ECONOMYNEXT — Both opposition leader Sajith Premadasa and leftist National People’s Power (NPP) leader Anura Kumara Dissanayake have downplayed the significance of Sri Lanka’s debt deferment agreement with bilateral creditors, pointing instead to negotiations still ongoing with commercial creditors.
Premadasa speaking at an event accused the government of telling “earth-shattering lies”.
“The latest gamble is fooling the people. Earth shattering lies are being told. If you look at this data, no one will accept that our country has come out of bankruptcy. They’re trying to show just the bilateral agreement and claim that we have come out of bankruptcy. There are many types of debt. There has been no definite agreement reached with creditors on international sovereign bonds (ISBs),” he said.
Premadasa also claimed that the government has been hiding information and data relevant to debt restructuring.
“I thought the worlds best performers were cinema actors. The leaders have now become better actors, better even than Amithab Bachchan. They perform so beautifully, because people don’t have access to information. There is some information and data that is hidden even from us,” he said, adding that the “loss” to the Employees’ Provident Fund (EPF) had yet to be revealed to the public.
NPP leader Dissanayake, meanwhile, said at an event in Kandy that the agreement with bilateral creditors was just one part of Sri Lanka’s external debt restructuring efforts.
“The agreement on restructuring bilateral debt is just step of the journey so far. It’s just one part of it. How is it a new message? There is a more serious step remaining: ISBs. There’s about 12.5 billion US dollars that has to be restructured, which has so far been a failure. All of that 12.5 billion was taken during [President Ranil Wickremesinghe’s] 2015-2019 government,” said Dissanayake.
“I remember when he took those loans then he said that by 2020 the country would be completely free of debt. But what is he saying today? That our letters of credit (LCs) are once again being accepted. We have gained international acceptance. Who lost that international acceptance? Who created the crisis that led to our LCs not being accepted? They are the architects of this crisis,” he claimed.
President Wickremesinghe in a televised address to the nation announced on Wednesday June 26 that had signed bilateral debt restructuring agreements with the Paris Club, India and China. With these agreements, he said, Sri Lanka will be able to defer all bilateral loan installment payments until 2028 and will also have the opportunity to repay all the loans on concessional terms, with an extended period until 2043.
Wickremesinghe also referred to the ISBs.
“In 2023, we successfully completed the restructuring of domestic debt. Now, we have also successfully concluded the bilateral debt restructuring with foreign countries. Our next objective is to reach an agreement with commercial creditors, which includes International Sovereign Bond (ISB) holders. By continuing on our current path, we are confident that we can achieve this agreement, and discussions are on-going,” he said. (Colombo/Jun27/2024)