IMF or no IMF, Sri Lanka has expertise to tackle economic issues - Cabraal

Sri Lanka will not seek IMF assistance and their economic restructuring programme for debt servicing and economic reforms as the country is already implementing a publicly-backed plan.

Such a pragmatic plan has been devised by Central Bank (CB) experts who are very capable of handling all sectors of the economy, CB Governor Ajith Nivard Cabraal emphasised at a media conference in Colombo on Thursday.

“We have our own experts highly capable and more accountable to manage debt servicing and economic restructuring; we don’t need foreign expertise to suggest restructuring state-owned enterprises, devise formulas for fuel and electricity tariffs or sell land while pruning public sector and welfare activities,” he said.

A home-grown solution with proper discipline can bring more benefits to the country; he pointed out adding that the Central Bank staff consists of 30 experts with doctorates (PhD's) and over 200 other members with master’s degree to provide a very good credible economic analysis and maintain economic and price stability.

The government will service all its debts on time without default adopting a suitable debt restructuring programme and increasing non- debt inflows as a main strategy, he said.

The reliance on International Sovereign Bonds ( ISBs) will be replaced with Government- toGovernment loans, central bank to central bank swaps, securitising remittances and other foreign exchange inflows, the Governor said.

The other options are increasing the value of exports, monetisation of identified assets and remittances and see that export earnings end in cash so that there would be new inflows into the overall system.

If Sri Lanka tourism inflows and remittances recover, then the country would be able to achieve an economic growth of 6 per cent next year, he added.

In response to a Business Times query regarding an upcoming Article

IV mission to Colombo, IMF’s mission chief for Sri Lanka Masahiro Nozaki in an email statement disclosed that the IMF has not received a request for financial support from Sri Lanka recently, but the staff stands ready to discuss options if requested.

A staff team from the IMF is scheduled to visit Colombo during December 7– 20 to conduct the 2021 Article IV consultation with Sri Lanka.

Answering a question raised by the Business Times, Mr. Cabraal said that the IMF Extended Fund Facility programme is not in existence now and Sri Lanka could not avail of the last disbursement under the EFF, amounting to SDR118.550 million, equivalent to around US$200 million.