Ranil Hits Back

Ranil Hits Back

Sri Lankan President Denounces “False Propaganda” on Debt Restructuring

President Ranil Wickremesinghe has condemned what he described as “false propaganda” concerning the nation’s debt restructuring program, accusing both domestic and international individuals of spreading misleading information for political gain.

In a comprehensive address to Parliament on Tuesday, President Wickremesinghe highlighted Sri Lanka’s achievements in managing its debt crisis, portraying the successful restructuring as a milestone for the country. He emphasized the importance of the government’s policies and the need for unity among parliamentarians to ensure continued progress.

Key Achievements in Debt Restructuring

The President outlined significant strides made in the debt restructuring process, notably an agreement reached on June 26 with official creditors regarding loan repayments. This, he asserted, was a crucial step in restoring economic stability to Sri Lanka, which defaulted on its debts in 2022.

President Wickremesinghe detailed the government’s four-step plan to rebuild the economy, which includes securing extended credit facilities from the International Monetary Fund (IMF), collaborating with international experts to stabilize the debt, implementing policies to attract foreign investment, and aiming for a debt-free economy by 2048.

The President listed the following key points of the debt restructuring agreement:

A grace period until 2028 for repaying the principal loan.
Reduced interest rates, now set at 2.1% or lower.
Extension of the repayment period by eight years, until 2043.
Flexibility to gradually increase principal repayments, retaining USD 5 billion in debt service.
He stressed that the government has successfully completed the restructuring of foreign bilateral debts amounting to USD 10 billion and is now working on commercial debt restructuring, anticipating a swift conclusion.

Clarification on Misconceptions

President Wickremesinghe addressed several misconceptions circulating about the debt restructuring process, noting that some critics either misunderstand or intentionally misrepresent the complexities involved. He clarified that international practices do not permit outright debt write-offs for middle-income countries like Sri Lanka and explained the differences in debt restructuring frameworks between low-income and middle-income countries.

He also dispelled false claims regarding the total foreign debt and recent borrowing activities, emphasizing that no new loans have been obtained since the default declaration, countering the misinformation spread by certain political groups.

The President’s speech concluded with a call for collective dedication to the nation’s progress, emphasizing that the successes achieved so far are promising but require ongoing commitment from all sectors of society.

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