Sri Lanka govt looking to distribute responsibility for IMF deal: G L Peiris

ECONOMYNEXT – The Freedom People’s Congress (FPC), a breakaway faction of Sri Lanka’s ruling party, has accused the government of trying to “distribute” responsibility for the country’s agreement with the International Monetary Fund (IMF).

FPC frontliner G L Peiris, who until recently was chairman of the ruling Sri Lanka Podujana Peramuna (SLPP), told reporters on Monday May 08 that the government broke convention to debate and pass the IMF deal in parliament to escape any blowback from the public.

There is no tradition of parliament approving an agreement with the IMF, nor is there a legal requirement for it, said Peiris.

“The government is well aware that this agreement is not going to be a very popular one when implementing it, due to certain conditions it contains,” said Peiris, claiming that a wave of popular dissent on the agreement is on the cards.

“That’s why they want to divide up the responsibility for this,” he said.

The MP added that the government was keen to pin the responsibility on parliament.

“What’s important here is not whether it was appropriate to go to the IMF. Once you go to the IMF, how do you engage in the negotiations? What do you agree to and what do you not agree to? The government didn’t do this right, at all,” said Peiris.

Other countries that had to approach the iMF, he said, made honest representations to the international lender with their specific needs and objectives in mind.

“Neither the Sri Lankan government nor its representatives want to do this,” he said, accusing the government of politicising the matter.

“The negotiations were not based on a national agenda and the people’s needs but with maximum benefit to a party and its leader in mind,” claimed Peiris.

Sri Lanka’s opposition parties, most of whom urged the then government in early 2022 to go to the IMF at the onset of the country’s worst currency crisis in decades, have now changed their stance on the deal that saw the IMF’s board approve a 2.9 billion US dollar extended fund facility (EFF).

Sri Lanka has had to agree to a painful but necessary reform agenda that includes debt restructuring, increased taxes and restructuring of state-owned enterprises (SOEs) as part of the deal, and trade unions and a number of opposition parties have already started to protest.

Some of these parties have also, somewhat contradictorily, accused President Ranil Wickremesinghe’s administration of attempting to take credit for the IMF programme, while also claiming that the government is also hesitant to take ownership of the deal.

MP Peiris’ Freedom People’s Congress is closely allied with other factions of the SLPP whose foreign policies are closely aligned with China. One of these allies, the National Freedom Front, has openly accused the United States of conspiring to topple the previous government headed by then President Gotabaya Rajapaksa.

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The leftist National People’s Power (NPP), led by the Marxist-Leninist Janatha Vimukthi Peramuna (JVP), has already taken up an anti-IMF position, likely anticipating some level of public discontent with the coming reforms.

The main opposition Samagi Jana Balawegaya (SJB) meanwhile appears undecided at best, but is confident of forming a government in three months.

Sri Lanka’s SJB no longer enamoured of IMF, promises new govt in three moons


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