The Hon. Nimal Palihena

¶ 01 Hon. Deputy Chairperson of Committees, in this Debate on international sovereign bond restructuring, I observe one key point. Especially from the Opposition’s side, many want to play doctor and prescribe medicine without ever acknowledging the pathogen. Since 1965, successive governments have repeatedly gone to the IMF — 16 times up to the recent period, with the latest arrangement amounting to USD 2.92 billion. Why? Because the open economy, which they still hail as a victory, drove us from a self-reliant production economy into a consumption economy, weakening domestic production. Along with wrong economic policies and corrupt politics, we repeatedly ran deficits, widened the trade gap and increased external borrowing, necessitating further borrowing to repay old borrowings.

¶ 02 A critical point: On 12 April 2022, the country declared default. Thereafter, access to commercial borrowing and multilateral support became constrained. The only route left was the IMF.

¶ 03 We openly discussed our policies with the people. We stated what we would do under our Government. Given the situation and existing agreements, we have proceeded. If all had been done properly before, there would have been space to rebuild external confidence. That did not happen because anti-corruption and governance reforms under previous IMF programmes remained mere words.

¶ 04 However, immediately after the Presidential election on 21 September 2024, Japan reactivated 11 previously suspended projects, and India announced a write-off of USD 20 million previously provided as aid. These demonstrate renewed international confidence after the electoral outcome. Therefore, regardless of how the IMF agreement is discussed, our Government’s actions have established domestic and international confidence to support restructuring, manage future amortizations and interest, strengthen the productive economy, and attract investment.

¶ 05 The Opposition said the 5 per cent growth in the last quarter was not due to our Government. But who caused the years of destruction? Certain groups sitting in the Opposition today must answer for 2015–2019 and beyond. We tell the people: under the mandate you gave us, we will keep implementing our programme to build a prosperous country. In future, we may again issue sovereign bonds when due, but not at exorbitant rates; we will do so fairly and advantageously for the country, strengthening debt management. With our renewed international relations, we can do this effectively. Thank you.