Member of Parliament Anura Dissanayake says that Sri Lanka as a country had to reach an agreement with the International Monetary Fund because of Central Bank Governor Dr. Nandalal Weerasinghe. He says that the reason for this is that Dr. Nandalal Weerasinghe, as the Governor of the Central Bank, made an official unilateral statement that he will no longer make payments related to the loans taken by Sri Lanka.
“Dr. Nandalal Weerasinghe was appointed as the Governor of the Central Bank on April 8, 2022. It was a Friday. April 9th was Saturday. A public holiday. Sunday, April 10, is also a holiday. The government announced April 11 as a special holiday. Three holidays to be exact and then next working day was April 12th . Dr. Nandalal Weerasinghe took the appointment of Governor of the Central Bank on April 8, 2022 and went to work at the Central Bank four days later on April 12.
The first decision taken by Dr. Nandalal Weerasinghe as Governor of the Central Bank in the first moment he sat in his chair was the decision that the Government of Sri Lanka would not pay the loans taken from foreign countries. The Governor of the Central Bank of Sri Lanka has announced that the Government of Sri Lanka will not repay the loans taken from foreign countries and financial institutions.
Who doesn’t understand that there is some interrelationship with any central bank governor making a decision not to bring in loans on the first day of joining the central bank. Not only that, but in 2022, the budget document specifically states that the loan and interest premium related to that year will be paid.
According to Article 148 of the Constitution, the financial power of the country is completely transferred to the Parliament. No one can touch it. In the budget of December 2021, money was allocated for debt repayment in 2022. It specifically mentioned the amount of the loan to be paid and how to find the money for the loan to be paid. Whether there is money or not is a separate issue. Whether it is possible or not is a separate debate.
But without any understanding, awareness or decision from the Cabinet or the Parliament, the Governor of the Central Bank takes a decision that we will not pay the debt. Some Members of Parliament pointed out this as a violation of the Constitution.
A country not paying its debts is an expression of the country’s disobedience. The country is bankrupt. After that, the only way shown to us is that if we don’t pay the debt, we must go to an agreement with the International Monetary Fund. There is no other alternative path.
We could have gone to bilateral agreements for financing. By August 2022, credit facilities of 3.8 billion dollars had been taken from India for the year 2022 alone. There was an opportunity to extend the negotiations with India and obtain loan facilities. We could have entered into a loan agreement with India in accordance with the development paths we are adopting. Same with China. Last March, 1.5 billion dollars worth of yuan loans were given. Even today it is included in the Central Bank’s reserves. But if we do not pay the debt, the opportunity to negotiate bilateral deals will be closed.
Even then, a financial deal was being discussed with Japan to get out of this crisis. But if we do not pay the debt, no one will lend to a country that does not pay the debt. We were able to get a loan from the Asian Development Bank. All that disappeared after the 12th of April.
With the decision taken by the Governor of the Central Bank on April 12th, we tied up with the International Monetary Fund as much as possible. This is a very conscious work. The opinion that he sat in that chair for that purpose has emerged in the society.
We get the first credit facility from the International Monetary Fund in 1966. From 1966 to 2016, we have received loan facilities from the International Monetary Fund sixteen times. Along with this opportunity we have taken loans on four occasions which is an extended facility. It means running the economy of our country according to an agenda given by them, or according to an agreement made with them.
“Dr. Nandalal Weerasinghe, who sat in his chair for the first time four days after accepting the appointment, through his declaration that we are a debt-free country, is entrusting the management of our country’s economy to the International Monetary Fund,” says MP Anura Dissanayake.
