“Ill timed, unconventional decisions, huge foreign credit led to current crisis”
Posted on April 26th, 2022

Shirajiv Sirimane Courtesy The Daily News

Several ill timed and unconventional decisions and taking huge amounts of foreign credit by successive governments and also by this administration had led Sri Lanka to this current economic crisis, Minister of Mass Media Dr. Nalaka Godahewa said.

Sri Lanka’s public debt has risen from 94% in 2019 to 119% of GDP in 2021. Sri Lanka currently has to settle around USD 51 billion by 2026.”

He said that key time bound decisions like going to the IMF on time were not taken by some former government top officials and they should be made accountable. The Minister said that while they could negotiate debt pay back with some countries the IMF assistance and support was needed to talk to some western donor agencies. Sri Lanka called for a ‘debt default’ and due to this Sri Lanka could have faced some global financial limitations and the fact that the IMF is behind Sri Lanka will be a great advantage to overcome this. If we did not go to the IMF even now the ‘default’ would have been severe.”

Dr Godahewa also said that the revenue that came annually to Sri Lanka to the tune of around USD 10 billion from key areas like tourism, foreign remittances, foreign direct investments also dried up in the past two years while the government had to unexpectedly spend heavily on safeguarding people from the C-19 pandemic.

He also stressed that the IMF has not advised Sri Lanka to increase taxes. The IMF currently wants a plan from Sri Lanka on debt sustainability which we have provided.”

Dr.Godahewa also disclosed that the government has decided to provide new methodology instead of previously existing visa issuance methodology for long – term residence visa issuance. Depending on the amount of investment of United States Dollars, issuance of long – term residence visa from 5 to 10 years for foreigners and directors, their spouses and their dependents of foreign companies who invest at least United States Dollars 75,000 or more than that in condominium properties.

He also said that the Cabinet of Ministers approved the proposal presented by the Minister of Energy to advise legal draftsmen to draft a bill to amend the Petroleum Products Act, making provisions to issue licenses to properly identified parties. This will allow priority export product manufacturing parties to import fuel on their own.”

One of the largest exporter clusters in Sri Lanka with high expatriate employees, Free Trade Zone Manufactures Association Secretary Dhammika Fernando hailed both the visa and fuel proposal by the Cabinet and said it will have a very positive impact on the economy and also for FDI.

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