ECONOMYNEXT — The leftist National People’s Power (NPP) in its election manifesto has revealed its approach to re-negotiations with the International Monetary Fund (IMF) if the party wins Sri Lanka’s upcoming presidential election.
The proposals made by the NPP with regard to IMF negotiations are as follows:
1. Discussing again with the IMF the inclusion and implementation of a stronger and more correct programme to salvage people who have been subject to poverty and vulnerability
2. Re-evaulate revenue-based fiscal consolidation proposals made by the IMF and present proposals for efficient tax administration and state expenditure management
3. Preparing an alternative debt sustainability analysis (DSA) to be used in debt evaluations as needed aimed at maintaining debt sustainability and maintaining interest rates at affordable levels
4. Rapidly conducting a comprehensive debt audit to ensure state financial transparency and government accountability and to take legal action against parties who have misused debt
5. Improve fiscal discipline and government finances to raise the credit rating of both the country and the banking system
Both the NPP and the main opposition Samagi Jana Balawegaya (SJB) have pledged to renegotiate Sri Lanka’s agreement with the IMF. However, President Ranil Wickremesinghe has said that the benchmarks, revenue and expenditure figures agreed to with the international lender cannot be changed.
At a Q&A with heads of media organisations held on Wednesday August 07, Wickremesinghe said the IMF has not changed their position on benchmarks agreed to with any country.
“We have entered an agreement with the IMF, and we have to implement it. If we implement it as we go along, there won’t be a problem for Sri Lanka,” he said.
Wickremesinghe was responding to a question about statements made by opposition parties that they would renegotiate the terms of Sri Lanka’s IMF agreement.
“Now others are coming up with various proposals, that they want to change. Then they must tell what they’re going to do. One thing about the IMF is that the benchmarks will not be changed. They have never changed it for any country,” he said.
“The benchmarks are there. For instance, you want to give something free from some place and you want to increase VAT to 25 percent. If the numbers are agreeable, they will say yes. But you can’t change the benchmarks and the revenue figures and the expenditure figures,” he said. (Colombo/Aug26/2024)