Sri Lanka in a catch-22 situation
Posted on March 6th, 2017
EDITORIAL Courtesy The Daily Mirror
The country faces an almost insurmountable foreign exchange and external debt repayment crisis; a problem of finding backers to help extricate itself from this situation.
The External Debt in Sri Lanka averaged 42,142.63 USD Million from 2012 until 2016, reached an all time high of 47,302.10 USD Million in the third quarter of 2016. Since independence Sri Lanka has never defaulted on its repayments, but today a repayment default is staring the country in the face. It is claimed that the last regime frittered away the IMF/World Bank life-line extended, leaving the present regime to carry the baby.
Be that as it may, the billion dollar question facing the country is how we are going to address this problem. The sources available to the Government to even temporarily tide over the problem and keep the country economically afloat are few.
The International Monetary Fund (IMF)/World Bank whose funding comes with conditions imposed by the institutions The second option is China, whom unfortunately the present regime antagonised, not only in the run-up to the election, but also in the aftermath of an unprecedented election victory.
These are the sources which could provide a financial lifeline to the country. The billion dollar question is which option the country will opt for.
Unlike in many other countries, Sri Lankan politicians have never shown an inclination to come together when the country faced destabilisation or danger.
When al-Qaeda carried out attacks in the US mainland on 9/11, we did not see the unedifying spectacle of the Opposition parties in the US blaming the administration of President Bush for the attack.
Instead we saw the Democratic Party totally backing the then President to unite Americans against a common foe. In neighbouring India, whatever the differences of caste, creed or party affiliation, the politicians and people unite as Indians against anyone seen as an opponent.
Unfortunately in Sri Lanka party-political affiliations and personal agendas override national need. The country was never able to unite in the war against the LTTE –described as ‘the most brutal terrorist organisation in the world’.
Sri Lankans could not recognise the woods for the trees –we pay too much attention to details- the Tamil mainline political party and people backed the LTTE because they claimed to be fighting for Tamil rights, despite Tamils being more oppressed under the LTTE than at that time under a Sinhalese government.
India promoted the rebels to promote its domination in what it sees as its backyard. The Western ‘democratic’ countries –upholders of Human Rights values when it suits their purposes- backed the LTTE despite its flagrant rights violations.
It was only the Non-Aligned Group of Nations including China, which backed this country in its efforts to overcome the terrorists.
Today we are facing an equally difficult uphill task, the problem is different but the situation is equally grave. We are caught in a debt-trap of our own making as was the ethnic problem of yesteryear. As then we do not see our country and its people uniting to overcome the foreign exchange and debt repayment trap we have entrapped ourselves in. To overcome the problem we need to attract foreign investment into the country. The Chinese have already made huge structural investments in the country by way of highways, a mega port and port city.
But the investments are not generating revenue to repay the loans, they were taken for. We need to move onto the second stage to transform the original investments into capital earning entities.
Sadly we now have a situation where we have the very persons who initiated the original programmes, blocking the second stage of the programme. Effectively preventing their becoming capital earning capacities and in this way easing the debt repayment problem the country faces. India continues to see bogeymen in the Chinese involvement in Sri Lanka’s development claiming it endangers Indian security, but while opposing Chinese investment in Sri Lanka India herself makes no effort to fill the vacuum.
The Forbes magazine in an article of Jan 21, 2017 regarding the offer to partner with India in developing the Trincomalee harbour and thus ease Indian fears of Chinese involvement in Sri Lanka’s ports encapsulates India’s attitude towards our country… “India Tells Sri Lanka: You Can Take Your Port And Shove It”.
It’s time to put Sri Lanka first.
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