The Hon. Kabir Hashim

¶ 01 Thank you, Hon. Presiding Member.

¶ 02 Globally, many countries are trapped in debt crises. Sri Lanka is one. We went bankrupt in 2022. But I see President Anura Kumara Dissanayake and the NPP Government as fortunate. Why? Because when the NPP took over in late 2024, there was a big difference from 2022. In 2022, foreign reserves had fallen below zero; by late 2024, when this Government took office, reserves had risen to USD 6.1 billion.

¶ 03 Inflation in 2022 was over 70%; food inflation nearly 98%. By late 2024, when you took office, inflation had declined to 2.5%.

¶ 04 You are fortunate. State revenue as a share of GDP was 7% in 2022; by the time you took office it had exceeded 12.5%.

¶ 05 Interest rates were 36% in 2022; by late 2024, when you assumed power, they were around 10%.

¶ 06 So every macro indicator had turned positive. But to make them positive a large section of society made sacrifices and bore pain. We must recognize this changed ground reality.

¶ 07 Who sacrificed? The poorest—poverty rose to 45% after 2022; many households began skipping meals. The hidden poor—the lower middle—state workers, private executives, van-hire costs, utilities, fuel, gas, and interest rates rose; they struggled.

¶ 08 Another group: SMEs. Their enterprises collapsed—NPLs rose; more were dragged to parate; interest hit 36%; no access to credit; input prices rose; markets vanished. The entire informal and private sectors bore sacrifices to turn these indicators around.

¶ 09 The JVP promised to equalize these asymmetries—shift the burden from ordinary people and distribute it fairly to the privileged and powerful; to reform the IMF deal and debt restructuring; to change the growth model; to break mafias and end corruption. You got the mandate for that. But does this Budget invite those ordinary people who sacrificed? You have raised some allocations, within limits—but is it enough to amount to a system change?

¶ 10 Under the Ministry of Finance rest the Central Bank and Treasury—key to debt restructuring. Many international economists now say this is the worst debt crisis in history; developing countries have USD 29 trillion of debt; one-third of world population (3.3 billion) live in such countries. Many pay more in annual interest than on education and health. We have not climbed out; much more remains.

¶ 11 Many experts call global financial architecture dysfunctional. UN Secretary-General Antonio Guterres said it is “morally bankrupt.” On 11 February 2025, a special UNHRC session tied debt restructuring to human rights and SDGs. In this context—where the system is seen as unfair to the Global South—why did President Anura and the NPP agree wholesale to the Ranil Wickremesinghe debt model without seeking improvements? With better negotiation we might have secured higher haircuts and lower payments. But you discussed nothing; you signed where Ranil signed. I think that cost us.

¶ 12 We begin repayments in 2028. This year we still have heavy outflows. From the Central Bank’s External Resources data: reserves are USD 6.1b; the Asian Clearing Union arrears since 2022 were converted into a Reserve Bank of India swap in Oct 2023; we must now pay USD 75m monthly—USD 900m this year—from reserves.

¶ 13 Additionally, about USD 200m to bilateral creditors this year, and about USD 800m accrued interest on commercial debt post-restructuring—about USD 1 billion combined. Multilaterals (ADB, World Bank, OPEC) about USD 1.1b; IMF interest about USD 300m. Total around USD 3.3b this year. Usable reserves, excluding the USD 1b PBoC swap, are about USD 5.1b. If we spend USD 3.3b, we have USD 1.8b left. If we allocate USD 1.5b for vehicle imports, reserves risk falling to near zero by year-end—unless inflows rise. What is the plan to raise export and dollar income in 2025–26, when external payments rise and principal resumes in 2028? The Budget is silent.

¶ 14 In our SJB “Blueprint” led by Hon. Harsha de Silva, we detailed integrating into global value chains, scaling intermediate goods, and investment attraction. We had a plan to grow dollar inflows. Without that, we sink deeper and cannot service debt.

