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IMF Staff Level Agreements are not a matter any administration can afford to take lightly

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Professor Priyanga Dunusinghe

What can Sri Lanka do if IMF leaves the negotiating table?

Professor Priyanga Dunusinghe at University of Colombo queries

By Sanath Nanayakkare

We cannot expect that IMF will always be there to support Sri Lanka if the country begins tinkering with the set of economic policies and reforms it needs to implement in exchange for financial assistance from the IMF, Priyanga Dunusinghe, a Professor in Economics in the Department of Economics at the University of Colombo said on 24th August 2024.

He said so in response to a question posed at him during ‘Paththaren Eha’ discussion televised live on Independent Television Network (ITN).

“The Extended Fund Facility (EFF) programme depends on Sri Lanka’s economic situation and policy priorities, as well as the IMF’s technical assessment of the country’s financial and economic outlook. IMF Staff Level Agreements are very technical, so Sri Lankan authorities should not attempt to deviate from them for political reasons. What can Sri Lanka do if the IMF leaves the negotiating table”, he queried.

Further speaking he said:

“The IMF has made a careful analysis of Sri Lanka’s debt stock and has shown the country the way to manage its debt repayment under a ‘debt sustainability programme’. The macroeconomic targets were given to Sri Lanka by the IMF mainly based on this programme. You would have heard from time to time that IMF and Sri Lankan authorities came to Staff Level Agreements. Such an agreement is arrived at after lengthy debates and discussions between the two sides on technical points, fiscal situation and hard data. You asked me whether this agreement can be amended.

Yes, a new government coming to power can consider amendments to the agreement. But there arises the issue whether such amendments can be made without affecting the fiscal targets in the existing framework. For example, if tax revenue as a percentage of GDP is to be increased to 15.3% by 2027, it has got to be achieved, otherwise we won’t be able to continue working with the IMF programme. Alternate ways can be discussed as to how this tax share can be mobilized. But if someone suggests we abolish VAT and we collect taxes from tax evaders instead, the IMF knows that it can’t be done within the stipulated time frame. The IMF programme is crafted by experts based on data and analyses and timelines. If someone goes to the IMF and says the agreement needs to be amended, then the data which has already been used in the current programme would have to be proven erroneous.

Furthermore, the fact that we are entering into re-negotiations will mean that our credibility will be at stake. If that happens not only the IMF, the World Bank, the ADB, the bilateral and multilateral creditors also will begin to lose faith in us. Secondly, are there any countries in the world that amended IMF agreements and came out of their economic troubles? Greece attempted to do this, but it didn’t work. It is now said Greece will not be able to restore its pre-crisis level which prevailed in 2008, until 2031. This is the outcome of tinkering with the IMF programme. This is true for Argentina, Ecuador and other similar countries. So, attention must be paid to these international experiences when trying to make amendments to the IMF programme”

“Dr. Montek Singh Ahluwalia, a key player for over three decades in Indian economic reforms visited Sri Lanka some time back. When asked about amending the IMF agreement he said,” Trying to amend the agreement is imprudent. What you need to do is; show the IMF that you are acting upon achieving the given targets as quickly as possible because going into re-negotiations will reflect badly on staff level agreements and would have adverse consequences on Sri Lanka. Dr. Ahluwalia even said that such a move could draw flak from IMF officials.”

Professor Dunsinghe said that the IMF reform programme has been painful to the people, but it is now starting to bear fruit and urged Sri Lankans to move ahead on the difficult path to benefit from it.

“Within 2 years, Sri Lanka was able to come out of the crisis. Locally, this feat is not acknowledged due to political differences. But internationally, it is recognized as an unprecedented achievement. Sri Lankan people will have to wait until the plant becomes a tree and the tree gives its yield. We are an impatient nation that always rushed to eating the leaves before the fruits were borne. So, it will be useful to keep in mind that if we rush to eat the leaves again, we will miss the fruits.”



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ADB pledges over $1 billion annually to Sri Lanka in post-cyclone recovery push

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ADB President Masato Kanda meets Sri Lankan Prime Minister Harini Amarasuriya at ADB’s Manila headquarters.

Asian Development Bank (ADB) President Masato Kanda met with Sri Lanka Prime Minister Harini Amarasuriya at ADB’s Manila headquarters recently. The meeting reaffirmed the strong development partnership between ADB and Sri Lanka, with both leaders underscoring their commitment to post-cyclone recovery, inclusive growth, and advancing women’s equality.

“Sri Lanka’s resilience in the face of crises has been remarkable,” said Kanda. “We are committed to helping Sri Lanka rebuild after Cyclone Ditwah, while also investing in the country’s future by empowering women entrepreneurs and strengthening education and essential skills.”

Looking ahead, ADB is ready to provide more than $1 billion annually to Sri Lanka from 2026 to 2029. This financing will target macroeconomic stability, private sector-led growth, education and skills development, and resilient infrastructure. Key initiatives include a major digital transformation program to help unlock Sri Lanka’s digital economy, alongside support for its accession to the Regional Comprehensive Economic Partnership to deepen its integration into regional trade and investment networks.

