Courtesy The Daily Mirror

Many moneylenders have expressed support and we will be in a position to comfortably roll over our debt service commitment for 2020, senior economic adviser to the Prime Minister Ajith Nivard Cabraal said.

“If we could shrink the amount in our debt servicing package for 2020, which amounts to some USD 4.5 billion (Rs.810 billion), we could make the rupee stable and prevent a devaluation which will contribute to national economic stability,” he said.

Mr. Cabraal, who is also a former Central Bank Governor, expressed confidence that Sri Lanka would be able to reduce the debt commitment through negotiations as it was now on the right track in its economic and monetary policies under a new regime.

In order to achieve this objective, we are in negotiations with foreign entrepreneurs to invest their dollars in our treasury bills and bonds. It is likely that we will have to secure large-scale investors coming to Sri Lanka and invest in government securities. At the end of 2018, we lost Rs.34 billion investments in our treasury bills and bonds. Foreign direct investments by December 31, 2019, stood a hopeless USD 600 million. This drop reflects the loss of confidence in Sri Lanka among foreign investors due to un-pragmatic, shortsighted and ad hoc macroeconomic fundamentals of the Yahapalana Government.

The Gotabaya Rajapaksa Government has made amendments to these disastrous policies with tax reforms, bringing down interest rates and introducing a slew of relief and benefits to investors. Budget 2020 which the government expects to present after the April general elections will offer a more investor-friendly agenda. Encouraged with new economic policies, low-interest rate and strengthened rupee, I believe Sri Lanka will attract a considerable amount of FDI thus easing the debt servicing management and also reduce the debt service commitment in 2020 to lesser than USD 4.5 billion.

However, over the years, Sri Lanka has been able to maintain confidence among global financial agencies like the IMF, World Bank, ADB and international commercial banks by paying our debts on time and never to default,” he said. (Sandun A. Jayasekera)