G.L. charges DDR will create crisis of unprecedented magnitude

• Recalls CBSL Governor and State Minister of Finance assured domestic debt will not be part of restructuring process which appears to have changed now
• Claims decision will impact ordinary people 
• Says effect on EPF and ETF will be most critical aspect of domestic debt restructuring process
• Stresses working people will have their retirement funds shaved off which will be an unimaginable disaster

Prof. G.L. Peiris

Freedom People’s Congress member Prof. G.L. Peiris yesterday charged that domestic debt restructuring (DDR) will be a national crime due to the many adverse effects it will have on the people. 

The MP said the statements made by the Government on the IMF conditions have now been proven to be half-truths or entirely false. 

“The Parliament has made repeated requests for the contents of the staff-level agreement but received no response,” he said. The MP said for example previously the Governor of the Central Bank and the State Minister of Finance said the restructuring process will not include domestic debt. “In other words, it was said the domestic debate would be removed from the ambit of the entire procedure relating to the restructuring of Sri Lanka’s debt. This was asserted with great clarity,” he said. The MP said however now they are claiming local debt restructuring which will in fact be an integral part and parcel of the exercise.

The MP said this decision will impact the ordinary people of the country. “They will be heavily affected by the restructuring of the rupee-denominated debt which is huge,” he said. According to the MP, the domestic debt currently is around Rs. 12 trillion. “It is Rs. 4 billion in Treasury bills and Rs. 8 billion in interest rate bonds,” he revealed.

“Now, this process is going to start with the Treasury bills that in themselves will be hugely damaging to the people of our country. But the most critical aspect of this is the Employee’s Provident Fund and the Employees Trust Fund. Now, these contain monies belonging to the working people of our country. These are the resources on which they hope to live after retirement. If this restructuring process is extended to those the inevitable result will be that about one-third of the resources will be shaved off. That will be an unimaginable disaster. It is going to affect the lifestyle of these people. They will not have money for basic necessities,” he said. “It will be a crisis of unprecedented magnitude. Inevitably it will lead to a strong public reaction,” he added.