During their discussion, Kanda emphasized ADB’s response to the devastation caused by Cyclone Ditwah. Building on emergency financing already mobilized, ADB is fast-tracking an emergency assistance loan to restore damaged infrastructure and support affected livelihoods.

With Dr. Amarasuriya serving as the keynote speaker for ADB’s International Women’s Day event, the leaders highlighted women’s equality as a cornerstone of inclusive development. Kanda noted ADB’s long-standing work as an implementing partner of the Women Entrepreneurs Finance Initiative, which expands access to finance, business skills training, and policy reform for women-owned enterprises. This partnership has helped drive lasting change, with Sri Lanka becoming one of the first countries to adopt the Women Entrepreneurs Finance Code at the national level in March 2025.

Dr. Amarasuriya also engaged in dialogue facilitated by ADB to advance Sri Lanka’s skills agenda, including discussions on referencing skills and qualifications with the Association of Southeast Asian Nations and on mutual areas of interest with the Philippines related to technical and vocational education and training.

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New Board appointed to lead Unit Trust Association of Sri Lanka

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The Unit Trust Association of Sri Lanka (UTASL) announced its new Board of Directors, appointing Jeevan Sukumaran of SENFIN Asset Management as President. The Board assumes leadership at a time of significant growth and resilience in Sri Lanka’s Unit Trust industry. Over the past five years, the number of unit holders has more than doubled, while assets under management have grown substantially, reflecting a clear shift in investor behaviour amid evolving economic conditions.

The 2026–2027 Board includes Vice President Kavin Karunamoorthy (First Capital Wealth Management), Secretary Asanka Herath (Lynear Wealth Management), Assistant Secretary Gayan De Silva (Capital Alliance), and Treasurer Wishan Perera (Softlogic Invest).

President Jeevan Sukumaran highlighted the importance of expanding the industry’s reach and increasing retail participation nationwide. “Whilst the Unit Trust industry has grown significantly in recent years, the next phase must focus on broadening retail investor participation across Sri Lanka’s different geographic/demographic sectors, with the key priority being strengthening investor education and awareness, particularly outside major urban centres. Improving financial literacy and expanding access to professionally managed investment solutions are essential to building long-term confidence and encouraging more Sri Lankans to invest in unit trusts.”

The new Board intends to build on the industry’s recent momentum by prioritising investor education, digital accessibility, and product innovation. Over the coming years, enhanced digital platforms are expected to make Unit Trust products more accessible, enabling investors across the country to participate in capital markets in a convenient and transparent manner.

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Indiya at Cinnamon Life enters a flavourful new chapter

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Colombo’s vibrant dining landscape has received a fresh infusion of flavour with the renewed culinary direction of Indiya, the signature Indian restaurant perched high above the city at Cinnamon Life at City of Dreams. With celebrated Indian chef Mukesh Joshi now steering the kitchen, the restaurant is presenting a menu that celebrates the depth, diversity and soul of Indian cuisine while subtly weaving in Sri Lankan influences.

Located on the spectacular Level 23 of the sprawling Cinnamon Life complex, Indiya’s setting itself feels like a prelude to the culinary journey that unfolds at the table.

The restaurant’s sweeping views of Colombo’s skyline provide a dramatic backdrop to a menu designed to take diners across India’s many culinary regions — from the fragrant biryani traditions of Awadh to the bold spice profiles of coastal kitchens.

At the heart of this new chapter is Chef Mukesh Joshi, a culinary craftsman whose career spans some of India’s most renowned hospitality institutions as well as prominent dining establishments in the Middle East.

Having honed his skills at luxury hotels such as The Westin and St. Regis Mumbai before leading kitchens in Dubai’s thriving Indian dining scene, Joshi is known for his ability to balance traditional flavours with contemporary finesse.

At Indiya, his philosophy is simple yet compelling: celebrate the authenticity of Indian cooking while creating dishes that encourage sharing and conversation.

The experience begins with a vibrant array of small plates that capture the playful spirit of India’s street food traditions. The crisp Sev Papdi Chaat offers bursts of sweet, tangy and spicy notes, while a generous Pakora Platter brings together an assortment of golden-fried fritters that evoke the comforting flavours of roadside tea stalls across the subcontinent.

From there, the menu moves naturally into the world of the tandoor — the clay oven that lies at the heart of many Indian kitchens. Among the highlights is the Hariyali Tandoori Gobi, where cauliflower is marinated in a fragrant blend of herbs before being charred to smoky perfection. Equally intriguing is the Rajma Galouti, a vegetarian reinterpretation of the famed Lucknowi kebab, delivering a melt-in-the-mouth texture that surprises and delights.

Seafood lovers will find much to savour as well. Jhinga Koliwada, a coastal delicacy of spiced prawns fried to a crisp exterior, offers a lively contrast to the delicately seasoned Rawa Fried Surmai. These dishes reflect Chef Mukesh’s confident handling of spice and texture — two essential pillars of Indian cooking.

No Indian dining experience would be complete without the ritual of sharing freshly baked breads, and Indiya’s basket arrives warm and inviting. Chilli Cheese Naan brings a playful modern twist to a classic favourite, while flaky parathas and stuffed Aloo Kulcha provide comforting companions to the restaurant’s richly spiced curries.

By Ifham Nizam

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