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Opposition questions Government’s economic recovery efforts

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By Sandun Jayawardana  

On the day President Ranil Wickremesinghe addressed Parliament to brief the House regarding the Government’s economic programme, the Government had to push back at accusations from the opposition over a lack of transparency regarding its economic recovery efforts.

Speaking after the President made a special statement to Parliament, Opposition Leader Sajith Premadasa claimed that whatever the picture the President may have tried to portray, the “new normal” that is in effect today has heaped pressure, despondency, tears and pain on the people.

Opposition Leader Sajith Premadasa

He stated that if President Wickremesinghe’s signature “Aswesuma” programme is genuine and meant to eradicate poverty, it should have a plan for increasing production, savings, investments, consumer spending and developing an export-centric economic programme. “It has none of these,” he claimed.

Mr Premadasa claimed that what the President should have done as soon as he assumed office was to conduct an islandwide census to establish the country’s poverty line to see who is above, who is on the line and who is below the line and then implement the Aswesuma programme accordingly. “As of now, it is only a programme for giving handouts. There’s no plan to generate income.”

He also claimed that the government’s debt restructuring programme had been proceeding at a snail’s pace for two years. Sri Lanka’s debt restructuring efforts are similar to those of Zambia, Lebanon and Suriname. There are countries, however, that have implemented these programmes rapidly. Unfortunately, Sri Lanka doesn’t fall into that category, said Mr Premadasa.

He claimed that Sri Lanka should have received the third tranche of the bailout package from the International Monetary Fund (IMF) in March and that the reason it did not materialise and why the second tranche was delayed was because the government had not displayed the transparency, responsibility and accountability that were the core tenants of the programme that the IMF wanted implemented.

As an example, he claimed that though the government raised income tax, 40% of the increased revenue had been allocated for one single line item; diet and uniforms of the armed forces. He questioned the transparency in this matter and asked who the supplier(s) involved were.  

He called on the Government to support the private members’ bill presented by Tamil National Alliance MP M A Sumanthiran to the Employees’ Provident Fund (EPF) Act, noting that the bill aims to create transparency on EPF investments. He said the Government could not oppose the bill on the grounds that its passage would mean having to disclose “market sensitive information.” He claimed “market sensitivity” was a smokescreen to hide behind to engage in corruption.

State Minister of Finance Shehan Semasinghe hit back strongly, insisting that neither the IMF nor any other country or partner that Sri Lanka was engaging with had expressed displeasure over the Government’s economic programme. “On the contrary, they have continued to laud President Wickremesinghe’s efforts.”

The Opposition Leader was “spouting lies,” said the State Minister, adding that it was only on March 21, 2024 that Sri Lanka entered into a staff-level agreement with the IMF. There is a process to follow thereafter until the tranche is released, he noted.

Mr Semasinghe asserted that the government needed to treat each party in the debt restructuring process equally. He however, stressed that the Government is not willing to disclose market sensitive information.

What the Opposition Leader was suggesting was to reduce taxes, electricity tariffs, fuel prices and effectively roll back all the Government’s reforms overnight if he should ever come to power, said Mr Semasinghe. In such a scenario, he will have only one option, which is to repeal the recently introduced Central Bank Act and allow money printing to begin again. He accused the Opposition Leader of talking to the gallery by presenting impractical solutions. “We saw how it (money printing) went. Inflation went up to 70%. There were queues. We couldn’t import fuel, gas, fertilizer, medicine or essential food items. We had power cuts. This will take the country back to the dark ages we witnessed before.”

Mr Semasinghe quipped this would have been the reason for Mr Premadasa not to take up the presidency when it was offered to him. “He didn’t take the presidency then as all he can do is criticize.”

Regarding the Opposition Leader’s claims over 40% of the raised income tax revenue going to the diet and uniforms of armed forces, Mr Semasinghe said the money is allocated based on statics provided by the Department of Census and Statistics.

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