Sri Lanka has sought the assistance of the International Development Association to get concessional financing as the nation can no longer afford commercial borrowings, President Ranil Wickremesinghe said today.
“We have requested the International Development Association to assist us to get concessional financing as Sri Lanka currently lacks credit worthiness to borrow on market terms from World Bank or any other institution. Countries such as Egypt had followed a similar strategy when their nation suffered economic downturn in the past,” the President said while making a special statement in Parliament.
“We also seek US$ 1 to 2 billion as bridge financing from institutions such as Asian Development Bank and World Bank. We have already in a position to get US$ 500 million from ADB,” the President said.
“Sri Lanka’s economy will recover by the end 2023 while the rupee would also stabilize by that time. However we have to take steps by informing the public on the status of the nation. We will have to stop printing money. However it has been possible to steady the inflation and keep it at 69.7% in September. However it is essential to restructure state enterprises which run at a loss. Total losses of state enterprises such as Ceylon Petroleum Corporation (CPC), Ceylon Electricity Board (CEB) and Srilankan Airlines will exceed Rs. 4,000 billion by the end of this year. We cannot make the people bear this huge burden anymore. We have already embarked on restructuring these enterprises,” he stressed.
“We also have to increase the tax revenue to 14% of GDP. It is currently 8% of the GDP,” he said.
Focusing on his recent foreign tours, the President said he strove to get maximum benefit for Sri Lanka during the meetings he had, “I strove to get maximum benefit to Sri Lanka by meeting state leaders from UK, Japan and the Philippines, representatives from international organizations and foreign ministers. It is less time-consuming and cost effective to meet world leaders that way,” he said (Yohan Perera and Ajith Siriwardana)