Sunday Sep 22, 2024
Sunday Sep 22, 2024
Monday, 23 June 2014 00:11 - - {{hitsCtrl.values.hits}}
Criticising the “false information” provided in the Annual Report of the Ministry of Finance, Dr. de Silva said: “The Government says our external debt is $ 22,284 million, which is incorrect due to exclusion of the loans taken by CBSL, all State banks, SriLankan Airlines, CPC, CEB and UDA. Who are they trying to fool? We are fooling nobody but ourselves. We are falling into a false sense of security. According to the Government, foreign debt stands at 35% compared to GNI. The reality is 61%. Let’s take off the loan obtained by private banks but still the debt stands at 50%-55%. When we presented this argument, CBSL issued a counter notice in English. It says the Public Debt Department (PDD) highlighted the improvements in the Government’s external debt position. Do they think we are fools?” he said.
Explaining the State loans, MP Dr. de Silva said: “I have a copy of the award International Centre for Resettlements of Investment Disputes issued for Deutsche Bank AG Vs. Democratic Socialist Republic of Sri Lanka, a document disclosing the facts about one of the three hedging contracts. This is nothing more than a judgment fining Sri Lanka for $ 60.3 million and charging legal fee of $ 7.9 million. On top of this they have charged LIBOR + 1.12% interest rate to compensate the delayed payments. One person can hold that the Government is asked to pay this but the issue was with the CPC.”
“Let’s take SriLankan Airlines, which incurred a loss of Rs. 28,827 million during the financial year 2013/14. Compared to the fertiliser subsidy, which receives Rs.19,700 million, the Samurdhi program allocated with Rs.15,250 million, school uniforms program receiving Rs. 2,300 million and the school lunch program allocated Rs. 3,000 million, the loss incurred by SriLankan Airlines is massive. This can be compared differently where it is more than adding the Rs. 15,000 million profit of the Bank of Ceylon and the Rs. 10,000 million profit of People’s Bank. According to a press communiqué Bloomberg issued on 17 June, SriLankan Airlines is trying for a $ 175 million loan from Standard Chartered Bank. In March this year SriLankan Airlines obtained two loans worth $ 150 million and $ 50 million. The plans to obtain another loan worth $ 175 are also revealed,” he added.
“The main reason for me to highlight these questions is to show who has to pay the debt at the end of the day. If you take the hedging award, the Sri Lankan Government was ordered to pay the fine but not Ceylon Petroleum Corporation. Similarly the loans SriLankan Airlines took will fall on the Sri Lankan Government, which none other than the general public repay. The President promised a loan worth $ 750 to the Urban Development Authority. Remember, the public of this country will have to pay this loan also. Recently National Savings Bank took a loan of $ 750, which was given to the Government for different projects including to build the Lotus Tower, with a rotating restaurant.
“There is a debt issue in this country. According to a CBSL issued press release dated 13 May, Sri Lanka has continued to improve its external debt sustainability indicators, as computed in accordance with the Manual of Effective Debt Management of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). Doing a comparison, CBSL is trying to show Sri Lanka is a country ranked ‘less indebted’.
“Former Deputy Governor of the Central Bank W.A. Wijewardena also writing to a newspaper shows that Sri Lanka is not a less indebted country but highly in debt. According to the UNECAP handbook, the external debt is not only the Government debt. The large loans we take beyond Treasury involvement, similar to SriLankan Airlines, finally falls on the Government to repay. All State entities, be it non-marketing, profit-making or any bank or establishment, should be considered as Government debt according to this handbook of UNESCAP,” he added.
