May 29, Colombo: Sri Lanka’s President Gotabaya Rajapaksa appealed to bilateral and multilateral lenders to assist developing and middle income countries such as Sri Lanka unconditionally focusing on human development to emerge from the COVID_19 fallout.
Addressing the virtual ‘High – Level Event on Financing for Development in the Era of COVID – 19 and beyond’ organized by the Prime Ministers of Canada, Jamaica and the UN Secretary General on May 28th, 2020, the President said in Sri Lanka loss of employment and livelihood is large and main channels of income have impacted the real economy.
“In Sri Lanka main transmission channels through labor income, export related income, tourism and connected services have impacted our real economy. Loss of employment and livelihood is large,” he said adding that whatever the difficulties confronted “our policy of people first” cannot be compromised as human development is the only asset valued most.
The President said as this is a crisis beyond the control of government and business, international support by way of unconditional budget support and compensatory debt deferment facilities for official debt will have to come from multilateral and bilateral official lenders so that private debt and equity markets will not lose confidence.
He noted that government’s priority to develop agriculture and food security, environment conservation, renewable energy resources, digital economy and digital governance, rural economy and poverty reduction, market access to people and business community, through improved connectivity to villages and creating green cities in line with the environment conservation strategies suffered a setback with almost 2 months lockdown in the economy.
Although restrictions were eased this week, as two months loss in the real economy and likely time line to reach normalcy will be longer, external funding must be “development centric” by all aspects of such facilities, President Rajapaksa noted.
“The profiling of official debt and medium term emergency budget support loans by each major bilateral and multilateral lenders will not only provide macroeconomic space to meet private debt obligations and relax trade and payments systems but also restore confidence among private sector creditors to re-energies growth and investments,” he said.
The President said he u underscored the need for development financing when he spoke with Chinese President Xi Jinping, India Prime Minister Narendra Modi and US National Security Advisor Robert O’Brien.
The fast actions by large bilateral, multilateral agencies without placing conditionalities among themselves and coming forward as development partners in respective developing and middle income economies is the responsibility of leading agencies and leaders of the world, he emphasized.