Why SL does not need to become pray to the IMF
Posted on January 26th, 2022

Dr. Chula Rajapakse MNZM

SL has laid out a plan that is in the public domain , for paying it’s loan commitments for 2022, 500 million paid 18/1 and about 5 Billion mid 2022 and beyond .

Instead of securing bridging loans from the IMF , they have secured short term bridging  loans and currency swaps and loans , from friendly countries China, India , Bangladesh and a Gulf country without IMF type adverse conditions, to satisfy its short term bridging needs. SL has also requested loan restructuring form one of their main lenders China, who is considering the request favourably  as we write. Hence clearly there is no need for further bridging loans from the IMF. The central bank of Ceylon also has  teams of well educated,  bankers  with doctorates and more conversant with local needs and requirements , better suited to deal with SL’s needs than the  IMF. A further reason why IMF is not needed at least now,


The long term plan and need  is strengthening their FOREX reserves . This they hope to achieve  through the COvid control following their very successful vaccination drive , though their Booster vaccination uptake ( at nearly 5 million with target of at least 10 Million) needs to be  improved . With this the Re instituting of tourism and foreign worker remittances in 2022 the loss of  both of which were two main contributors to its current FOREX reserves going down, could be corrected. However the  background of a rundown economy following five years of Ayahapalana rule.( See graph) still remains but could be remedied among others  by the measures below.  

The  following additional  new sources  of Forex securing r actively being pursued successfully now. These include improving agro industries like sugar cane, cardamoms, other spices etc, pharmaceutical manufacture locally eg Import of Saline to stop completely in Feb ‘22, and manufacture of upto 80% of currently imported pharmaceuticals by 2024/25 through manufacturing locally from new plants under construction in Hambantota FTZ/EPZ and else where, other manufacturing industries started and being started including tyres, motor vehicles, Yatch and ship building, actively seeking and securing foreign investment in Colombo Port City in IT and Finance technology and Hambantota FTZ for manufacturing. Also securing foreign investment for other projects including the development of the new Eastern, Southern and Western terminals that would double Colombo Harbour capacity by 2024 bringing it from the 23rd to the 13th in the world by the volume of cargo it handles,.

Also further developng bunkering capacity of Hambantota Harbour completely undermined by AYAHAPALANA the moment it came to power at Singapores behest, ( Singapore looses out on bunkering because of Hambantota)  and and development of Hambantota’s  ‘potential as a trans shipment hub for both East and West bound goods , development of the hitherto neglected and undermined Mattala air port to facilitate development of tourism in the region going upto Arugambay with it’s unique potential for surfing including staging world championships as was being planned before the Tsunami,, and manufacturing industry constructions in the adjacent Hambantota FTZ/EPZ , improvements in Apparel industry earnings through exploiting opportunities arising of Covid shut downs in other manufacturing sites, and in other ways .

Additionally accessing natural gas reserves from the Mannar Basin appears to e a real prospect by 2024/25. This would make a huge dent into the expenses insure in securing petroleum products.

The other part of the strategy is  conserving available forex by the short term reduction of non essential purchases from foreign sources like motor  cars and some food items that could be grown in SL and manufacture items that could b manufactured in SL These are already happening.

Against this patently obvious strategies , I find the often repeated claim of, ”  there appears too no plan to overcome the FOREX problem” , annoying to read, to say the least.

  However  a major challenge that SL faces in achieving these is the relentless campaign of politically motivated bad mouthing , undermining and blatant sabotaging of every attempt of the govt to secure these . These acts of sabotage including through baseless rumor mongering r being  carried out by the political opposition and its trade unions, funded as during the war , through complex web of receipt and deception  woven by the Tiger diaspora, western governments , evangelical movement s and sections of Indian influences all of whom find the commitment of the current administrations to SL ‘s revival an anathema and running contrary to their vested interests . They would. much rather have a dysfunctional administration like the Ayahapalana whom they could manipulate at will. They see the same potential in the SJB/JVP combine with at least three Presidential aspirants apart from the one who would be their initial leader in  whom his one time leader on ION recently & openly expressed his lack of confidence.  

This is the same undermining & sabotaging that was also evident during 3 decade war against the Tiger terrorists whom SL overcame despite all their dire predictions &  prophesies of gloom and threats including visits from foreign ministers of UK and France in April ’09 demanding that the offensive against the  terrorists be withdrawn coming a few days after a similar message from New Delhi delivered by special emissary .Perhaps they expected a similar response to that in 1989 by JRJ who in response to the Parippu drop at Vadamarachi, halted the offensive that if pursued would have ended the war with capture of Prabakaran within few hours if not few days. There could be  no better illustration of  the  contrasting commitment and steel of the two leaders.!

I have reasonable confidence of history repeating it self in Sri Lanka’s favour this time too , protected by the purity of the intentions for the good of Sri Lanka. Dr. Chula Rajapakse MNZM

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