President Ranil Wickremesinghe is the only leader who put together a manifesto that is accountable to the law. He said that independent candidate Ranil Wickremesinghe is unique in this crucial Presidential Election because he is a leader who has passed five bills on accountability.
The Minister further said that, although offering a manifesto during a presidential election is customary, Wickremesinghe is the first presidential candidate to offer a national program for the nation’s development. He said this while joining the Press conference held yesterday at Lauries Road, Colombo.
The Minister also said: although the economy collapsed to -7.8, the acute shortage of goods, and the fact that extremists conspired to pull the country into an abyss are things of the past, in the midst of killing one MP in broad daylight, burning houses of 72 MPs, and assaulting more than eight hundred people’s representatives; it is a historic fact that President Ranil Wickremesinghe, who worked to rebuild the country, initially took an Extended Fund Facility as Finance Minister and met the conditions of the International Monetary Fund without harming the country.
A country will never again fall into an economic depression thanks to the legalised national policy presented to build the country this presidential election.
Five Acts have been passed to legalise this national policy and this can be called Panchayudha, which ensures the security of a country.
Many Presidential candidates have been presented in the most crucial Presidential election in this country. Among them, the incumbent President Wickremesinghe is running independently as a common candidate regardless of political affiliation, party, colour, race, religion, caste and gender.
National policy
He is the only leader who legislated a national policy to build the country and run for the presidential election. The reason for that is that the greatest economic disaster in Sri Lankan history—one that nobody could have predicted—arose in the years following our independence in 2022.
In the history of Sri Lanka’s economy the growth rate had fallen to -7.8. Unable to face the international economy with the foreign reserves depleted, the country was unable to import petroleum, medicines, fertilisers, chemicals, food, and so on and there was an acute shortage of goods.
In that situation, where there was no solution to the suffering of the people, when extremists tried to burn down the legislature as a conspiracy and bring the country into anarchy, an MP was trampled to death on the road, and the houses of 72 representatives were destroyed and burned within 12 hours.
More than 800 people’s representatives were ambushed, a huge unrest was created in the country and there was a mass conspiracy. In a bid to prevent the country from descending into chaos, Ranil Wickremesinghe assumed the role of Prime Minister from President Gotabaya Rajapaksa.
His determination stemmed from the belief that there was no other option to protect his homeland and safeguard future generations. Wickremesinghe returned to Parliament with the aim of re-establishing parliamentary democracy, which is the foundation of the nation’s governance.
Subsequently, Wickremesinghe, alongside the current Prime Minister, Dinesh Gunawardena, took over the Presidency through a majority vote in Parliament. This marked the beginning of a challenging and arduous journey to rebuild the country—a task that had never been more difficult.
One of the first actions taken was to ensure that the country had sufficient fuel to operate. The economy could not function even for a week without fuel, which is essential for running buses, trains, and other daily activities. The desire to end the long petrol queues and prevent patients from dying due to a lack of essential goods and medicines was strong. As a short-term solution to the economic crisis, the Government turned to the IMF, the world’s last-resort lender, and secured a comprehensive loan agreement.
Severe difficulty
Sri Lanka had entered into agreements with the IMF 16 times before, but the 17th agreement, made during a time of severe difficulty, was under an extended credit facility. The loan came with stringent conditions designed to stabilise the country and prevent further economic collapse. The release of the first tranche of funds was contingent upon meeting specific targets, and subsequent installments were disbursed based on progress. This gradual release of funds helped rebuild confidence in the international community, paving the way for debt restructuring. To this end, Japan, India, and France were appointed as official creditors, with France’s Lazard handling the legal work.
Under the extended credit facility, a shortage of external resources is anticipated in 2025. The total foreign assets of the country are projected to decrease from US$ 5.6 billion to US$ 5 billion by 2025. The IMF has committed to providing US$ 663 million under the extended credit facility to assist in preparing the budget.
The World Bank will provide US$ 700 million, and the Asian Development Bank will contribute US$ 400 million, with US$ 300 million in loan relief also available.
2025 Budget
Anyone claiming that they can prepare the 2025 Budget without these resources would be unable to govern Sri Lanka. If the agreement is not adhered to, and the Government does not act according to its terms, no further loan facilities will be granted. The country could end up like Zimbabwe or Argentina.
By 2027, the Budget deficit is expected to reach US$ 3,911 billion. The US$ 1.5 billion provided by the IMF, Asian Development Bank, and World Bank will not be sufficient. Therefore, the IMF has authorised the issuance of a sovereign bond in the international money market in 2027 to secure a loan of US$ 1.5 billion.
In addition to this, specific conditions have been set, including an increase in Sri Lanka’s foreign assets to US$ 8 billion by 2025, US$ 10 billion by 2026, and further growth in foreign reserves by 2027. Only with gross foreign assets of US$ 14 billion can the country access the foreign market for loans. As a result, the short-term program will extend to 2027, with a long-term plan outlined from 2025 to 2047 in five acts. This is the first time in history that a comprehensive short-term and long-term policy has been prepared for the country.
