Monday 18th September, 2023

Some henchmen of the Rajapaksa family, which is responsible for ruining the economy, have taken upon themselves the task of investigating the causes of the country’s bankruptcy! They are all out to absolve their political masters of wrongdoing in a bid to shore up the latter’s chances of winning future elections. Interestingly, their efforts have received a fillip from the UNP, of all parties. UNP Chairman Wajira Abeywardena, MP, has claimed that the declaration of the country’s bankruptcy was baseless, arbitrary, and conspiratorial. His stance is at variance with that of his party leader, President Ranil Wickremesinghe.

Sri Lanka became bankrupt last year when its foreign reserves plummeted to USD 25 million, leaving it without forex to pay for even essential imports, especially fuel and medicine. People waited in long queues for days to obtain diesel, petrol, kerosene, cooking gas, milk powder, etc., which were in short supply. Protests erupted countrywide, and some of them turned violent. Besides, daily power cuts, which were extended to 13 hours, crippled industries, causing job losses. The country was left with no alternative but to resort to a soft default, utilise foreign earnings and aid for essential imports, and seek IMF assistance to straighten up the economy. That was the only way it could prevent its rapid slide into anarchy, with irate public taking to the streets. It has benefited tremendously from financial assistance from India.

If the announcement of the debt default had been unauthorised and unwarranted, as MP Abeywardena claims, President Gotabaya Rajapaksa or Prime Minister Mahinda Rajapaksa or the Finance Minister Ali Sabry would have hastened to annul it. Instead, they based their economic recovery strategy thereon. So did Wickremesinghe after securing the presidency.

The UNP Chairman’s argument that the country was in a position to pay back debt at the time of the declaration of its bankruptcy runs counter to President Wickremesinghe’s oft-repeated claim that the country was bankrupt when he took over the reins of government and his attempts to achieve economic recovery are yielding results. About three months ago, President Wickremesinghe was quoted by his media division as having said, at the AGM of the Sri Lanka Institute of Directors (SLID) in Colombo: “I hope that by September Sri Lanka will be able to shed its bankruptcy status. (Emphasis added.)

It may be recalled that Wickremesinghe, after being appointed Prime Minister in 2022, admitted that the country was bankrupt. On 06 July 2022, CNN reported him as having told Parliament, “We are now participating in the negotiations [with the IMF] as a bankrupt country. (Emphasis added.) Therefore, we have to face a more difficult and complicated situation than previous negotiations [with the IMF].” Addressing Parliament on 08 Feb. 2023, President Wickremesinghe said, “If we continue according to this plan, we can rise out of bankruptcy by 2026 …” (Emphasis added.)

Moreover, President Wickremesinghe said, announcing the IMF’s decision to grant Sri Lanka an extended credit facility: “I took over a country that was on fire, A country that was in chaos; a country that seems to be without an iota of hope for the future; a country that had officially declared itself bankrupt. (Emphasis added.) Thus, it is clear that President Wickremesinghe himself has deemed the announcement of the country’s bankruptcy ‘official’, and therefore how can anyone else consider it unauthorised and unwarranted?

It would have been far easier for President Wickremesinghe to declare that the country was not bankrupt and resume debt servicing than to beg for an IMF bailout, if someone had wrongfully declared the country bankrupt. Will MP Abeywardena explain why his boss, Wickremesinghe, has not done so?

The Rajapaksa loyalists in the SLPP parliamentary group are busy cutting the ground from under President Wickremesinghe’s feet. That they do not want him to succeed in his efforts to stabilise the economy and thereby gain political mileage has become evident from SLPP MP Prof. Ranjith Bandara’s recent statement at the SLPP headquarters that all those who claim to have fared well on the economic front will have to face the harsh reality when debt repayment resumes. Reflected in his claim is the desire of the Basil Rajapaksa faction of the SLPP to see President Wickremesinghe’s economic recovery plan go awry. The UNP is unwittingly pulling political chestnuts out of the fire for the Rajapaksas.