The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Mr. Speaker, I thank you for the opportunity to commence today’s debate on this Vote on Account.

¶ 02 On the eve and today of approving this Vote on Account, some issues raised by Opposition Members and other matters the public should know deserve the attention of this House. Some spoke as if they had not been here in this Parliament. There were also attempts to misinterpret certain developments. Since some spoke and left, a few points must be clarified.

¶ 03 On the matter of catching thieves, some said “Go ahead and catch them.” They spoke about SriLankan Airlines — what will be done? They spoke of a rice shortage and market issues. They did not speak about why bar prices increased. Hon. Shanakkian Rajaputhiran Rasamanickam asked for the list of those who received benefits. Then there were questions about the IMF arrangements and agreements, relief to those affected by floods, wages in the state, private and plantation sectors, commodity prices, the President and allocations, and many other issues.

¶ 04 Mr. Speaker, among the discussions over these two days, we must correctly frame the IMF-related matter. The Opposition keeps trying to muddy the waters. As the National People’s Power, we had a clear position. We held discussions with the IMF after the Presidential Election, and even before that there were informal discussions.

¶ 05 But who signed agreements and arrived at understandings with the IMF and brought the country here? In April 2022, our country was declared bankrupt. Those who drove the country to that point now question us. Our mandate is to stabilize and develop the country and implement our program.

¶ 06 They tried to obstruct this path before and after the Presidential Election. However, after the election our three-member Cabinet — the smallest — held the fort until the General Election. With the people’s mandate now received, our duty is to take the country forward. The Opposition now asks, “Why did you do this and that?” We also have questions. They signed with the IMF after declaring bankruptcy, spending two and a half years in negotiations, debt restructuring — multilateral, bilateral and private (sovereign bonds) — all interdependent.

¶ 07 About 30% of domestic debt, particularly held by EPF and ETF, was subjected to treatment. We had bilateral discussions with 17 countries, reaching understandings whose next steps affect the sovereign bond market. That is why they signed just two days before the Presidential Election. Our Hon. Labour Minister explained this yesterday. After that, we want to conclude these transactions. Regarding the bilateral deals with 17 countries, when concluded, what happens? There are US$12,500 million of sovereign bonds — largely taken in 2015–2019 by the UNP government — with an average coupon of 6.98%. There were bonds of US$2,500 million matured, with about US$1,700 million in unpaid interest, totaling about US$14,200 million. Our task is to conclude this.

¶ 08 Some Members asked why the borrowing limit for the next four months has been increased by Rs. 3,000 billion. Then-President Ranil Wickremesinghe, as Finance Minister, had already increased the borrowing limit in the 2024 Budget — Rs. 7,350 billion — for sovereign bond-related needs. They had brought the transaction to the brink. We do not wish to remain stuck; we must complete it to implement our program.

¶ 09 We are not a government that shuns international organizations. We deal with them. The President has outlined the “Clean Sri Lanka” program. We must proceed with prioritized plans to make this a prosperous country, organizing all institutions accordingly. We must complete what is 99% done, not drag it out. Hence our discussions with the IMF. Under the understandings in the agreement signed by former President Ranil Wickremesinghe, there is agreement for a re-issuance to settle sovereigns with a 27% haircut. On US$14,200 million, a 27% haircut implies roughly a US$10 billion re-issuance. Therefore, Rs. 3,000 billion domestic borrowing is needed to facilitate the re-issuance toward US$10 billion.

¶ 10 We will issue the Rs. 3,000 billion and finish this, under the same agreed conditions.

¶ 11 Hon. Kabir Hashim asked why the rate would reduce to 17%. That is per the earlier agreement and the understandings — the payment profile adjusted based on growth; that was their agreement, not ours.