- People do not need criticism sans solutions
- Settling loans or not, government and critics in Opposition should immediately present their solutions in how they would manage the national economy in coming out of this chaos.
All media these days are flooded with criticisms, stories and interpretations on the imminent danger in forex reserves going empty. All in Opposition without divisions claim the “government has failed”.
Meanwhile, economists who sound independent are proposing to the government to stop paying loan instalments and to engage immediately in negotiating restructuring of loans.
In how I understand their explanations, there is a valid rationale. Rating of countries by “Fitch” and “Moody’s” are not decided on whether they settle loans on time or not. But on the ability to settle loans in the future. Therefore, settling instalments now would not help “Fitch” and “Moody’s” rank us better. Nor would it help us in securing international loans.
Using forex reserves to pay loans would only reduce reserves and lead to further downgrading us in international rankings. Therefore, instead of using forex reserves to settle loans, saving them to import most essential consumer goods, fuel, LPG, etc., without allowing market scarcities, negotiating restructuring of loans, is a more timely proposal.
While there is such an alternate, immediate option, CBSL Governor who adamantly claims he is settling loans on time is said to be paying off holders of matured ISB in the secondary market. Thus, there is justifiable suspicion of underhand deals. That needs investigations and a different platform for discussion.
I do not know whether ISB payments can be rescheduled. But other bi-lateral loans can certainly be negotiated for restructuring.
A few days ago, President Gotabhaya Rajapaksa made an appeal to the Chinese government for such restructuring. I think PM Mahinda Rajapaksa also made such an appeal to India sometime back.
On 12 January last, India decided to extend the USD 900 million loan facility to Sri Lanka and included a USD 500 million forex swap too. That in effect is restructuring of the loan.
Fact remains, even if loan payments are stalled to negotiate restructuring or payments continue as arrogantly insisted by Governor CBSL, our socio-economic crisis would remain unabated.
What would remain as a very serious issue is, how we could climb out of this socio-economic crisis. That cannot be reduced to mere bailing out of the forex crisis.
That is also not about negotiating a soft-loan with restructuring from the IMF only. Yet, there is an advantage to the country in reaching agreement with the IMF. Negotiating with IMF would require the government to provide them with a financial management plan, they would monitor.
That by itself is not enough. A financial management plan per se is not what we need. We need a comprehensive plan for national development that can lift us out of this socio-economic chaos.
It has to be a national development plan that includes a community healthcare plan to reduce the current COVID-19 positive numbers of 550 per day to less than 100 per day.
It is now confirmed beyond doubt, this government has no such programme other than the egoistic and stubborn claims by CBSL Governor that loans will be settled on time.
People also have no necessity of any in Opposition who provides nothing more than empty exhibitionist rhetoric and protests in media shows. Instead, people need today a very comprehensive programme that answers the present socio-economic crisis. A futuristic programme.
This therefore is to say, stop being a nuisance to people with empty criticisms and protests meant for the media and instead, do please present your solution(s) to this socio-economic crisis immediately including to that of rapidly depleting forex.
Please note, at a moment like this, it is the uncompromising responsibility of a politically committed Opposition.
Kusal Perera
Political essayist and journalist
