The Hon. (Dr.) Harsha de Silva

¶ 01 Hon. Presiding Member, what I am reminded of is Walt Disney fairy tale movies like “The Little Mermaid”, “Moana”, “Pied Piper”. This sounds like one of those. Listening to this, I feel a director might make a fairy tale out of it. How did the economy change completely within weeks? Is that even possible? According to the economics I know, it cannot. So, to me, this sounds like someone’s imagination.

¶ 02 Hon. Presiding Member, this morning I raised an Order under 27(2). The Hon. Minister said he intended to table the documents. I said, not “may,” but “shall.” It was accepted. However, the Acting Minister of Finance tabled nothing. That is shameful. Therefore, I will table the document on behalf of the Government: the document the Secretary to the Ministry of Finance has presented to the world today at 12.08 p.m. I table this and request it be included in the Hansard. I also table the relevant Annex. The Government has failed to present the truth to Parliament.

¶ 03 What does the document say? It says what the Hon. Minister claimed—that about 98 per cent have eagerly accepted the proposal. Why? Why did 98 per cent accept it? The Minister even said 100 per cent on some series. Because it is such a lucrative deal. If someone offers you something you cannot refuse, why would you refuse?

¶ 04 When we negotiate, if the other party is ready to accept 100 per cent, then there is something more than what is visible. What is it that we cannot see—or that the Government does not want us to see? Why are people jumping into this? The reason is that this agreed deal on ISBs is highly advantageous to them.

¶ 05 What is that advantage? The Minister tried to explain it as a “Macro-linked Bond.” In the middle of this year, the IMF first did a Debt Sustainability Analysis (DSA). There was debate about that. What did bankruptcy mean? A country does not go bankrupt as a firm does; rather, it meant the Government could not service the debt. Our external debt was unsustainable, and credit ratings crashed; nobody wanted to lend to us.

¶ 06 Then we agreed to start repaying from 2028. But what the Acting Finance Minister presented today is not exactly what will prevail then. The document I table shows that while there is a 27 per cent face value haircut on paper, that will not hold as-is, because in the first quarter of 2028, they will measure Sri Lanka’s GDP in USD terms against the average USD GDP for 2024-2027. Based on that, from 2028 to 2038 the relief will change. If the average is USD 88.6 billion (DSA baseline), the 27 per cent haircut applies. If average GDP is USD 94 billion, the haircut is less; if USD 99 billion, less still; if USD 107 billion, it falls to 14.6 per cent.

¶ 07 Not only that, our interest increases by 1.25 percentage points from 2028 to 2038. We just got a text that GDP grew 5.5 per cent in Q3. Unfortunately, you cannot take credit for that now. Please tell us your GDP expectation for 2024. Hon. Acting Finance Minister, what is the expected GDP for this year?