SL requests three-year moratorium from India

• PM says moratorium on all loan repayments asked for three years 
• Hopeful that if India agrees, other countries will also oblige 
• Blames former Govt. for economic disarray 
• Says most Indian projects planned by former Govt. stopped, Mattala also out

Prime Minister Mahinda Rajapaksa and Indian President Ram Nath Kovind greet each other during their meeting yesterday

The Government has requested a three-year moratorium on all loan repayments from India in order to revive the economy, Prime Minister Mahinda Rajapaksa has said, expressing optimism that if India agrees, other countries might also follow suit. 

Speaking to Indian publication The Hindu on the sidelines of his visit to India, which is the first State visit undertaken by Prime Minister Rajapaksa since his appointment, he acknowledged that the debt repayments remained a concern for Sri Lanka.

“Yes, it is a worry. This is something we discussed with the Indian Government as well, and have asked if we could get a moratorium on all loan repayments for three years, until we can revive the economy. If the Indian Government takes this step, then other governments might agree to do the same thing, including China. The previous Government took so many loans, they beggared the economy, and it is a mess. It all depends on the stand India takes,” he said. 

When asked how the Government might tackle $ 4.8 billion in repayments for this year, Rajapaksa insisted that Sri Lanka would meet its obligations but declined to give any specifics on how the State will go about it. “We have to do it, and we will manage somehow. We don’t want to default on our debt no matter what happens,” he responded. 

There were few details given on how India and Sri Lanka may use the $ 400 million line of credit offered by Prime Minister Narendra Modi. Ahead of the State visit, the Government had announced that they may firm-up plans during the engagement.

“We did speak about several agreements, and we have agreed to some of the projects that (the Indian side) were interested in. It was a fruitful and successful meeting for both sides, I would say. The housing project is something that is a priority area for us, and we asked for more funding for that. We have a new initiative to cover the whole country, every village, and we would like to get some support for that. Apart from housing, there were several projects we discussed.”

He also said that most of the projects agreed on by the former Government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe would not go ahead. These include multiple infrastructure projects in Trincomalee that were discussed in 2017. He also said the current Government would stop talks started by the previous Government to hand over the Mattala Airport to India. 

“We didn’t discussed the Trinco projects, but we did talks about the Eastern Terminal (in Colombo), which India and Japan are jointly investing in, and the LNG terminal. Whatever was signed (in 2017) was not even pursued by the last Government. President (Sirisena) actually rejected all the projects the PM (Wickremesinghe) had signed. We are not responsible for those projects. The Mattala (airport) project is also out. Our Government has a firm policy on not allowing any national resources to be given to foreign control.” 

When questioned about his plans for after the General Elections, provided the Sri Lanka Podujana Peramuna (SLPP) wins with a two-thirds majority, Rajapaksa reiterated that the primary focus would be on dismantling the 19th Amendment. 

“First of all, we have to get rid of the 19th Amendment. Then we will think about how we will move forward. (Former Law Minister) G.L. Peiris is already studying it, and we will take into consideration opinions on what to do. 

“At the moment, neither the President nor the Parliament has clear powers. So we do have to decide on the division of power. The majority of voters in Sri Lanka voted for President Gotabaya, and that means people want him to have some control over the country’s development and governance, and we must respect that.”

He also reassured that a possible reduction in Executive powers, should plans work out, will not lead to a rift between the President and himself.

“The way the present Constitution is structured, and the confusion with the 19th Amendment, only two brothers like Gota and I can handle this. Otherwise no President and PM will ever agree on this issue.”