SJB MP Kabir Hashim 

SJB MP Dr. Harsha de Silva 

• Urges Govt. not to hide ISB mess behind that success
• Calls for deal details to be tabled before Parliament
• Good news if commercial creditors cap haircut at 20% at least; benchmark is 37%

 By Darshana Abayasingha

The main Opposition, Samagi Jana Balawegaya (SJB), said yesterday it welcomed the restructuring agreement between Government and bilateral lenders, but noted this was a result of the decades long relationship Sri Lanka enjoys with countries like India, China and Japan, and not the individual achievement of a party or person. The Party also warned the Government against using the agreement with bilateral lenders as cover to enter into unfavourable agreements with private commercial lenders.

Addressing a media briefing, SJB MP Dr. Harsha De Silva, said his party has always supported an IMF-sponsored solution, but noted it was necessary for the Government to renegotiate some of its clauses. He said the SJB has made this clear to the IMF during its engagements and there is no misunderstanding therein.

“We are a people’s party, and we welcome this deal. However, the person who wrote the President’s script said some parties previously said we must go to the IMF and are now saying we don’t need the IMF. That is not what we said. The President himself should have checked the script before reading it out. We are not a party that looks for cheap wins and are looking to criticise the deal with bilateral lenders.”

De Silva said the SJB looks forward to the deal with Bi-Lateral lenders being tabled before parliament so the finer details could be better understood. “We must ascertain how much of a grace period it entails, and if there are any interest costs attributed to that.” 

The SJB MP scoffed that the President had said they would also conclude negotiations with Commercial Creditors successfully, and questioned how the Domestic Debt Restructuring (DDR) could be termed a success?

“If anyone says DDR was done successfully that is not right. The burden was heaped only on pension funds, and that is not fair. No country has done that. We must ensure better visibility on the agreement with commercial creditors. We reiterate the SJB are completely opposed to any deal linked to macro linked bonds. The proposal was for a 28% haircut if our GDP is $ 84.2 billion in 2028, and if it grows further the cut incrementally goes down to low as 7%. Why are we agreeing to such a disadvantageous situation?” De Silva asked. 

The SJB also stated the country could only be termed creditworthy once it is again able to offer new sovereign bonds when commercial debt is restructured and verified so by independent rating agencies. The party noted Ghana recently received a haircut of 37% and that is the benchmark Sri Lanka must work with instead of agreeing to terms as low as 7%. The benefit or advantage must now go to the people, the party spokesman said.

“The President in his speech said the country has been saved, but then that it is also on a knife’s edge. So, what is the truth? If the president understands the real suffering of the people, he would have mentioned a word about it. He didn’t because he doesn’t understand poverty. There are 7 million people in poverty in Sri Lanka now. What the SJB is focused on is a socio-market economy that does not leave the people behind,” De Silva added.

SJB MP Kabir Hashim, said the haircut with ISB holders should be a minimum of 30% and requested the Government to cap the haircut at 20%, as the bondholders had previously agreed to this number. If that happens only can the Government talk about good news, he said.

 

 

Ceylon Chamber commends Govt. on reaching key milestone in EDR