IMF assistance sought but Sri Lanka must be mindful of its core policies: central bank chief | Sinhala News

Sri lanka News – Sri Lanka’s government has decided to seek International Monetary Fund (IMF) assistance in the face of its worsening economic crisis but the country must be mindful of the organisation’s core policies, Central Bank Governor Ajith Nivaar Cabraal told an all-party conference on Wednesday (23).

“The opposition and various experts have expressed the belief that connecting with the IMF will boost investor confidence and encourage non-loan inflows.  The IMF has also stressed the urgency of implementing a credible and coherent strategy to restore macroeconomic stability and debt sustainability.

“We must also remember that when dealing with the IMF over various economic matters, their policies might be strict,” said Cabraal.

Before President Gotabaya Rajapaksa confirmed Sri Lanka’s plans to go to the IMF, Cabraal had repeatedly denied speculation on the matter and had also reportedly been opposed to the move. There had also been speculation about a rift between Finance Minister Basil Rajapaka and the Central Bank.

High spending politicians and stimulus-happy economists generally dislike the IMF. However, IMF recommendations to trim government generally benefits the general public, according to some analysts.

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The central bank chief was speaking at an all-party conference called by President Gotabaya Rajapaksa on a proposal by former president Maithripala Sirisena. The conference, currently taking place in Colombo at the time of writing, is being boycotted by the main opposition the Samagi Jana Balavegaya (SJB) and the opposition National People’s Power (NPP). However, the opposition United National Party (UNP) and Tamil National Alliance (TNA) are in attendance.

Briefing the gathering on Sri Lanka’s prevailing crisis – one of the worst in the island nation’s history – Cabraal many countries suffered the consequences of the COVID-19 pandemic but some countries were better prepared than others for the economic fallout that came in its wake.

“When the pandemic was emerging, some countries were on a strong economic footing. But some countries had weakened for various reasons,” he said.

This comment drew the ire of former Prime Minister and UNP leader Ranil Wickremesinghe who took Cabraal to task for bringing up party politics into an important discussion.

“We didn’t come here to discuss party politics or who is responsible. We didn’t come here for politics as intimated by the governor. I regret that he started off by saying this was the previous government’s fault,” said Wickremesinghe.

“What happens if I respond to that? Would that also warrant a response? This will go on, and will end up with Prince Vijaya since none of this would’ve happened if he never arrived in Lanka,” he said, inviting laughter from President Rajapaksa.

“I will only say one thing on this. We were on a different policy trajectory. Back then, people had food to eat, had petrol, etc, I won’t say any more than that,” the former premier said as the president continued to chuckle.

Wickremesinghe also noted the absence of the other opposition parties.

“A section of the opposition is not here. I didn’t come here to defeat them. We have to go and tell them what was discussed here and also get them on board,” he said.

The UNP leader then had an exchange of words with finance minister Basil Rajapaksa over the IMF’s report on Sri Lanka.

He reiterated an ongoing demand for the report to be tabled in parliament, to which the finance minister insisted that the report has not yet been made available to the government.

“This was promised to us on several occasions. I think that’s the reason some parties are not in attendance here. I would like to know if we can have it this week or next,” said Wickremesinghe.

Rajapaksa said: “The IMF report hasn’t been made fully available to us yet.”

Wickremesinghe: “They say they have sent it.”

Rajapaksa: “No, we haven’t got it.”

A back-and-forth ensued, and it was agreed that a draft of the report has indeed been sent to the government. Rajapaksa said some of the contents of the draft have been challenged by the government, and the IMF will finalise the report and send it back.

“So you admit the draft has come. All this time, it was said it hadn’t arrived,” said Wickremesinghe.

“Well, a draft – it first has to be discussed with us. You know better than I do,” said Rajapaksa.

Asked by Rajapaksa if Wickremesnghe wanted the draft which cannot be given as it has yet to be finalised, Wickremesinghe responded seemingly in jest: “No, don’t give it to me. Or [someone] will say a deal has been made.” (Colombo/Mar23/2022)

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