Mr Sumanthiran, a TNA parliamentarian, stated in the parliament that the government’s domestic debt restructuring plan would cause more hardships than good for the people of this country. He stated that the plan is intended to give some members of society who support and finance government with debt, as well as financing their election campaigns, an unfair financial advantage over the rest of the working class, which numbers more than two million people.
He emphasised that the EPF has a bleak history, saying, “We have a history of EPF through bond scams, through various methods EPF has been eaten into.” All these platitudes from the honourable Prime Minister fall flat on their faces, because it is always the EPF and the ETF that you have dipped your hands into.
Reasoning out further he noted ‘it is because they are voice less, they are working class, and it is easy for you to do this. You don’t give them a voice. You appoint the central bank’s monetary board to be the custodian so make decision on their behalf. This restructuring plan is theirs. Restructuring plans come from the treasury and the central Bank and very same people make decision on behalf of EPF. There is no voluntariness at all’.
He explained how the foreign debt holders make profits. ‘The government is able to publish each of the investment of the foreign debt holders, because they insist on it. EPF you don’t do that, but thanks to that publication we are able to tell you that a weighted average return of the entire treasury bond holding of the government today is 13.53 %. That is our calculation, and what are you assuring the EPF 9.1%. When the weighted average is 13.53% you are saying 2038 the EPF will get a return of 9.1%. ‘
Despite CB has not given the required information about the loss of EPF he explained it in his speech. ‘I will come to the loss to the EPF, we have repeatedly have asked the central bank to share with us the net present value loss to the EPF and they have not given it to us. But it is easily calculable. You can calculate that I am saying that with responsibility that the net present value as at today the loss will be 47%. That is the net present value loss to the EPF’.
‘Since the EPF in the single largest holder of government bonds over 40% we expect the EPF to have the same overall yield as the stock of the government bonds which will be at 13.52%. In this debt restructure the government is proposing to limit the yield to 9.1% for 16 years. The implication of this is this, even if current EPF members put no more money to the EPF and just allow their current holdings to grow for the next 16 years at the current yield of 13.52% which is which is 3.2 trillion today would have gone to 25.7 trillion. Whereas your 9.1% it will grow only to 12.1 trillion’ he said further.
In august and September last year they bought bonds at very high yields at 20 percent, 21 percent, 25percent interests, ‘you are not touching any of those’ he said. He explained ‘this amounts to 15% of your local debts because those are your friends. Those are the ones do bond scams for you. They are the ones fund your election campaigns. That is why you let them off the hook and whom are you taxing the EPF holders who will have half their value 47% like 50% percent and it will cut half their value when they take this.
‘I can demonstrate it like this way if a EPF member who have 1 million in his account if he invest that amount would have got about 13.52 % average yield and what is the gain he get as against getting 9.1% he gets less than half. Coupon holders who invested in August and September if they put one million every six months they get 100,000, rupees at 20%. Every six months they get 100,000 for one million, investment ‘he explained further.
The working class, who are these working class, those are the poor women in this country those who work in the garment trade, and the poor tea pluckers in the estates, I would like to ask Jeewan Thondaman with what cons ions you are supporting this debt restructure. When all those women who stand to lose, who had lost so much, which stand to lose so much more they are the back bone of the country’s economy, they are the ones you have chosen to trample under your feet, yet again because it is so easy to do that.
If you touch the private bond holders the explanation given to us by the central bank ‘that is not enough’, but first take that, why don’t you take that first. At least give a message to the country that people who have lend to the government the money market players, primary dealers, that is their business for decades they are in this business. Because of the economic crisis they got high yield he explain this is the reality.
Again I want to tell the monitory board this is what you do to the working class of the country you will be the one exposed before the country. You dare not do this. You are given 21 days from the 4th of July apparently to do a voluntary decision. You make that decision on behalf of 2.5 million working class people of this country, and you make the wrong choice you will be the one will have to bear the brunt of peoples wroth he cautioned.
