Hon. (Dr.) Harsha de Silva

¶ 01 Let me address the largest item here. The amount is Rs. 3,275 billion; that is, Rs. 3.275 trillion. Our Hon. Wasantha Samarasinghe said a haircut of USD 12.5 billion would be received on international sovereign bonds, and that at 27 percent nominal haircut, the principal becomes 9, then 1.7 is added as past-due interest to make it 10, and when multiplied by 300, the Rs. 3,275 billion figure arises. However, I must clarify: the 27 percent haircut is nominal. The actual haircut will be determined in January 2028 after benchmarking to Sri Lanka’s USD-denominated GDP from 2024-2027 under the MLB mechanism. All of us, including the Treasury, the bondholders, and the Central Bank, know that the effective haircut will reduce to around 14.96 percent.

¶ 02 Hon. Minister, we expected at least a voice raised in defence of the EPF in the domestic debt restructuring, which was unfairly imposed on it. Unfortunately, that did not happen. We accept this is a book entry as was the case in 2023 and 2024; there is no need to pretend otherwise. But that is not the argument. The argument is the mismatch between what was said on political platforms and what is being asked here today. It is said 99 percent have agreed; that nothing can be done. Yet Hon. Kabir Hashim stated the DOO has not signed. Indeed, they have time until 12 December—one more week. You expect at least 90 percent of international sovereign bondholders to agree. There is still time. If it has already been signed, I challenge you to table the signed document in Parliament. It has not been signed; that is the truth. You have time, but you are not using it. I will address more of this under your reply.

¶ 03 The JVP/NPP declared that these debts were stolen; that only 53 percent of borrowed funds arrived in Sri Lanka and 47 percent did not; that liabilities were Rs. 8 trillion while assets were Rs. 2.8 trillion, implying Rs. 6 trillion was stolen; and they even dragged in countries like Uganda. We explained repeatedly that while liabilities are recorded at Treasury, many assets are on the books of other institutions—RDA, UDA, BOI, etc.—while Mahaweli assets are not marked to Treasury. This is an accounting issue. No one stole Rs. 6 trillion. There has been corruption and we fully support prosecuting and jailing offenders, Hon. Minister.

¶ 04 But a narrative was popularized that these were “odious debts.” You said you would do a forensic audit; that odious debt means borrowing for one purpose and using for another under dictators who siphoned to personal accounts, whether Uganda or elsewhere; and that after investigation the DOB would refuse to pay. None of that has happened. We even heard sweeping statements that for 76 years nothing positive was done.

¶ 05 Hon. Kabir Hashim convincingly argued yesterday that in those 76 years much was accomplished. Sri Lanka is not a garbage heap. Many things happened. I will not dwell on that now. But if you claim 76 years of theft, you must show both sides: lenders knew inflated project costs and borrowers knew it, creating the so-called “debt trap.”

¶ 06 About ten days ago, the Chinese Ambassador said their projects are not white elephants, loans must be repaid, and even if 47 percent was supposedly stolen, they now agree to repayment after restructuring. Then why did you tell the nation that those who “stole” will not repay? There is a large contradiction. At this point, you cannot have it both ways. We accept there is an obligation to repay. But people must understand that during the election they were misled to believe we need not repay. You explicitly said so; now there is silence.

¶ 07 You also said you would change the DSA, reform IMF restructuring. I recall a Ceylon Chamber debate two weeks before the Presidential Election with Hon. Harshana Suriyapperuma, where he waved the JVP/NPP policy book and said: “We will do our own DSA; we have almost completed it; our DSA will form the basis of restructuring.” Now you deny saying that. This was deception. You did not alter a single word from the Agreement the Government of President Ranil Wickremesinghe had nearly finalized. As I said, bondholders have until 12 December to agree. You also did not seek to negotiate based on your DSA or anyone else’s, as promised. That is the truth. The same Rs. 3,275 billion the former President sought for debt restructuring is what you now seek to the last rupee.

¶ 08 Be that as it may, we will give you time to present in the 2025 Budget your revolutionary plans to overhaul the economy since you claim the past path was utterly wrong. Present your new measures.

¶ 09 Hon. Deputy Speaker

¶ 10 Hon. (Dr.) Harsha de Silva, you have two more minutes.