The Hon. Wijesiri Basnayake

¶ 01 Hon. Presiding Member, thank you for the opportunity to join the debate on international sovereign bond restructuring.

¶ 02 We often say Piduruthalagala is Sri Lanka’s highest mountain, but truly, the highest mountain is our debt mountain. Our total debt now exceeds USD 100 billion: domestic over USD 57 billion and external over USD 43 billion, of which ISBs are a little over USD 14 billion.

¶ 03 Why do countries borrow? To develop infrastructure, manage economic cycles, resolve crises, improve social welfare, expand industry and create jobs. But in Sri Lanka, much borrowing was to cover budget deficits and to repay old debt with new debt—this is the tragedy.

¶ 04 Since Independence in 1948, countries once behind us—like South Korea and Singapore—have transformed into major economies. India, independent in 1947, is now the world’s sixth largest economy aiming to be third by 2030. Where are we? We lead among the world’s poor states and in corruption indices, and rank low on the Happiness Index.

¶ 05 Many governments went to the IMF; the last Government too, under Ranil Wickremesinghe, signed an agreement—not designed by the NPP but imposed on us. In April 2022, Sri Lanka declared bankruptcy without proper process and without even informing Parliament, pushing people into a great social tragedy due to wrong economic management by those who ruled for years—some of whom still sit here. They must take responsibility.

¶ 06 Given where we are in the IMF and debt restructuring programme, it is not practical to quit. We must manage it properly. Our manifesto “A Prosperous Country and a Beautiful Life” clearly states we will base our path on macroeconomic stabilization—stabilizing the exchange rate, interest rates, and increasing reserves. The Staff-level Agreement was concluded swiftly by the new Government; debt restructuring progressed, and over 98 per cent of creditors accepted the offer, as the Acting Finance Minister explained.

¶ 07 This shows rising confidence among domestic and foreign investors. The dollar that was Rs. 320 has stabilized around Rs. 280-290. Interest rates have fallen into single digits. Reserves are improving. The stock market has reached record highs, with the All Share Price Index around 14,500 yesterday. Inflation has turned negative—deflationary—conditions.

¶ 08 As a result, we have increased fertilizer subsidies, expanded Aswesuma benefits, extended diesel subsidies to fishermen leading to a 68 per cent production increase, and supported exporters with lower costs, improving competitiveness.

¶ 09 To the Opposition: the IMF agreement was not signed by the NPP; it predates us. Yet, as a Government elected by the people, we are continuing macro stabilization per our manifesto to lift our people’s lives, and to make Sri Lanka a strong, prosperous and clean nation in Asia. Thank you.