News
NPP’s Strategy: Securing better deal with IMF, but no exit – AKD
By Rathindra Kuruwita
The National People’s Power (NPP) intended to secure a better deal with the International Monetary Fund (IMF) regarding the debt sustainability analyses (DSAs). However, if the renegotiation process dragged on or proved costly, the party would adhere to the existing DSA, NPP presidential candidate Anura Kumara Dissanayake said on Monday (16) during an Ada Derana political programme.
Dissanayake highlighted three salient points the NPP was planning to address. The first concern was increasing spending on social welfare. The IMF had set several parameters for Sri Lanka to achieve such as raising tax revenue to 15 percent of GDP, maintaining a primary surplus of 2.3 percent of GDP from 2025, and reducing the public debt-to-GDP ratio to below 95 percent by 2032.
“We are not opposed to economic targets,” Dissanayake said. “But while striving to meet these objectives, our small and medium enterprises collapsed, and living standards declined. We must consider the social impact of pursuing economic goals. We need to engage the IMF about social spending.”
He emphasised that only the NPP had openly declared that participation in rallies or canvassing for the party did not qualify one for government jobs or state subsidies. “We can say this because those working with us are motivated by social objectives rather than personal gain. When I mentioned tax cuts, many asked, ‘Can we afford this?’
People are no longer seeking subsidies; they want meaningful change,” he added.
The second issue the NPP seeks to discuss with the IMF, according to Dissanayake, is the proposed mechanisms to combat bribery and corruption. “We want to explain that laws and mechanisms alone are insufficient. Practical measures are needed to enforce these regulations, and we will require IMF assistance for that,” Dissanayake noted.
The NPP intended to negotiate with the IMF debt optimisation, questioning whether reducing the public debt-to-GDP ratio to below 95 percent by 2032 is an ideal target. “In Greece, this figure was adjusted after discussions with the IMF, and it’s crucial as debt restructuring negotiations rely on it. These are the three areas we are planning to discuss with the IMF,” he said.
Dissanayake also remarked that the DSA was formulated with inputs from Sri Lanka and questioned the accuracy of those contributions. He mentioned that Sri Lanka had already conducted negotiations with bilateral and commercial creditors based on the current DSA, setting the projected debt-to-GDP ratio at 95 percent by 2032. Agreements have been made with the Paris Club and Exim Bank.
“Some people wonder whether we would have to start from scratch if an alternative DSA is negotiated. We have an agreement on the policy framework with bilateral creditors, though not a final one. We believe there’s still room for quick negotiation, as there’s no final deal with ISB holders either,” Dissanayake explained.
He stressed that the IMF was concerned not only with Sri Lanka meeting set targets but also with achieving overall debt sustainability. “We are not coming into power to destabilise the country, but to develop it. If renegotiations with the IMF take too long and agreements fall through, we may have to stick to the current programme. Our approach is to work with the IMF to secure a better deal, not to withdraw from it,” he clarified.
The NPP will have to govern a country that had entered into an agreement with the IMF, Dissanayake said, adding that there are no alternative routes for debt restructuring. “We have put all our eggs in the IMF basket, and discarding it would be irresponsible. We must try, and I believe we can renegotiate. However, if the costs and time required are too high, we will stick with the current programme,” he stated.
COPF final report on USD 2.5 mn cyber fraud recommends action against all responsible
The US$2.5 million loss incurred during Sri Lanka’s foreign debt repayment to Australia was a clear case of a cybercrime and theft, Committee on Public Finance (COPF) Chairman Dr. Harsha de Silva told Parliament yesterday.
Presenting the COPF final report on the cyber fraud, Dr. de Silva said the incident amounted to a serious financial crime and called for a comprehensive investigation, by law enforcement authorities, to identify and prosecute all those responsible.
The report revealed serious governance, procedural and operational failures that enabled the fraudulent transfer of public funds, while recommending sweeping reforms to strengthen cybersecurity, financial controls and public debt management systems.
According to the report, officials of the Treasury and the Central Bank bore responsibility for governance lapses that contributed to the failures. It also highlighted the fact that the Ministry of Finance was operating an outdated Microsoft Exchange Server after security support had ended, while basic safeguards, such as multi-factor authentication, had not been implemented.
The COPF said suspicious payment instructions linked to debt repayments involving India, the United Kingdom, Germany and Belgium had also been detected, preventing further losses. However, the US$ 2.5 million fraud materialised only in the repayment transaction involving Australia.
The report has noted that officials had failed to verify lender email domains, relied on unverified email communications and lacked adequate internal controls, allowing the fraud to continue for months.
Although the investigation uncovered system-wide weaknesses across several institutions, only four mid-level Finance Ministry officials had been suspended so far, the report said.
The COPF has recommended a special audit of the foreign debt repayment process, strengthened cybersecurity measures across state institutions, updated financial regulations and improvements to public debt management systems.
by Saman Indrajith
News
Opposition signs no-confidence motion against Justice Minister for dereliction of duty over Negombo Prison deaths
Opposition Leader Sajith Premadasa, together with Opposition MPs, yesterday signed a No-Confidence Motion (NCM) in Parliament against Justice Minister Harshana Nanayakkara.The move comes in response to the unrest at the Negombo Prison, where both prison officers and inmates were killed.
Opposition members said the Minister had failed to fulfill his responsibility and accountability regarding their safety.According to the Opposition group, the NCM seeks to hold the Minister directly accountable for lapses in ensuring protection within the prison system.
The Attorney General yesterday informed the Supreme Court that the government has decided to review the legality of agreements entered into by the previous administration to hand over the country’s electronic visa issuance operations to private companies.
Additional Solicitor General Viveka Siriwardena, appearing for the Attorney General, made the submission when the Supreme Court took up the fundamental rights petitions filed by former MPs President’s Counsel M.A. Sumanthiran, Patali Champika Ranawaka, and Rauff Hakeem, challenging the previous Cabinet’s decision to outsource the e-visa system.
The petitions were heard before a three-judge bench, comprising Chief Justice Preethi Padman Surasena and Justices Achala Wengappuli and Arjuna Obeyesekere.
The Additional Solicitor General informed court that the current Cabinet had appointed a subcommittee to examine the legality of the agreements with the private companies and requested time to report on its findings, stating that the review was still underway.
President’s Counsel Sumanthiran, appearing as one of the petitioners, told the court that although the present government had indicated its intention to cancel the transaction, the petitioners wished to proceed with the case.
He noted that members of the current Cabinet had been named as respondents in the petitions.The Supreme Court directed the petitioners to issue notice on the members of the current Cabinet, named as respondents, and fixed September 29 for further proceedings.
History takes centre stage as Mandhana, Harmanpreet fifties steer India
Spain leave it late to book semifinal date with France
Showers will occur in the Sabaragamuwa, Western and North-western provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts
US$ 2.5 mn cyber heist exposes system failures
Opposition signs no-confidence motion against Justice Minister for dereliction of duty over Negombo Prison deaths
AG informs SC of e-visa agreement review
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