The Frontline Socialist Party (FSP) has accused President Anura Kumara Dissanayake of merely formalizing the debt restructuring agreement initially reached between former President Ranil Wickremesinghe and the International Sovereign Bond (ISB) companies without making any amendments. According to the FSP, despite President Dissanayake’s claims of rescuing Sri Lanka from bankruptcy, he has, in reality, upheld the same agreement without alteration.
Speaking at a seminar on the matter, FSP Education Secretary Pubudu Jayagoda criticized the government’s handling of the country’s financial crisis. He explained that ISBs are financial entities engaged in lending at high interest rates for short-term gains. Sri Lanka had never borrowed from ISBs until 2014, when then-President Mahinda Rajapaksa took out a $4 billion loan from these financial institutions. Jayagoda further stated that during Gotabaya Rajapaksa’s tenure, these debts were repaid with interest. However, it was Ranil Wickremesinghe who later borrowed the largest amounts, significantly exacerbating the debt crisis.
“Ranil Wickremesinghe is not the angel who saved us from debt; rather, he is the mastermind behind the trap that plunged Sri Lanka deeper into financial ruin. Under his administration’s so-called ‘good governance’ period, the country borrowed $12 billion in ISBs, which led to the declaration of bankruptcy when we failed to repay it. With interest, we now owe a staggering $16.7 billion,” Jayagoda asserted.
He highlighted that other countries in similar debt crises have successfully negotiated significant reductions in their sovereign debt. “When a country declares bankruptcy, it typically seeks substantial debt reductions. Ecuador managed to secure a 67.7% debt reduction, Seychelles received a 56.2% reduction, and Ghana, which declared bankruptcy in April 2022, also secured considerable relief. However, Sri Lanka has now gone down in history as the nation that achieved the lowest debt reduction after declaring bankruptcy.”
Jayagoda also criticized the government’s framing of December 21, 2024, as a so-called historic milestone. “The President claims that this date should be remembered as a day of victory, suggesting that we celebrate it annually with milk rice and tambourines. But what truly happened on that day? On December 21, 2024, the agreement that Ranil Wickremesinghe signed with international bondholders on September 19, 2024, was officially ratified without a single alteration. This means Anura Kumara Dissanayake will now be remembered in history as the leader who endorsed this deal, not Ranil Wickremesinghe.”
He warned that in the coming days, Wickremesinghe might try to distance himself from the agreement, shifting the responsibility entirely onto Dissanayake. “Ranil will claim that it was not him but Anura who approved this disastrous agreement. He will argue that he had merely been strategizing, that he had planned to deceive creditors with false promises. But the reality is that it was Anura Kumara Dissanayake who sealed this deal, taking full responsibility for its consequences.”
Jayagoda further criticized Dissanayake for taking pride in the agreement and presenting it as an achievement in Parliament. “Not only has he committed this economic blunder, but he also boasts about it. Now, we are being asked to celebrate this day of financial downfall every year. Instead of acknowledging the crisis, we are being encouraged to glorify it.”
The FSP continues to denounce the government’s economic policies, arguing that Sri Lanka has been pushed into a deeper financial crisis with one of the weakest debt restructuring agreements in global history. The party warns that unless immediate corrective measures are taken, the economic burden on the people will only intensify.
