SJB Calls for Reforms with Relief in IMF Program

COLOMBO (News 1st); SJB Leader Sajith Premadasa has directly informed Senior IMF Mission Chief Peter Breuer of the need for reforms with relief in the current IMF program, according to SJB MP Dr. Harsha De Silva. 

The SJB highlighted several issues with the existing program, which they believe resembles an Extended Stand-By (SB) Agreement rather than an Extended Fund Facility (EFF).

Dr. De Silva explained the distinction between the two types of IMF agreements. 

"A stand-by agreement is a short-term program designed to address liquidity issues, while the EFF is intended for longer-term structural reforms," he said. "We pointed out that this looks like an Extended SB program instead of an EFF. This is essentially aimed at bringing stability to the economy by increasing state tax revenue."

He further elaborated on the nature of debt and growth, emphasizing that not all debt is the same. 

"There are two types of debt: dollar-denominated international debt and rupee-denominated domestic debt," Dr. De Silva noted. "Similarly, there are two types of growth: domestic growth without external competition and export-oriented growth. For instance, in 2012, during Mahinda Rajapaksa's tenure, growth was at 9%, driven by construction projects in Hambantota. However, this type of growth wasn't sustainable on an international scale."

Dr. De Silva stressed the need for an economic strategy that focuses on international, dollar-based growth to address the country's dollar-based debt issues. "The solution isn't rupee-denominated growth but rather attracting international investments that drive export-oriented growth. This structural change is essential for sustainable economic development," he concluded.