Gammanpila says country is in ‘debt trap’

‘Revival of tourism and foreign remittances not sufficient to overcome daunting challenge’

By Shamindra Ferdinando

Energy Minister Udaya Gammanpila, who is also the leader of the Pivithuru Hela Urumaya has contradicted the much repeated SLPP government claim that the global Covid-19 epidemic caused the current financial crisis.

Attorney-at-law Gammanpila emphasised that the ‘economic time bomb’ had exploded about five years earlier than he anticipated as a result of the Covid-19 eruption. The Minister went onto emphasize that the country was caught in a debt trap.

Minister Gammanpila said so at the inauguration of the National Trade Exhibition at the BMICH on Feb 06 with the participation of Prime Minister Mahinda Rajapaksa and Industries Minister Wimal Weerawansa.

The PHU is on a collision course with the SLPP over the legal challenge mounted in the Supreme Court in late last year against an agreement between Sri Lanka and the US based Company New Fortress Energy.

Declaring that he was not sure whether those responsible had really understood the grave crisis the country was in, lawmaker Gammanpila warned that the economic crisis wouldn’t end even if Sri Lanka fully recovered from the pandemic.

The Colombo District MP said that the deteriorating crisis could be easily explained. The government lacked Rupees and the country experienced severe dearth of foreign currency.

Minister Gammanpila said that successive governments over period of several decades had taken loans without considering the financial sustainability. The minister explained that the national economy had deteriorated to such an extent, Sri Lanka was no longer in a position to ask for loans. Minister Gammanpila said that the government couldn’t take loan in Rupees or USD or settle loans that had been taken.

The minister pointed out that all governments should accept the responsibility for failing to address the widening gap in imports and exports. How could we bridge USD 8 b trade gap by way of foreign loans.

The PHU leader pointed out that in addition to USD 8 bn gap in exports over imports, the country had to pay as much as USD 7 bn in outstanding loans and interests. Therefore, the government had no option but to explore ways and means of raising USD 15 bn a year to cover the trade deficit as well as loans and interest repayments.

MP Gammanpila said that in calculating the annual approximate shortage of USD, he hadn’t taken into consideration the USD requirement for Lankans studying overseas, those seeking medical treatment and foreign visits. Therefore the actual shortfall was even bigger, the minister said, warning that the gap couldn’t be bridged even if the tourism fully recovered and the country managed to regain foreign remittances lost due to workers returning home with the outbreak of the pandemic.

The MP declared that Sri Lanka couldn’t overcome the crisis by obtaining more loans from China and India and by seeking IMF assistance.

The PHU leader declared that first of all the government should accept the country was in deepening crisis not due to Covid-19 but as a result of a death trap of its own making due to living beyond its means. The minister said that instead of deceiving the masses, the people should be taken into confidence and the gravity of the situation explained.

The minister said that leaders had to set an example by making sacrifices thereby helping the public to change their life styles.

Minister Gammanpila questioned the country importing fruits worth USD 68 mn, spices worth USD 127 mn, vegetables and grains USD 384 mn in 2021. When the issue was taken up at the cabinet, Minister Chamal Rajapaksa pointed out how USD 384 mn had been spent on dhal imports. The minister claimed that USD 850,000 had been spent on imported bees honey and USD 450mn?? on imported water bottles.