"IMF loan : Govt. so knotted on the loan that it cannot even build a toilet for the benefit of the people "

(August 05, Colombo, Sri Lanka Guardian) UNP M.P. Lakshman Kiriella speaking to the media at the UNP media unit yesterday ( 4 Aug.), while giving a lucid account on how the Govt. has got caught in an inescapable vortex of a vicious circle of eternal borrowings and endless debt settlement due to its own fiscal mismanagement and monumental economic blunders since its advent to power , said , this much publicized IMF loan of 2.6 billion dollars over which the Govt. is jubilant in its puerile nature ,is not at all a triumph for the people or the country, because Govt. in its dire desperation has taken the loan after abjectly surrendering to all the terms and conditions imposed by the IMF, only to settle the existing Govt. foreign debts. In other words, from the standpoint of the suffering masses, it is a damp squib only adding further to the already burdensome trials and tribulations of the people .

In 2008 September , the foreign reserves was Rs. 3800 million which drastically dropped to Rs. 1400 million by March 2009 . This is because the Govt. had no fiscal responsibility or proper management. Indeed , the UNP at that time introduced the fiscal responsibility Act to ward off fiscal recklessness of Govts. But. this Govt. after its advent purposely kicked aside the Act in order to cover up its irresponsible fiscal mismanagements and blunders. This foreign reserve drop was further compounded by the existing un- payable debts. and the hedging soodhuwa of the Govt. This IMF loan was desperately sought by the Govt. therefore to overcome these huge debt burdens among others , he pinpointed. Within the last 20 months , the Govt.’s debt burden to commercial Banks stood at US $ 1294 million while on the hedging ‘soodhuwa’, the Govt. owed US $ 800 million to the Commercial Banks.

Mr. Kiriella also went further to illustrate how this Govt. had brought wrought economic disaster on this country : for the whole period since independence until 2005 , the country’s total foreign debt commitment was US $ 1.5 billion , but after this Govt. just within three years from 2005 , it has increased three fold , now standing at US $ 5 billion , he exclaimed. The terms and conditions of the IMF loan are such, they do not allow the Govt. even to build a toilet for the welfare of the people . In other words , although the Govt. overcame its debt burdens by this loan like a bankrupt businessman in his utter desperation borrowing at any cost from the clutches of the creditors and usurers, it cannot use the loan for the welfare of the people . All the monies are deposited in foreign Treasury bonds , and the Govt. is bound to get permission from the IMF to remit to SL ,he asserted.

One of the conditions of the loan is that the Govt. must reduce the budget deficit to 7% , which means that it must increase its income by Rs. 250 billion this year . How is the Govt. going to achieve this when during the first quarter of this year alone , the income has dropped by a further 10% ?, he asked . The Govt. which has become notorious for its hush hush deals even on country’s policy matters is duty bound to explain to Parliament how it is going to fulfill the conditions of the loan without heaping more and more burdens on the people via taxes , tariff and price hikes by subtle and surreptitious methods , he concluded.

-Sri Lanka Guardian