¶ 15 Your Budget set a USD 19b export target—a 17% jump. How? There is no practical stimulus or roadmap. For example, Rs. 400b for highways; only Rs. 8b for industrial development; Rs. 2b for investment promotion. How does that spur exports? Are we building roads or building exports?

¶ 16 We proposed bringing SMEs into export markets. 85% of registered businesses are SMEs; around a million establishments; contribute 52% of GDP and over 50% of jobs. After 2022, they faced 36% interest, high inputs, no markets; no one offered proper NPL or CRIB relief. We appealed for support under Ranil’s Government; an ADB programme was arranged with Sajith Premadasa’s intervention. But this Budget gives no meaningful stimulus. Last year Rs. 20b was allocated to SMEs; you also allocate the same, but banks are not disbursing; it cycles back to Treasury.

¶ 17 Under IMF guidance, Rs. 450b was set aside in 2024 to recapitalize banks. Banks posted super profits in 2024; CARs exceed Basel III; crisis bonds gave them huge gains; they earn Rs. 510 billion annually just from Treasury interest. Yet we freed Rs. 450b for them. If you had the will, you could have negotiated to redirect unused recap funds this year to an SME revival window. That is system change. But you did not consider it. How will you lift CRIB-listed SMEs? You should have said how you will legislate for modern bankruptcy and replace blunt parate execution. Bring a contemporary bankruptcy law; announce it in the Budget. You did not.

¶ 18 Only about 300,000 of 1 million SMEs are linked to exports. In China, 40% of exports are from SMEs; across Asia, 30%; in Sri Lanka only around 5%. We planned to connect our SMEs to global value chains. You promised a system change; now with full Executive and Legislative power, you had the best chance to present your economic model in the Budget. Instead, you are taking an ultra–neoliberal path we rejected then and reject now. In the Second Reading reply, you avoided answering substantive questions, opting to lecture on Opposition conduct—like unruly undergrads silencing others’ theses.

¶ 19 A social stratum believed in the JVP—youth, professionals, public and private workers, executives, SMEs; also sections of big business and chambers. You won two-thirds by both groups’ support. But now, judging by this Budget, you appear to govern for a privileged minority—the mafia and a favored business community. This is not empty rhetoric; look at policy. The tax burden remains lopsided. In 2024, direct taxes were about 28% and indirect 72%. Under President Anura’s first Budget, direct is about 25% and indirect 75%—worsening regressivity. You rely more on VAT collections than broadening direct taxes and enforcing equity. You promised to exempt food from VAT; yet food remains taxed in many forms. Meanwhile, IRD’s RAMIS still fails; where is the concrete plan to fix it and genuinely expand the net? Yesterday Harsha de Silva showed casinos still have no regulator; then how do you collect their dues? Cigarette taxes, high-earner compliance, illicit traders—all under-collected. Many high-earning professionals—tuition masters, doctors in private practice, lawyers—earn millions but pay little to nothing. We hoped for equity; instead you shifted to serve another class.

¶ 20 It was the economic crisis that brought the JVP to power. You yourselves said the journey is on a rope bridge. For four months you crossed Ranil Wickremesinghe’s rope bridge, and climbed ashore; but you left your base—the cadres and voters—dangling on the bridge. Back then you promised shirts and trousers; now I see you all in suit-and-tie while your base stands stripped on the rope bridge. They were not invited into this Budget.

¶ 21 Finally, a couplet from Kaladasaawa by Pathum S. Agampodi, sung by Kasun Kalhara, suits today’s rulers:

¶ 22 “When the wage climbs high, remember the step below— Write, across your chest, the names of those bitten by your polished teeth.”

¶ 23 And:

¶ 24 “No matter how mighty the tusker, Respect the ant— For even a mosquito can make a goddess scratch her skin.”

¶ 25 Remember these, and you will not stray. We in Opposition are doing our duty—speaking for those you left out. We hope you will respond.

¶ 26 Thank you.