Sri Lanka's Economic Quagmire: Time for a Progressive Change

-By Shantha Jayarathne

(Lanka-e-News -04.Oct.2023, 5.15PM) In a shocking revelation, the International Monetary Fund (IMF) has laid bare the grim realities of Sri Lanka's economy, dispelling the illusion of a nation on the path to recovery. This revelation comes at a critical juncture when the people of Sri Lanka are increasingly questioning the leadership's ability to revive the economy and ensure their welfare. With the President's incapability to address the economic crisis, it is imperative that the people are given the chance to elect a progressive party devoted to rebuilding the nation's economy and safeguarding their interests.

IMF's Grim Assessment: A Wake-Up Call

Last week, the IMF's Head of Delegation delivered a sobering assessment, announcing the failure to reach a Staff-Level Agreement with the Sri Lankan government during their first review of the 17th intervention under a $2.9 billion bailout package. The reasons cited were the ongoing external debt restructuring process and significant revenue shortfalls, leaving a $300 million tranche suspended. This development has cast a shadow of uncertainty over business confidence in the country.

Revenue Shortfalls and Governance Concerns

Among the IMF's notable observations were the urgent need to strengthen tax administration, the removal of tax exemptions, and tackling tax evasion. Shockingly, projections indicate a 15% revenue shortfall this year, with a staggering half a trillion rupees reportedly lost to corruption and inefficiency at key state institutions, all under the Minister of Finance's purview – a role held by the President himself. These revelations raise serious questions about governance at the highest level.

Controversial Legislation: A Threat to Freedom

Two controversial bills, the Anti-Terrorism Bill and the Online Safety Bill, have been fast-tracked without public consultation, sparking outrage at home and abroad. Opposition parties plan to challenge their legality in court, setting the stage for a significant legal battle. The International Commission of Jurists (ICJ) and the Bar Association of Sri Lanka (BASL) have criticized these bills, citing their impact on freedom of expression, opinion, and information.

Outsourcing Economic Policy: A Concerning Trend

Amidst these developments, it is concerning that the Finance Ministry's core function, economic policy formulation, seems outsourced to the IMF, while the Finance Minister engages in international pursuits. The IMF itself expressed doubt about economic recovery in the current context, raising concerns about the government's ability to address pressing issues.

Time for Change: A Disillusioned Populace

The question that arises is why the current leadership, lacking professional expertise, persists when there's the option to seek a more capable team. Sri Lanka stands at a crossroads, and the people's patience wears thin, with a Presidential Election looming in a year. The government must recognize that change is on the horizon, driven by a disillusioned populace.

Prioritizing the Nation's Well-being

In this pivotal moment, the government should prioritize the nation's well-being over suppressing dissent and strive for meaningful economic reform. The silence of the IMF on certain matters raises eyebrows, and it is clear that the people of Sri Lanka cannot afford to repeat the mistakes of the past. History has shown that the people's resilience cannot be underestimated.

As the nation looks toward the future, it is imperative that they are given the opportunity to elect a progressive party devoted to rebuilding the economy and ensuring the welfare of the people. The time for change is approaching, and the government's actions in the coming months will determine the fate of Sri Lanka's economy and its leadership.

-Shantha Jayarathne

Former Senior Consultant
Sri Lanka Institute of Development Administration (SLIDA)

by     (2023-10-04 11:51:21)

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