The Hon. Amila Prasad

¶ 01 Hon. Deputy Chairperson of Committees, I am pleased to have the opportunity to express views on the Motion to adjourn the House presented today. In particular, the Government, aligning with the IMF and proceeding within that framework, has brought in the Public Finance Management legislation. The absence of such a law in the past led to numerous subsequent issues; therefore, as a country, we can consider this a very important law.

¶ 02 At the same time, fate keeps playing tricks on this Government. Why? Because the party that worked against that law when it was introduced, now sits on the right side of the House and expresses agreement with it. I see that as fate continuing to tease them. As we move to resolve the economic crisis in this country, the Government must truly have a clear understanding of the scope and depth of the crisis. It was not merely the lack of fiscal discipline that pushed us into crisis—though that was one reason. Additionally, the extensive tax cuts of 2019 and the collapse in foreign exchange inflows from tourism and migrant workers due to COVID-19 were two major factors that suddenly drove the state into collapse.

¶ 03 Beyond fiscal discipline, many long-term factors destabilized the economy: the civil disturbances and wars of 1956, 1971, 1983, 1988, and 2018 all contributed. Alongside these, the breakdown of fiscal discipline and harmful political interference in the economy worsened matters.

¶ 04 There are fundamentally two ways to stabilize a country: either run it as a tax state or as a debt state. As a movement that believes in social-democratic politics, we believe national problems should be solved through tax revenue, not perpetual borrowing. It is precisely the reliance on debt to solve problems that has inflicted so much pain. Therefore, we ask the Government to avoid falling back into the debt trap and, as debt service resumes from 2028, to prioritize generating the necessary revenue within this period so that repayments proceed successfully.

¶ 05 What is fiscal discipline? It is the process of aligning expenditure and borrowing with a country’s revenue capacity. Sri Lanka’s central problem is that a large share of GDP goes to pay interest and debt service. Beyond IMF conditions, what new measures will the Government take to reduce this ratio? Consider Japan: it carries a heavier debt load than us, but its capacity to service debt domestically is greater, and the share of revenue devoted to debt service is lower than ours. That is why such countries can move ahead faster. As a Government that claims new ambitions, I wish to know your own targets and innovative measures beyond IMF conditions.

¶ 06 However, while constantly speaking of fiscal discipline—even today—the concealment of information on certain customs containers is a breakdown of discipline. Likewise, directing MPs’ salaries into party funds is a breakdown of public financial discipline. Moreover, hiding international economic agreements from Parliament while talking about discipline is unacceptable.

¶ 07 People watch COPE and COPA proceedings continually, but our real problems lie in tenders. The day this country moves tenders onto an online system and makes them transparent to all will mark a turning point in our development. I believe the IMF framework also contains such expectations. We must swiftly resolve the issues surrounding tenders because large-scale theft and fraud occur within them. We also see a reversion to old practices in local government institutions. In discussing fiscal discipline, the Government must adopt and implement a transparent tender policy urgently.

¶ 08 There was talk about the Government’s vehicle auction, but there have been persistent doubts about that process. If you speak so much about discipline, you must communicate more systematically and transparently to the public so that discipline and transparency are made visible.

¶ 09 On investments, the Government keeps sending mixed messages on incoming projects. One minister says one thing, a deputy minister another, and the President yet another. Investment is a transaction that must be undertaken with fiscal prudence. Yet the Government seems to present varying figures to impress the public, confusing people with inconsistent narratives.

¶ 10 While discussing fiscal discipline, I must also note with concern the recent arrest of a specialist at the Sri Jayewardenepura Hospital. That arrest has unsettled sections of the medical profession. The country has very few specialists—particularly in neurosurgery, there may be fewer than ten. Decisions by such specialists to secure trustworthy equipment, including from outside the hospital when necessary, are taken for patient safety. Turning such clinical judgments into grounds for arrest is alarming.

¶ 11 There are also serious concerns about the manner of arrest. A doctor who has served for years, including at the Police Hospital, is being publicly vilified repeatedly through social media and various outlets as if on stage, causing distress and fear among medical professionals.