News
Harsha hints at Chinese hurdle in debt relief talks
By Saman Indrajith
SBJB MP Harsha de Silva said that he had asked the Gotabaya Rajapaksa administration to seek IMF assistance in 2020.
“At that time a U.S dollar was selling at Rs 200. The interest rates were around six percent. Inflation was around six percent. The situation is completely different today. Our interest rates are around 35 percent and the inflation is over 50 percent. Dollar sells at Rs 370. We have defaulted.”
No foreign nation or international institution had any faith in Sri Lanka, De Silva said.
“Now, we are begging the IMF to help us. The IMF will give us 2.9 billion dollars. It’s not the money that’s important but after we get the money other countries will think we are now following a viable plan to get out of the crisis. IMF and economic reforms are the two sides of the same coin,” he said,. When he suggested to the Rajapaksa administration to go before the IMF, the situation was simpler, de Silva said.
Then it would have been an agreement between Sri Lanka and the IMF.
“Now there are three parties, simply speaking. The government, the IMF, and our lenders. There are bilateral lenders like Japan, China, and India as well as private entities that have bought our bonds. If we can’t come to an understanding with the official creditors, the IMF can’t give us money. That’s their policy,” he said.
India has given a written financing assurance to the IMF in support of Sri Lanka’s economic revival. China has not yet given this assurance, the SJB MP said.
“China has not given these assurances because of two reasons. China says Sri Lanka has promised the IMF that by 2032, the country will reduce the debt ratio, compared to the GDP, to 95 percent. It is now around 140 percent. They are just not ready to accept we can do that,” he said.
Sri Lanka’s Gross Financing Need is 31 percent now, he said. This is one of the highest percentages in the world, de Silva said.
“We have told the IMF that we will reduce this to 13 percent by 2027. China also doesn’t think we can do that. They say they don’t really buy into the debt sustainable analysis that Sri Lanka and the IMF have agreed upon. Their EXIM bank has given us a letter saying that they will provide relief for another 10 months. During that time the two sides can talk about how debt can be restructured,” he said.
However, recently it was reported that there was a loophole that the IMF can use to give us money, De Silva said. That is, if one major lender does not agree on debt restructuring, the IMF can give a loan if the disagreeing lender has loaned less than 50 percent of total bilateral debt, he said.
“Chinese loans were about 53 percent of total bilateral debt. So by considering loans by EXIM bank as bilateral loans and by recategorizing loans by China Development Bank as commercial loans, we have reduced Chinese loan percentage to about 49 percent of total bilateral debt. The government is trying to use that loophole and access IMF money. However, on Wednesday the IMF said that they need Sri Lanka to come to an agreement with China. So this is where we are,” he said. .
Text and Pic by Priyan de Silva
Director General of the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) Ranga Dissanayake has questioned whether some promises contained in the National People’s Power (NPP) manifesto, A Thriving Nation – A Beautiful Life, could be fulfilled even if the government wanted to implement them.
Dissanayake raised the issue during a discussion following the release of the third biannual report on manifesto monitoring by the March 12 Movement, at the BMICH, on Wednesday.
He questioned whether the report had taken into account legal and institutional constraints affecting the implementation of certain pledges.
Citing the proposal to establish Anti-Corruption Investigation Offices in each district, Dissanayake said such offices could be established only with the agreement of CIABOC and that amendments to the Anti-Corruption Act would be necessary.
He also referred to the pledge to abolish the Executive Presidency, noting that successive governments had made similar commitments since 1994. He questioned whether there had been adequate consideration of where the powers vested in the Executive President would be transferred if the system were abolished.
On the proposal to establish a Public Prosecutor, Dissanayake questioned whether the Government intended to maintain the office alongside the Attorney General, who currently performs prosecution-related functions.
Executive Director of the Institute for Democratic Reforms and Electoral Studies (IRES) Manjula Gajanayake said Dissanayake’s remarks should be regarded as his personal views and not as Government policy.
Monitoring and Evaluation Consultants M. Thilakarajah and D.D. Mataharaarachchi presented the third-phase findings, covering January to June 2026.
The corruption case filed by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) against former Navy Commander, Admiral of the Fleet Wasantha Karannagoda, and Yoshitha Rajapaksa was set for a pre-trial conference by the Colombo High Court.
The case was taken up before the Colombo High Court on Thursday (17), when the accused, who are currently out on bail, appeared before the court. After considering the submissions made, the court ordered that the case be called for a pre-trial conference.
The CIABOC had filed the case against the accused, alleging that a corruption offence was committed by sending Yoshitha Rajapaksa, son of former President Mahinda Rajapaksa, for training at the Royal Naval College in the United Kingdom despite him not having the required qualifications.
The Colombo Magistrate’s Court yesterday directed the Inspector General of Police (IGP) to conduct an investigation and submit a report on whether a statement made by former Minister Wimal Weerawansa at a political rally, in Anuradhapura, on September 12, amounted to contempt of court.
Deputy Solicitor General Janaka Bandara, appearing for the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), made the request when a complaint filed against MP Namal Rajapaksa in connection with the Airbus issue was taken up.
Bandara also handed over to court a compact disc containing the relevant speech made by Weerawansa.
After considering the request, Colombo Chief Magistrate Asanga S. Bodaragama directed the IGP to conduct an investigation into the matter and submit a report to court.
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