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Debt restructuring handling a temporary solution to self-inflicted wounds?

July 07, Colombo (LNW): Leader of the National Peoples Power (NPP) and Janatha Vimukthi Peramuna (JVP) Anura Kumara Dissanayake has voiced strong criticism against the government, accusing it of placing significant burdens on the Sri Lankan populace while implementing the International Monetary Fund (IMF) programme and restructuring the nation’s debt.

Whilst acknowledging the government’s success in postponing Sri Lanka’s debt repayments, Dissanayake argued that the administration was celebrating a temporary solution to problems it had caused itself.

The NPP Leader made these remarks during an address to medical professionals in the Kurunegala district, organised by the National Intellectual Organisation.

He emphasised that it would have been impossible to implement the IMF programme without restructuring Sri Lanka’s debt, adding that the government reached an agreement with the IMF and adhered to many conditions outlined in that agreement, many of which, in his words, have placed immense strain on the general public.

He further explained that for effective debt restructuring, the government had to present an acceptable balance sheet by controlling expenses and boosting income.

This, he said, was necessary to demonstrate to the international community that the country’s debt servicing capabilities would improve, thereby justifying a postponement of debt payments.

Dissanayake questioned the celebratory nature of the debt restructuring process, contrasting it with India’s recent celebration of a successful moon landing.

“In Sri Lanka, we are celebrating the postponement of debt repayments as if it were a significant victory. Agreeing to the IMF programme made debt restructuring a mandatory condition. Whilst they have indeed managed to defer debt repayment, it is not as commendable as portrayed,” he noted.

Dissanayake further critiqued the government’s handling of the situation, saying, “The government incurred debts which they refused to pay and then negotiated an extension for repayment, presenting it as an achievement.”

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