The government has obtained an IMF loan amounting to US$ 2.6 billion, subject to several conditions, which would increase the burdens already imposed on the people, the UNP said on Tuesday (August 4).
The party’s Kandy District MP, Lakshman Kirielle told a news conference in Colombo, that according to the conditions stipulated, the loan couldn’t be used for the welfare of the people, but only to repay the massive foreign loans that the government had taken.
"The loan money has to be deposited in foreign Treasury Bonds and the IMF’s permission is required to transfer any money to Sri Lanka government. In effect, not even a toilet can be built for the people without IMF sanction."
Among other conditions, he said, was the reduction of the budget deficit. The IMF wanted the budget deficit to be reduced to 7%, which meant that the government should increase the revenue by Rs. 250 billion. "The only way this can be achieved, is by increasing taxes further. This would result in more hardships being imposed on the common people, who are already undergoing severe difficulties, due to the unbearable cost of living."
Kirielle, said the government boasted of being very transparent in its financial dealings, but it has not revealed the harsh conditions under which the IMF loan had been negotiated.
Drawing a comparison, he said, successive governments from 1948 to 2005, had borrowed only US$ 1.5 billion, but the ill conceived policies of the Mahinda Rajapaksa government, had resulted in Sri Lanka’s current debt burden exceeding US$ 5 billion. "Its disregard for fiscal discipline was clearly exhibited when the Fiscal Responsibility Act introduced by the UNP, was discarded. No economy can develop without fiscal discipline, but this government had bent all rules, just to cover up its sins, the cost of which unfortunately would have to be borne by generations to come."