost 25 percentage points, in the last two years.
“Each of these situations by themselves would spell a serious economic challenge.”
The Opposition MPs recognized that the government has a daunting task ahead, and as a country, there is a need for us all to come together to overcome this challenge.
“We acknowledge that Sri Lanka should take immediate measures to ensure strong social welfare for its people so that the poor and vulnerable communities are protected from the adverse impact of this economic crisis.”
They also acknowledged the need for sound reform to the national economic policy that will address the root causes for this situation and ensure sustainable solutions to steer the country out of this unprecedented economic crisis, and forge an equitable and just solution for the future generations.
The MPs said they are fully cognizant that parliament has full control of public finance, and that each member of parliament has a “fiduciary responsibility” to ensure the proper management of public finances in the country.
In this context, the parliamentarians pointed out that the best way forward for Sri Lanka is to immediately initiate a multi-step process towards an orderly negotiated postponement and restructure of payments of its sovereign debt.
Sri Lanka can then correct its policies towards the path of sustainable economic growth and debt management, while also ensuring access to the essential needs and goods for the Sri Lankan economy and its people, they went on, explaining that this can reduce the pain and hardship that is currently experienced due to the shortage of foreign currency.
“In any path forward, it is essential that the government takes measures to consider the difficulties of the poorest and the most vulnerable people in the country and provide them with adequate social security protection, and relief.”
