{"id":73751,"date":"2021-07-25T01:49:23","date_gmt":"2021-07-25T06:49:23","guid":{"rendered":"http:\/\/dbsjeyaraj.com\/dbsj\/?p=73751"},"modified":"2021-07-25T01:49:23","modified_gmt":"2021-07-25T06:49:23","slug":"sri-lanka-has-no-immediate-plan-to-seek-financing-from-the-international-monetary-fund-says-presidential-secretary-p-b-jayasundera-the-imf-coming-wont-bring-tourism-here-the-imf-c","status":"publish","type":"post","link":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=73751","title":{"rendered":"Sri Lanka has no immediate plan to seek financing from the International Monetary Fund says Presidential Secretary P.B. Jayasundera; \u201cThe IMF coming won\u2019t bring tourism here. The IMF coming won\u2019t bring exports back.\u201d"},"content":{"rendered":"


\nBy Namini Wijedasa<\/strong><\/p>\n

Sri Lanka has no immediate plan to seek financing from the International Monetary Fund (IMF), Presidential Secretary P.B. Jayasundera has said.<\/p>\n

\u201cRight now, it is not a question of whether we want the IMF or not,\u201d the former Finance Ministry Secretary explained in an interview.<\/p>\n

\u201cThe IMF coming won\u2019t bring tourism here. The IMF coming won\u2019t bring exports back.\u201d<\/p>\n

Any borrowing, including an IMF programme, was \u201cgood if you have prospects to improve quickly and if you have hope that, in the next six months, tourism will bring US$ 2bn and domestic activity or something else will happen\u201d.<\/p>\n

<\/p>\n

\u201cBut if the borrowing programme is not assuring you that kind of recovery, what is important is to work out the areas where such assurances will come,\u201d said Dr Jayasundera. \u201cAnd that assurance will come from investment, not from borrowing.\u201d However, he expressed satisfaction at the Central Bank of Sri Lanka\u2019s currency swaps with China, India and Bangladesh.<\/p>\n

The senior economist continues to advise the Government on policy and indicated he would also be working closely with the new Finance Minister, Basil Rajapaksa. He said there were likely to be \u201cpeople who are looking for investment openings in this environment because investors also know there must be an end to this\u201d.<\/p>\n

\u201cExpensive, no-return projects in the medium to long term should be deferred,\u201d he reiterated, including the Japanese-funded light rail transit initiative\u2013now cancelled\u2013in the mix. The alternative was to consolidate projects already on the ground, for which funds are secure, and to make use of them.<\/p>\n

\u201cIf you execute those projects, you can get the money,\u201d he continued. The World Bank\/Asian Development Bank project portfolio covering such sectors as water, irrigation, highways, education and health is around US$ 3bn with utilisation spanning three to four years. \u201cSo, if you fast-track them, remove the bottlenecks for implementation and focus on those, the disbursements are a money flow,\u201d he said.<\/p>\n

Last year saw the highest ADB disbursement at US$ 750mn (Rs 149bn), Dr Jayasundera said: \u201cSo I told them, \u2018Let\u2019s work for a billion dollars\u2019.\u201d Apart from bottlenecks and approvals processes, a \u201crelaxed\u201d attitude brought about by COVID-19 was delaying things.<\/p>\n

The Government was not keen on new projects unless they fit into renewable energy, agriculture technology or information technology (IT). \u201cWhile people are only focusing on the recovery of tourism, IT can replace it,\u201d he predicted. \u201cThe apparel sector is resilient and exports have bounced back to pre-2019 levels. When these import restrictions are gradually relaxed they should be able to support the export\/import business.\u201d<\/p>\n

With most countries shifting to online business, Sri Lanka has targeted US$ 1.7bn (Rs 338bn) of revenue through the IT sector. There were also opportunities in renewable energy, Dr Jayasundera said. The work by India\u2019s Adani Ports and SEZ Ltd on the Colombo Port\u2019s West Terminal is going ahead (the investors are with the bankers now) while the remaining investment into Waterfront Integrated Resort is also due.<\/p>\n

The President\u2019s Secretary also criticised rating agencies\u2013Moody\u2019s being the latest to have issued a statement saying Sri Lanka was under review for a downgrade. The agency neither contacted his office nor the Finance Ministry. \u201cTo whom did they talk?\u201d he asked. \u201cNone of these guys has spoken to us. Those who are writing these have no ground-level knowledge.\u201d<\/p>\n

The Moody\u2019s report was not \u201cevidence-based\u201d, he continued. For instance, it referred to environmental risks which were not new and amidst the UN Sustainable Development Commission upgrading Sri Lanka. It also contains contradictions, stating, for instance, that Sri Lanka\u2019s current account deficit is likely to remain stable.<\/p>\n

\u201cThey can ridicule and hold small countries to ransom,\u201d Dr Jayasundera asserted, warning that the Government was managing \u201ca real economy, real people\u201d.<\/p>\n

\u201cKnowing very well that on July 27 we will pay the sovereign bond, they are issuing this,\u201d Last year also they did the same thing. I don\u2019t know what the kick they get out of it. I can understand if they issue this if we have defaulted.\u201d<\/p>\n

The third quarter of the year is typically stressful, he admitted. \u201cIt\u2019s stressful in the sense that our priority was to fast-track vaccination to prevent the spread,\u201d he said. \u201cIt was a priority and that programme is US$ 250-300mn (Rs 50-60bn) in expenditure. On top of that, in terms of the debt profile, July is a month where so many payments get bunched that we have to honour.\u201d<\/p>\n

But the Government had no debt-servicing problems with bilateral or multilateral sources as their project disbursements were higher than the debt-servicing. If the President\u2019s vaccination target is met by September 30, \u201cSociety can be put on a much more relaxed working environment than now\u201d.
\n
\nCourtesy:Sunday Times<\/em><\/p>\n

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By Namini Wijedasa Sri Lanka has no immediate plan to seek financing from the International Monetary Fund (IMF), Presidential Secretary P.B. Jayasundera has said. \u201cRight now, it is not a question of whether we want the IMF or not,\u201d the former Finance Ministry Secretary explained in an interview. \u201cThe IMF coming won\u2019t bring tourism here. …<\/p>\n

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