President: Those who try to dictate terms to IMF have Montessori-level knowledge 

President Ranil Wickremesinghe told Parliament yesterday that Sri Lanka was set to come out of bankruptcy by securing of the second tranche of the International Monetary Fund’s (IMF’s) Extended Fund Facility.

“We will now focus on securing the foreign aid that was suspended after we declared bankruptcy,” the President said, making a special statement to Parliament to officially announce the IMF decision to grant the second tranche under the EFF.

He said that Sri Lanka still has a difficult journey ahead.

“We have travelled through a suspension bridge and we have no choice but to continue our journey through this bridge,” he said, stressing that Sri Lanka has no choice but to work with the IMF.

“We have managed to strike a deal with most of our debtors for restructuring of debts. However, we are faced with the task of securing a deal with our private debtors who are mainly bond holders,” he said.

President Wickremesinghe said that the conditions imposed by the IMF on Sri Lanka, can only be removed by continuing along the same path and strengthening the country’s economy.

He expressed optimism that the IMF now admits that Sri Lanka has taken decisive steps to overcome the state of bankruptcy.

“Now they [IMF] admit that we have taken decisive steps to save ourselves from the label of a ‘bankrupt state’. I am humbled to be able to lead this proud journey”, the President mentioned.

“I took over a bankrupt country last year. No leader came forward to take over that bankrupt country. Everyone was afraid to accept this challenge. None of the heroes who are now addressing the Parliament had the courage to come forward. I accepted that challenge…”

“All I had was determination and dedication. Not a single MP representing my party was in the Parliament. But the majority of MPs supported me although they were also insulted and mocked. The people of the country also supported me. They faced various hardships and supported this journey”, he added.

The President said that he highlighted that the country’s inflation prevailed at 70% at the time he took over the country, but it has now been brought down to 1.5%.

“At the time the depreciation of the rupee had risen to 80%. The value of the rupee increased to Rs. 360 per dollar. Now it has stabilized at the level of Rs. 325 – Rs. 330 per dollar.”

Moreover, Wickremesinghe said: “We have no other path but this path. There are two main factors in this path – having access to IMF assistance and debt restructuring. We handled both those factors properly. So we have been able to obtain good results.”

Furthermore, he emphasized that with the approval of the second tranche from the IMF, the country will receive multiple advantages including USD 150 million from the World Bank for deposit insurance, which will make the financial sector tremendously strong.

“This makes the banking and financial sector 100% secure”, the President said.

“Foreign investors can invest in Sri Lanka without any doubt then. Our Letters of Credit are accepted at the international level again.”

The President also admitted that the government is aware that a certain group of the society has faced hardships as a result of imposing taxes including VAT, adding that the government had no other choice.

“Some parties question the purpose of a government to govern the country if it has to be subjected to the conditions of the IMF. They claim that they will impose conditions on the IMF once they come to power. These are just childish stories. Only the people who have ‘Montessori-level knowledge’ about the economy can tell such stories”, he added.

“Remember, we can get out of the IMF conditions only if we continue on this path and build a strong economy under these conditions”, the President said.