Marikkar’s broadside on RW’s politically motivated debt restructuring

SJB MP S.M. Marikkar addressing the media yesterday

• Reveals when President Ranil Wickremesinghe took office total debt was $ 83 b but has now increased to $ 100.2 b
• Claims Sri Lanka requested 28% reduction in face value from commercial creditors, but they have agreed to only 7% reduction
• Emphasises need for program to increase dollar income through boosting exports and attracting foreign direct investment
• Proposes transforming loss-making public institutions into profitable entities through public-private partnerships

Samagi Jana Balawegaya (SJB) MP S.M. Marikkar yesterday criticised the Government for attempting to present the restructuring of $ 10 billion out of Sri Lanka’s whopping $ 100 billion debt as good news.

Addressing a press conference in Colombo, Marikkar pointed out that according to the Central Bank, Sri Lanka’s debt as of March 2024 stands at $ 100.2 billion. 

“Of this total, $ 57.3 billion consists of local loans. Foreign loans amount to $ 37 billion. Additionally, the Government has borrowed $ 5.9 billion from Government agencies, making the total foreign debt $ 42.9 billion. Out of this, bilateral debt accounts for $ 10.6 billion,” he said.

“The Government has restructured $ 4.2 billion of debt with the Paris Club. An additional $ 6.4 billion has been borrowed from bilateral countries outside the Paris Club, of which $ 5.8 billion has been restructured. In total, $ 10 billion of foreign loans have been restructured. This represents 23.3% of the $ 42.9 billion in foreign debt,” he noted.

The MP stated that in a country with $ 100 billion in debt, restructuring $ 10 billion cannot be considered good news. He pointed out that when President Ranil Wickremesinghe took office, the country’s debt was $ 83 billion, but it has now increased to $ 100.2 billion.

The MP revealed that the Government’s proposal to restructure the commercial debt amounting to $ 14.7 billion is flawed. “Sri Lanka has requested a 28% reduction in face value from commercial creditors, but they have not agreed to this. Instead, the commercial creditors have reportedly agreed to only a 7% reduction,” he revealed. 

The MP said that Sri Lanka presented the proposal to commercial creditors based on rupee income rather than dollar income. 

According to Marikkar, the people of the country will not benefit from debt restructuring. He said that without proper discussion, debt restructuring driven by Ranil Wickremesinghe’s Presidential election campaigns and his eagerness to confirm his candidacy will not bring any advantages to the people.

The MP emphasised that mere rhetoric or burdening the people with taxes alone cannot resolve the country’s debt issues.

Marikkar emphasised that a program should be implemented to increase dollar income. He noted that exports are currently worth $ 12 billion, which is insufficient to sustain the country’s economy. To increase dollar income, the country should focus on boosting exports and attracting foreign direct investment, he urged. 

Marikkar emphasised that selling state resources alone cannot rescue the country from its economic challenges. Instead, he advocated for a robust program focused on increasing infrastructure projects and exports. He proposed forming a skilled team with a clear plan and vision, noting that only Samagi Jana Balawegaya possesses such a capable team. Marikkar suggested transforming loss-making public institutions into profitable entities through public-private partnerships. This approach, he argued, would prevent burdening the public while sustaining these institutions effectively.