Shenali Waduge

IMF cannot wash its hands off taking blame for Sri Lanka’s economic crisis

When PM Ranil was controversially made PM in 2015, he brought the Central Bank under him and the Governor had to report to him.

The Governor was his school buddy & his successor was another buddy

All of them were associated with the IMF & took advice from IMF/WB

All of the CBSL top management if you notice in their statements have notihng other than saying ‘we should have gone to the IMF’

What is the IMF – it is a monetary body that gives loans on interest after govts agree to privatize and cut subsidies on the poor.

What is so big about taking loans if we have to pay interest and if the loan is dependent on cutting welfare for the poorer sections of society?

To understand Sri Lanka’s collapse it is important to note the numerous triggers used like stepping on land mines ….

First came the ISBs taken under yahapalana knowing there were no reserves to payback

Then came the Easter Sunday attack & Covid

Next came depreciating the rupee on advice of IMF & free floating the currency

Finally came the biggest shock by Minister Sabry who declared Sri Lanka bankrupt – with this declaration no one wanted to do anything with Sri Lanka on credit ..

To understand the gravity of this announcement all one needs to do is to think of a person who has gone bankrupt – all his friends, all his relations will desert him as he has hit rock bottom.

This is exactly what happened with the declaration by Sabry that Sri Lanka was not going to honor its debt and this was heralded by top business leaders & Chambers as well.

When a nation says it will not honor debt taken without trying to renegotiate these deals, that country loses its credibility.

The annoying aspect of this announcement came in isolating Sri Lanka from the world, the only solution we are told is to go to IMF who is part of the problem.