• Dr. Harsha de Silva claims SJB plans to grow economy over 10% hence IMF deal must make room
• Questions if Govt. may agree to any terms to push release of 3rd tranche
• Warns a second default will produce dangerous consequences

By Darshana Abayasingha

The main opposition, Samagi Jana Balawegaya (SJB) yesterday termed any measures by the Government to hurriedly legislate any agreement between the President and the IMF as undemocratic, and said the terms must be discussed with broader stakeholders. 

Briefing the media SJB MP Dr. Harsha De Silva said whilst India, China and the Paris Club have reportedly arrived at an agreement, he fears the Government may agree to any terms presented by International Sovereign Bond (ISB) holders to secure the release of the IMF’s third tranche.

“As a responsible and people-centric opposition we would welcome the release of the IMF’s third tranche as that would unlock multiple benefits to the nation. But we must not be pushed to agree to conditions that are unfair simply to suit this purpose. If we agree to unsustainable clauses and we are unable to meet interest or other payment, we may fall into default again which is a very dangerous state. So, we urge the Government not to fall into such a state and engage with parties concerned,” Dr. de Silva said.

He noted one of the primary conditions for the release of the IMF’s third tranche was progress on debt restructuring, and conditions put forth by ISB holders remains a concern. He said there is over $ 15 billion in debt from commercial borrowings and warned that should Sri Lanka accept their macro-linked bond proposal, there is a probability the face value haircut could drop to just 7% from its proposed 28%. Dr. de Silva said, should the counter proposal of the Government be implemented the figure could arrive at about 28%.

“Now the next question being asked is 28% enough? Then we hear the Government might be looking to agree to the deal at 28% without holding any discussions with broader stakeholders. It’s not fair for the President to legislate any agreements and bind future Governments to such clauses. We have thus taken this matter before the Supreme Court. We have told the IMF that an SJB Government will review some of the agreements, and develop a comprehensive program to grow the country. We cannot afford to grow at 5%, we need to grow at 10% and that is the plan and vision of the SJB,” he added. 

IMF Executive Board approves second review on SL