Feb 13, Colombo: Sri Lanka's main opposition United National Party (UNP) says the country instead of becoming the Miracle of Asia has turned out to be the Breakout Nation in need of life support.
UNP parliamentarian and Economist Dr. Harsha de Silva says what the country now needs is neither budget support nor balance of payments support, but life support.
Issuing a statement, he has explained that on the one hand, the Treasury is looking for budgetary support and on the other; the Central Bank is refusing balance of payments support.
"President Mahinda Rajapaksa, in his capacity as Minister of Finance, announced with the presentation of the 2013 Budget that there will be no foreign commercial borrowing to bridge the deficit this year. This is because the government has borrowed so much under commercial terms that repayments are beginning to bite. Therefore it is expected that the government would seek the assistance of development partners for budgetary support at concessional terms and also shift the focus to domestic borrowing," Dr. de Silva has noted.
He has pointed out that when Treasury Secretary Dr. P.B. Jayasundera had announced recently that the government is seeking budgetary support from the International Monetary Fund (IMF), he had noted that it was highly unlikely, as the IMF does not have such programs for middle income countries like Sri Lanka.
"We argued that the government could have perhaps negotiated an Extended Fund Facility (EFF) given to countries facing serious medium term balance of payment problems due to structural weaknesses as in the case of Sri Lanka. But such negotiations, we noted, would have certainly included reforms that cannot be postponed and very well understood by the learned Secretary," he has added.
He has further noted, "In times like this, it is in the interest of everyone to accept reality and deal with it instead of attempting to pretend that we are doing so well that we are not only the wonder of Asia, but also the latest Breakout Nation!"