By Saman Indrajith Courtesy The Island

Opposition leader Sajith Premadasa’s questions on the management of the government reminded him of a person that drives recklessly knocks down a person and then queries from the latter what happened, State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal yesterday told Parliament.

The Yahapalana government, where the opposition leader was a powerful minister, brought the economy to its knees and is now asking us to rectify the issues they created,” the Minister said.

Minister Cabraal said that the former government obtained USD 6.9 billion in loans and sovereign bonds at an interest of 7.8 percent. With USD 6.9 billion, six harbours the size of Hambantota harbour could have been built. The funny thing is that many local and foreign institutions kept mum about your reckless loan taking. During the time of our government prior to 2015, we borrowed only USD 5.5 billion for the entire nine year period. The debt was at 91 percent of the GDP when we took the office and we brought it down to 70 per cent of the GDP. During the period of the yahapalana government from 2015 to 2019 it has been increased to 86 percent. So some of the questions are asked from us now, you should have raised them in the cabinet during the time of the yahapalana government. One such question is as to how to bring down those debts.”

Cabraal added that during the previous government very few investment opportunities came in. There was a difference of opinion between the rating institutes such as Fitch and Moodys and the government.

In my view and in the view of the government, it is surprising to note that the Fitch ratings assessment had ignored several key proposals included in the government budget proposals 2021 with regard to deficit financing in the period ahead. We have set out various ways explaining how the debt deficit would be financed. Obviously they have ignored it and so has the opposition leader. As indicated in the Budget 2021 the government has adopted a novel approach in relation to foreign financing while enhancing the effectiveness of already secured financing channels aimed at reducing the share of foreign financing in the budget deficit over the medium term. In 2014, the total debt, if you break it down into foreign debt and local debt, it was 40 percent foreign debt and the local debt was 60 percent, but by 2019 as a result of the various measures taken by the yahapalana government that ratio had changed to 50 percent foreign and 50 percent local. So we inherited huge risk with regard to foreign debt. That was their making but we will deal with it,” the Minister said.