Loan Talks – False Talks Sr. Economic Professor refutes Sirisena’s 10 Trillion Canard.
Posted on February 4th, 2018

Translated by : A.A.M,NIZAM – MATARA

Attention of the Local and International Monetary Institutions and reputed Economists has drawn on the statement made by President Sirisena to the Heads of Media Institutions on 6th January about the financial situation of the country.  One of the statements he had made at this media gathering was that the previous government during the 10 years of its office had taken foreign loans amounting to 10 Trillion and out of this amount only One Trillion has been recorded as receipts. I re-checked about this statement with the official records of the Presidential media unit and got confirmed that the President has made this statement.

As per the Oxford Dictionary one Trillion is equivalent to one million of millions. To say it simply it is ten laks of ten lakses or one lak of ten millions.  Although the previous government within its 10 years in office has obtained foreign loans amounting to 10 Trillion the President’s statement said that only One Trillion has been recorded and nine tenth of the loans was missing.

Given below are the details of foreign loans obtained during the 10 years of the previous government as announced by the Central Bank of Sri Lanka.:

Even if you take into account all the loans taken during the 66 years from 1948 to 2014 it does not come to Ten Trillions. The total comes to only Trillion 4.045.  The foreign loans taken from 2006 to 2014 amounted to only Trillion 2.156.  Accordingly, the statement that the previous government has taken foreign loans of Ten Trillions is totally untrue.

The second point is the statement that out of the 10 Trillions taken as foreign loans only one trillion has been recorded as government’s receipts. As 10 Trillions has not been taken there is no way getting recorded details of 09 Trillions in the Treasury records. The amount of Rs, 2.157 Trillions obtained as foreign loans by the previous government has been received from the governments of China, Japan, International Monetary Fund, World Bank, and Asian Development Bank.  The International Monetary Fund releases the tranches of its loans only after ascertaining and getting satisfied that the amount given earlier has been fully utilized on the set objectives and there had been no violations of the condition stipulated. The previous government has obtained foreign loans only through diplomatic channels, international monetary institutions, and through international markets. Under such conditions it is not possible to utilize such loans without making proper entries in the official records.  Therefore the second point also becomes a blatant lie.

On the other hand the mega projects implemented by the previous government such as Hambantota harbour, Mattala Airport, Expressways, main and provincial roads, have been recorded in the state properties register.  If not it will not be possible for this government to sell some of these projects to foreign countries.  In 05 years out of those 10 years the government had to spend on purchasing of attack aircrafts, frigates and arms to defeat the world’s ruthless terrorist organization.  A major portion of foreign loans taken by any government is mainly utilized to cover the budget deficit.  A major portion of foreign loans taken by the previous government from 2006 to 2014 has also been utilized to cover budget deficit and to make repayment of loan instalments. All these details have been recorded in the budgets, Central Bank Reports, and in the Government Loans Department.

President Sirisena in his aforementioned statement has also mentioned about the present government’s activities during the last three years as well. He has said that funds obtained from foreign institutions by the current government are being misused by the government. The present government is President Sirissena’s government.  President is the Head of this government and the Prime Minister and the Minsters of the government are appointed by the President.  If the government funds are being misused and if government’s revenue has been directed to private enterprises and if the President knows all such details he has the responsibility of immediately removing the concerned Ministers and take actions against them.

The amount of foreign loans obtained by the Mahinda Rajapaksa government during its 10 years was Rs. 2.157 Trillion. But the present government obtained Rs. 0.431, and Rs. 0.501 Trillion as foreign loans in 2015 and 2016 respectively. Official details of foreign loans obtained in the year 2017 are not available yet.  But statistics relating to local and foreign loans that have been already released indicate that the loan amount for the year 2017 will be Rs. 10.4 Trillion.  It was Rs. 7.4 Trillion in 2014.  Accordingly the loans obtained for the three years amount to Rs. 3 Trillion.  This is the massive loan amount taken by this country in its entire history in a short period.