One might suggest that these laws could be changed as soon as a new Government comes into power. However, any Government that attempts to change these policies would likely last only two weeks or a month. The entire world would turn its back on us. We do not have the capacity to print money arbitrarily.
Agreements have been signed with a commitment to fulfilling financial obligations responsibly. Any deviation from this would result in international abandonment. We would be left isolated and alone, but we cannot exist without global support. We need to export coconuts, gems, tea, and rubber. How could industries like tea and gems survive without international trade? We also need to import petrochemicals and machinery. We cannot function in isolation from the world. No other country can abandon this system. We must engage in global trade to survive. We cannot do anything without the international community.
On average, approximately US$ 6 billion must be repaid each year. We do not have that kind of money, which is why we were granted relief from 2022 to 2027. These issues must be resolved, and the economic growth rate must be adjusted. Labour participation, cost-reflective policies, and electricity bill policies need to be adopted. Once the economy is capable of servicing its debt, an average of US$ 3 billion will need to be repaid annually by 2042. If we continue under the current system, we would need to pay US$ 6 billion.
Control laws
The debt restructuring plan has been designed to reduce this burden to US$ 3 billion. We have established credit control laws to prevent unnecessary borrowing. Loans cannot be taken at will; these measures were implemented to avoid economic collapse. There are countries where such a collapse has occurred, such as Ghana, Afghanistan, Mexico, and Russia. Some of these countries have yet to recover. If we attempt to repay as we owe, a crisis will ensue.
To prevent such a crisis, we have shifted towards an export-oriented economy. Steps have been taken to increase domestic production and investment. The Export Development Board has been abolished, and the Board of Investment has been replaced with five institutions that can provide unified support.
The four institutions established to implement this program are the Sri Lanka Economic Commission, Sri Lanka Investment Zones and International Trade Bureau, National Productivity Commission, and the Sri Lanka Institute of Economics and International Trade. These institutions were created to attract foreign direct investment, following the example of countries like Singapore, which received US$ 140 billion in foreign investment last year, and neighbouring India, which attracted US$ 70 billion.
Vietnam received US$ 28 billion, and Thailand US$ 20 billion, while our country received only US$ 1 billion. We need a push to escape the middle-income trap, which is why this program was developed. A dedicated office has been established for Sri Lanka Investment Zones and International Trade. These institutions are designed to attract foreign investments by bringing in experts from relevant fields.
Regarding the possibility of changing these economic policies, it is true that anything can be changed if necessary, just as it was in Bangladesh. In this world, change is inevitable, but any Government attempting such change would only last two weeks or a month at most. It is important to understand that the interest rate is not determined by politicians; it is influenced by the monetary ratio and the structure of international trade. Deviating from these global norms and refusing to comply with international agreements would result in the country’s ruin, as well as the downfall of the people.
When it comes to changing policies, certain so-called economists of the Opposition who claim to have signed agreements act as though they haven’t even managed a cigar boutique. Can policies be changed just because a new Government comes into power? Commitments have been made to other countries, and the International Monetary Fund has established credibility regarding Sri Lanka. If that credibility is questioned, all of this progress will be undone.
Under the restructuring of institutions, those with experience, ability, and talent will be better equipped to adapt to other institutions in the future. In some countries, people with expertise are used to implement strategic economic changes. In certain areas, we lack the necessary knowledge and experience. Therefore, none of our country’s professors or financial experts could save the country from the debt crisis. This is why we have sought the expertise of specialised companies like Lazard in France. We had no choice but to do this because we lacked the necessary expertise.
Official channels
Minister Manusha Nanayakkara travelled the world, offering incentives to those who send money through official channels, which led to an increase in foreign remittances to Sri Lanka. When some individuals publicly discouraged sending money, arguing that the country should not be supported, others stepped up for the nation’s sake. Who can argue against sending money when people are dying in hospitals due to a lack of medicine?
Some individuals did just that. For example, the Road Development Authority received US$ 500 million from the World Bank. When the country ran out of oil and gas, we allocated US$ 300 million from that amount to address the crisis. That is how we managed to save the country. We also engaged in discussions with travel companies, and today they come to Sri Lanka without fear. Minister Manusha Nanayakkara played a crucial role in rescuing the country from that situation. I believe they are the ones who sacrificed their positions for the greater good. It is vital to make the right decisions for the country. As politicians, we appreciate their service and respect the court’s decision.
Other parties may propose different economic systems. However, when preparing the 2025 Budget, it is essential to consider factors such as government employee salaries, pension requirements, loan interest payments, health expenditures, and tax revenue from the previous year.
The challenge is to identify sources of non-tax revenue. This is why we have enshrined these policies into law and submitted them to Parliament. These policies cannot be easily changed. The balance of payments must show a surplus each year. Achieving this is not as simple as it sounds; the statistics must be reflected in the numbers.
Translated by Jonathan Frank
