The Hon. (Ms.) Lakmali Hemachandra, Attorney-at-Law

¶ 01 Thank you, Hon. Deputy Chairperson of Committees. In this Debate on international debt restructuring, several points were discussed. I particularly wish to draw attention to a statement by Hon. Harsha de Silva. He claims the bondholders have accepted the ISB deal 100 per cent because it is advantageous for them. At the same time, this morning the Leader of the Opposition said he would renegotiate; that we should again talk and go forward with the DSA as the Government proposed.

¶ 02 As someone who has closely followed this process, I am surprised by some statements. Acting Minister of Finance Hon. Harshana Suriyapperuma explained clearly how this restructuring is done and that on 19 September 2024, the Government announced it had reached a preliminary agreement with international bondholders. On that day Hon. Harsha de Silva wrote on his account:

¶ 03 “Looks like Sri Lanka ISB deal is done to be announced anytime. If so, that will end JVP/NPP’s key (misleading) promise of an alternate DSA to renegotiate with IMF and bond holders. If story true, we will be ready to discuss (as new gov) with bond holders on issuing new bonds.”

¶ 04 When he thought he would be the next Finance Minister, this is what he said on 19 September 2024. What is he saying today? Today he speaks with great sorrow about workers and farmers. Before the election, thinking he would be Finance Minister, he took that position. With a lot of clarity, Hon. Chairperson, we have said this was a difficult choice for us, not an easy one. We are going ahead because we see no other option to move forward. There was no choice when the new Government came into power; that is the only reason we proceed.

¶ 05 Hon. Nilanthi Kotahachchi stated that on 12 April 2022 Sri Lanka declared bankruptcy — default — and suspended external debt payments. That was not done by an NPP Government. The prior economic policies that led to bankruptcy were not implemented by an NPP Government.

¶ 06 In truth, developing countries are reluctant to declare bankruptcy or say they cannot pay. Even countries in our region did not declare default. Why? Because debt restructuring is a difficult process. There is no international convention on debt restructuring. We are at a disadvantage. Everyone in the Global South knows this.

¶ 07 After default, we entered the restructuring process from a disadvantageous position. In any debtor-creditor relationship, the creditor has inherent advantages; that is undeniable. We did not decide to default. Our decision is to end bankruptcy and close this painful chapter in our history. Bankruptcy has deeply hurt our people; poverty has increased. Just this month alone, 600,000 electricity connections to the grid have been disconnected. People are suffering from poverty and economic pressure. There are questions about economic growth and about SMEs. Bankruptcy harms ordinary people. Therefore, we must end this chapter.

¶ 08 As the NPP Government, our choice was whether to end bankruptcy now or go for a renegotiation of the already reached agreements, seek further relief and drag discussions for another year or two, send a negative market signal and destabilize the country. The question was whether to choose policies that would avoid bankruptcy earlier; but now our decision is whether we end bankruptcy and go for growth. Our aim is to leverage the debt restructuring for economic development. While we are bankrupt, it is very hard to access financing — no one will lend to us, neither countries nor international financial institutions. So we must exit quickly. The Acting Finance Minister has clearly stated the additional interest cost of dragging this out would be about USD 1.7 billion. If we extend by another year or two, we pay even more interest. Therefore, we end it now for the people. If there is relief, we will leverage it toward growth. That is all.

¶ 09 Another point raised was that we have not tabled documents. These are public documents issued by the Ministry of Finance. All debt restructuring documents have been made public — filed at the London Stock Exchange and the Singapore Stock Exchange. Acting Minister Harshana Suriyapperuma has explained everything point by point, without any concealment.

¶ 10 On India-related proposals on power and energy, the Opposition claimed we agreed to a high-capacity power grid interconnection and a multi‑product pipeline with India. There is an official Joint Statement between India and Sri Lanka. It sets out what has been agreed, what is still under discussion, and what is under consideration — in black and white. We have agreed to commence a pilot solar power project. But the power grid interconnection is not an agreement; under paragraph 13(ii), “…the leaders agreed to continue consideration of the several proposals which are in different stages of discussion.” No final decision has been made. These matters remain under discussion between the two countries. Yet the Opposition repeats false rumours, even here. I do not understand why.

¶ 11 Finally, the Opposition shouts about workers and ordinary people. When Hon. Harsha de Silva thought he would be Finance Minister, he was ready for bond exchanges; today he shouts from the Opposition about workers. What does this mean? They are telling us: “You cannot do what you set out to do. Only what Ranil Wickremesinghe did can be done, and that is what we also intended to do; you will also have to do the same.” This is Margaret Thatcher’s “There is no alternative” ideology. The Opposition tells a government elected by workers and farmers that there is no alternative to Ranil Wickremesinghe’s policy. We say, no. There is another path. We will leverage debt restructuring and pursue a different journey, as countries like South Korea, Vietnam and India have done with the IMF while building stability. We will not accept the ideology that “There is no alternative.” There is an alternative, and we will achieve it. Thank you, Hon. Deputy Chairperson of Committees.