Although it had taken such a massive loan amount the government could not launch any development project during the last three years.  Due to election targeted salary increases made during the 100 days government and increase of interest rates due to the Treasury Bond Scams the government has to spend large sums as day to day expenses. Funds being received locally and from overseas are being used to cover day to day expenses. Even the money obtained by the sale of the Hambantota harbour had been unable to utilize for repayment of the loan taken to construct that harbour.  As the loan remains as it is the money obtained from the sale has become necessary to cover government expenses.

It will become difficult to maintain credibility of the economic situation when government leaders make statements false and harmful to the country.  When it is announced about the foreign loans taken by the country and said that 9/10th of that loan amount gone missing this information gets spread like wild fire throughout the world.  It is this type of information that foreign institution use to decide about high corruption and unsuitability for investment in a country.  These institutions consider statement of state leaders as factual and responsible statements. But those institutions do not know that such statements are being made due to political problems in a country, due to political destability in a country, and such statements are made without obtaining factual information.

Although cases were filed and remanded some people whoo were in the previous government and who held responsible posts and not connected with this government on charges such as misinformation in ID cards, misuse of vehicles, purchase of flag posts, printing of Almanacs, and so on no one has been charged so far for corruption and misuse of funds.  If a matter like Treasury Bond Scams happened in a foreign country all those accused of having connection to it would have resigned.  But no one resigned here.  No one was presented to the Courts as well.  It has become necessary to enquire why the judicial institutions in the Kaduwela area which remained open even in mid night are not being kept open now.

The outcome of spreading of election related falsehood will be that the people will have no way to ascertain the truth and arrive at right decisions.  It has become quite clear now that stories spread during the 2015 election period about the golden horses, Lambogini cars, aeroplanes have become mere canards. Instead of that cases are being filed based on purchase of GI pipes.  Nevertheless even in this election similar to the presidential election the old scandals are being repeated.

The President making a statement a few months ago said that a massive fraud has been carried out in the Nilwala project and said all details will be revealed within a few days.  Minister Rajitha Senartne keeps on telling from the day this government came to power that all information has been received about money that had been deposited in Dubai Banks by Rajapaksas and they will soon be imprisoned.  But nothing has happened.  Despite that it has been decided by a Presidential Commission that Treasury Bond Scams have taken place and all those who have been accused mingle with the people as nothing has happened.

Senior Professor Sunanda Madduma Bandara

Economic Science Education Unit

Kelaniya University.

3 Responses to “Loan Talks – False Talks Sr. Economic Professor refutes Sirisena’s 10 Trillion Canard.”

  1. Dilrook Says:

    A presidential commission of inquiry must be appointed to look at the loan problem.

    Otherwise politicians use various figures for political purposes. People must know the truth and they should know how much they are indebted. Although the 10 trillion figure is wrong, it is a fact that two types of loans were not recorded in Central Bank reports.

    However, interest on these loans were paid and repayments were made. Interest and repayments are recorded in Central Bank and Treasury records.

    This created a mismatch between total loans and their repayments and interest. Loans appear to be manageable (compared to GDP) but in reality almost all state revenue goes to repay interest and loans.

    Readers must understand that this is a national problem, not a political party problem. It is good if they do their own research than rely on politicians, their supporters and politicised media. You can hide loans but you cannot hide their repayment!

  2. Christie Says:

    What comes out of Indian puppet Sirisena is what his puppeteer does.

    The more we get in to trouble with debt it is the majority Sinhalese who will suffer the most.

    As Indian Colonial Parasites control our economy and who are employed by the private sector they are the least affected..

  3. ranjit Says:

    This Gramasevaka rattle snake is a bloody liar. Disgrace to our country for having such a person as a president. When we have so much well known, well educated sons and daughters in our Motherland why we as citizens of this country appoint such unqualified individuals as first citizen of our beloved nation????? Stop sending uneducated, drug lords, gangsters, rapists etc to the parliament in the future. We need to change this system somehow. It can be done only through the citizens of this country. We need a straight forward visionary leader like Mahinda Rajapaksa to lead us to prosperity and success. Do not believe the lies of Sirisena Ranil duo and make our lives miserable anymore. These liars must be sent to hell or gallows for playing with our lives and the country we love very much.

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