Away from Parliament, president holds his first APC to 'solve crisis'
President Gotabaya Rajapaksa held his first All Party Conference (APC) at the President’s House on Wednesday to find solutions to the economic crisis, even as a host of parties boycott the event.
The conference is a genuine effort to find solutions, not a “political gimmick,” President Rajapaksa said in his opening remarks. It was important to stabilise the economy through short and long term solutions. He urged all those who absconded to attend in the future with proposals.
“All of us have a responsibility to find solutions to this crisis,” he stressed.
“Extraordinary challenges require extraordinary solutions,” Central Bank (CBSL) Governor Ajith Nivard Cabraal said, outlining the state of the economy and measures the regulator has recommended to overcome the crisis. At the beginning of March, the CBSL made eight proposals it believes the Government must implement.
They include restricting the import of non-essential items; raising fuel and electricity tariffs; encouraging foreign remittances and investments and increasing Government revenue by increasing taxes based on a sustainable policy. He was happy to see that some of these decisions, while difficult were already implemented, he said.
The Government’s reversal of economic principles has caused local and foreign investors to lose trust, thereby discouraging investments, said United National Party (UNP) Leader and former Prime Minister Ranil Wickremesinghe.
The only way to reverse the damage is a broad agreement on the fundamentals of the country’s economic policy and for political parties to work within that framework. CBSL monthly reports should be submitted to Parliament and new laws introduced to bring the regulator under Parliamentary oversight. The CBSL and Finance Ministry should work on one strategy and speak publicly in one voice. Mr Wickremesinghe called for the 2022 budget to be redone to change it from a “development budget” to a “welfare budget.”
“It’ll take a minimum of six months for the talks with the IMF to be concluded,” he warned. “The assistance we obtain from the Indian Credit Line will not last us beyond the first two weeks of May. Until we come to an agreement with the IMF and international sovereign bond holders, the Government needs to find some form of bridging finance for the four months that follow. Our only option is to approach several friendly countries to assist us in helping to implement a new economic plan. These should include India, China, Japan and the EU. We need to rebuild our relationship with these countries.”
The Government should be truthful with information regarding the economic collapse, Sri Lanka Freedom Party (SLFP) Chairman and former President Maithripala Sirisena said. It should have wide dialogue on solutions. The SLFP presented a document with 21 recommendations to overcome the crisis. They include cutting Government expenditure and money printing. Another proposal is the significant reduction in Cabinet Ministers by merging subjects. Any suggestion to restructure State enterprises must be accepted only if the model is drafted locally, the SLFP says.
The Mahajana Eksath Peramuna ( MEP) also submitted a list that includes formulating a national transport policy to conserve fuel and a “waga sangramaya” (cultivation campaign), State Minister Sisira Jayakody told the gathering.
Some families eat only one meal a day. There is an urgent need for a survey of such families so that the Government could at least distribute relief packs, said Lanka Sama Samaja Party ( LSSP) Leader Prof. Tissa Vitharana.
“Assistance from the International Monetary Fund (IMF) will lead our debt burden to worsen,” he warned. “The IMF will impose conditions that force us to allow unrestricted imports, putting us even deeper into the debt trap we’ve got entangled in. He recommended getting advice from local economists who are experts in both the global and local situation.
Ven. Athuraliye Rathana Thera of the Ape Janabala Pakshaya said the Government had not previously granted them space to even discuss these matters. “Everyone here knows what happened when we presented a set of proposals according to our conscience,” he pointed out.
The New Fortress Energy ( NFE) agreement shattered the people’s trust in the President, he continued. It should be suspended and the Government must urgently invest in renewable energy, providing incentives to producers to overcome the electricity shortfall. The Power Ministry must submit a detailed generation plan within two weeks, he recommended.
“There is an urgent situation that requires stabilization of the economy,” said Tamil National Alliance (TNA) Spokesman and ITAK MP M. A. Sumanthiran. “We should restructure our debt.”
“Even if you have the support of the IMF, our position is that we must have our own plan,” he asserted. “That seems to be lacking. If we have our plan, then we can negotiate. But if we go without a plan, then we will be given a prescription by the IMF and that may not be to our liking.”
The entire budget must be redone. Development activities will have to be stopped with funds being diverted toward a relief budget. The day before, 16 people from Mannar and Jaffna had left in boats for India saying living in Sri Lanka was unaffordable, Mr Sumanthiran said. The situation was dire and providing immediate assistance is imperative.
Responding to comments from some in the Government that the Tamil Diaspora could be tapped to i nvest in the country, Mr Sumanthiran said this was a real possibility. “We can act as a bridge,” he offered. “We have already negotiated with many people who are willing to bring in their funds and invest in this country. But there is no development without devolution.”
The Government’s aim was to aim for maximum self-sufficiency in essential foods and sustainable energy. It was moving towards these goals, Finance Minister Basil Rajapaksa said in concluding remarks.
Responding to concerns over going to the IMF, he said it was not a new thing and that institution already has an office in Sri Lanka, releasing a y early report on the economic situation. “But this is the first time we have come to a situation of having to discuss with them about managing our debt,” he acknowledged.
Cabinet has decided to appoint a technical committee comprising CBSL and Finance Ministry officials to negotiate with the IMF. A four- member group of Foreign Minister, Justice Minister, CBSL Governor and Finance Ministry Secretary will select foreign experts, Mr Rajapaksa said. To ensure transparency, he will not be involved in the process.
Although the situation was difficult, the Government still planned to give wide relief before the April New Year, he insisted. Contingent to Cabinet approval, he was even prepared to present a new budget.