The Hon. (Dr.) Harsha de Silva

¶ 01 Thank you very much, Sir.

¶ 02 Hon. Deputy Speaker, the Motion today seeks the support of both Government and Opposition to steer the economy. We agree and have supported stabilization in the last Parliament and will do so now.

¶ 03 However, the Government MPs who moved and seconded the Motion said those who paid the heaviest price—the working people—were neither recognized nor appreciated, and that if there is a recovery, they must be considered. The Hon. Member who seconded also said the Government should get credit for debt restructuring. All of you know there was a clear opportunity to recognize and appreciate the working people: in the domestic debt optimization (DDO) exercise affecting 2.9 million EPF members and about 20 million accounts. You could have introduced a clawback clause—just as in the external and bilateral deals—so that if future conditions improve (as is projected with the haircut on external debt effectively declining from 27 percent towards around 15 percent by 2028), the domestic savers would share in the upside. You agreed to clawback-like provisions for bilateral creditors (China, India, etc.) under comparability of treatment, allowing adjustment if Sri Lanka’s situation improves. But you did not introduce any such clause for domestic creditors. That was the key moment to recognize the working people; no action was taken. We reiterate: to truly appreciate and recognize them, include a clawback mechanism in domestic debt arrangements.

¶ 04 The Motion also blames an “open economy since 1977” for the collapse. In response to a question by Hon. Ravi Karunanayake, Prof. Anil Jayantha stated the average growth over 30 years was about 4.2 percent—hardly a picture of structural failure. When asked about the next 15 years, he said they use an autoregressive distributed lag (ARDL) model for projections. The essence of ARDL is that the past is linked to the future—“autoregressive” means current values depend on past values; with “distributed lags” capturing influences of other explanatory variables over time. If the model that uses historical dynamics is valid, then it is inconsistent to wholly vilify the previous economic framework while relying on its statistical dynamics to forecast the future. The issue is not the concept of openness per se but policy errors, governance failures, fiscal indiscipline, and credibility shocks.