Sunday, February 5, 2023

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Sri Lanka shall not swallow ‘toxic waste’ in belief it is bitter medicine to cure Economic Crisis

Sri Lanka shall not be in a position to swallow ‘toxic waste’ in the belief that it will cure the ongoing economic crisis, said Prof. Yanis Varoufakis, former Finance Minister of Greece, responding to the much-awaited and yet beat-around-the-bush-like assistance by the International Monetary Fund (IMF) to the island nation amidst its worst recession since independence.

In a recent (23) interview with ‘Ada Derana 24’, the former Finance Minister of Greece reminisced the multi-billion dollar financial assistance provided by the IMF to the Government of Argentina twenty years ago, in what he described it as a ‘crime’ against the people of Argentina, for their actions resorted to the conversion of the profits of the Argentinian oligarchs and some corporations from the local currency to US Dollars, paving the way for a handful of oligarchs to collect the money and take them out of the country just before the nation fell.

The IMF committed the same crime five years ago in the same country, only to make a simple apology, and in the backdrop, the IMF, in reality, resorting to apology for committing a crime against a nation means nothing to them, he emphasised, warning that the IMF’s current approach towards Sri Lanka amidst its economic crisis might end up the same way and the global lender might getaway under the logic of releasing their money to the creditor instead of the people of the country itself.

There is a fundamental difference between ‘bitter medicine’ and a ‘toxic drug’ that actually kills a patient, Varoufakis said, referring to the IMF’s toxic approach towards every country whom it lent money to, and suggested that Sri Lanka shall not believe that a loan from the IMF would be the sole solution to the recession the island nation is currently facing.

For every irresponsible borrower there is an irresponsible creditor, the ex-Finance Minister of Greece went on, and in a sharp response to the western or other world powers who point their fingers at the island nation accusing it of being a nation ethically responsible of borrowing a lot of money that cannot be repaid Varoufakis stressed that creditors shall be held accountable for the predatory loans they are giving away and that money being released to characters considered to be ‘shadowy’ on behalf of the people whom they claim to represent is a wrongful conduct from their end.

Accordingly, the creditors of Sri Lanka must bear a very significant proportion of the cost of the bankruptcy of the country, Prof. Varoufakis opined, pointing out that the IMF, who always takes the side of the creditors, has to be told by the Government of Sri Lanka that the first prerequisite for any debate or discussion between the island nation and the IMF should be a very significant ‘debt haircut’ upon the issuance of a loan, where creditors have to agree that they will not get their money back, but a small proportion of the money they lent.

He added that the second prerequisite prior to any discussion pertaining to a loan would be that there will be no austerity. The IMF should be reminded that Sri Lanka is not a ‘shop‘ to browse, that the logic of reducing the debt and the budget deficit based on spending cuts at a time when the Sri Lankan domestic Private Sector is massively reducing its expenditure under the crisis’s influence to introduce Public Sector spending cuts would be madness, he noted.


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