SL facing grave risk of defaulting on its debt obligations – Dr. Harsha de Silva

Warning that Sri Lanka is in the throes of a looming debt crisis, SJB parliamentarian Dr. Harsha de Silva, said this is a serious issue, which should not be taken lightly, as the country is at serious risk of not being able to honor its debt obligations.

“As a nation, we have never defaulted on our loan commitments, but at a time the country is at crossroads over its debt burden, nobody should treat this grievous matter with levity irrespective of their party affiliations, he noted.

Stressing that the government must understand the grave risk of not being able to meet its debt commitments, the parliamentarian outlined that the situation needs to be managed in a strategic manner devoid of any arrogance.

He said Sri Lanka is saddled with servicing around US$ 6 billion in foreign debt next year (2021), and there seems to be no strategic plan to meet the challenge when taking into account the country’s current foreign reserves and revenue capacity.

“Therefore, I feel that the government should initiate official negotiations with international institutions, which have lent us money, and seek a pause or a grace period”, De Silva suggested.

Sri Lanka will have to pay more than 70% of its tax revenue as interest for the international debts the country has taken, he asserted.