- SL reaches agreement with official bilateral creditors on external debt worth $ 10 b
- Deal enables SL to defer all bilateral loan instalment payments until 2028 and repay all the loans on concessional terms, with an extended period until 2043
- Signals it as encouraging news for those who genuinely care about the country’s welfare and move reaffirms international confidence in Sri Lanka
- Says transformation from a state of debt inability and near-bankruptcy marks a remarkable milestone
- Expresses confidence of reaching agreement with commercial creditors soon
- Agreements with official creditors to be tabled by Prime Minister on 2 July at a special session
- President urges support from all patriotic members of Parliament to move forward with him in national interest
- Stresses future does not merely belong to him but to the country and the children
President Ranil Wickremesinghe last night declared that Sri Lanka has won following the country reaching a final agreement with official bilateral creditors on external debt worth $ 10 billion on Wednesday.
“This is indeed encouraging news for those who genuinely care about our country’s welfare.
Sri Lanka won!” said the President emphatically. His reference to good news coincided with a multi-media campaign that began two days ago with a similar message.
“In 2023, we successfully completed the restructuring of domestic debt. Now, we have also successfully concluded the bilateral debt restructuring with foreign countries. Our next objective is to reach an agreement with commercial creditors, which includes International Sovereign Bond (ISB) holders. By continuing on our current path, we are confident that we can achieve this agreement, and discussions are on-going,” the President said.
The President described the agreements reached yesterday as a “significant milestone” and will provide “significant relief to our economy.”
“With these agreements, we will be able to defer all bilateral loan instalment payments until 2028. Furthermore, we will have the opportunity to repay all the loans on concessional terms, with an extended period until 2043,” revealed the President.
”In 2022, we spent 9.2% of our gross domestic product (GDP) on foreign debt payments. With the new agreements, it will pave the way for us to maintain debt payments at less than 4.5% of GDP between 2027 and 2032,” he added.
The Government’s annual gross fiscal requirement was 34.6% of GDP in 2022. Due to these agreements, this requirement will decrease by more than 13% by the period of 2027-2032.
The President extended his gratitude to creditors, including China and EXIM Bank of China, India, Japan, and France, who co-chair the Official Creditors Committee and other members of the committee and the Paris Club Secretariat for their support in making these negotiations successful.
Wickremesinghe recalled that in April 2022, Sri Lanka officially declared its inability to meet its debt obligations. “Following this declaration, international business transactions with Sri Lanka came to a halt. No country is willing to engage in financial relations with a nation that is bankrupt and unable to pay its debts. Consequently, we were unable to secure loans or even obtain letters of credit,” he said.
Following yesterday’s breakthrough, the President said the international confidence in Sri Lanka is reaffirmed. “The global community, which previously refused to accept our letters of credit, is now prepared to grant us a certificate of confidence,” he said.
“Achieving such significant progress within two years, from a state of debt inability and near-bankruptcy, marks a remarkable milestone. Historically, countries facing economic crises similar to ours have taken much longer to achieve such positive outcomes. This achievement stands as a testament to our dedication and the effectiveness of our initiatives,” the President said.
He assured that both agreements entered into yesterday will be presented in Parliament by Prime Minister Dinesh Gunawardena on 2 July at a special session. He urged all patriotic members of Parliament to ratify these agreements.
In his remarks the President also emphasised that a few individuals attempted to disrupt the country’s progress and continue to do so, “but they have not succeeded in halting our journey. In the future, these detractors will face the shame of having betrayed their country.” “I believed in my ability to save our country and its people from the economic abyss. I had a comprehensive work plan and a deep understanding of the strategies that other nations had employed to emerge from similar crises. Furthermore, I had faith that with my planned policies and dedication, the economy could be revitalized.”
Wickremesinghe recalled that he extended an invitation to all political parties and groups to prioritize the national interest and support the program he presented to Parliament in August 2022. While some political parties have responded positively and joined me in this collective effort, others have chosen to criticize. It is pertinent to address these criticisms.
“During President Gotabaya’s tenure, those who previously insisted that the IMF was the only solution are now asserting that the IMF should not be approached. Those who argued that economic improvements were futile amidst public suffering are now promising extravagant benefits upon assuming power. Certain individuals engage in populist or partisan rhetoric, displaying a limited understanding of economic and political dynamics beyond elementary levels. Despite my consistent efforts to highlight the gravity of our challenges and propose solutions since assuming office, some individuals still fail to grasp the seriousness of our situation,” the President said.
“Sri Lanka has sought IMF assistance on 16 previous occasions, each ending in failure. Why? We consistently failed to meet the conditions set, neglected our commitments, and lacked financial discipline. This marks the first instance in our nation’s history where an IMF program has been successfully implemented. Previously, in 16 instances, we approached the IMF not from a position of inability to repay debts, but as a country facing bankruptcy. Leading this successful endeavor to seek assistance fills me with satisfaction,” the President emphasized.
”Given this context, I pose a crucial question: Will you move forward with me, who comprehended the problem from its inception, offered practical solutions, and delivered results? Or will you align with those grappling in the dark, still struggling to grasp the issues? Will you stay the course towards a brighter future for yourself and the nation? Or will you opt for a different path?” the President posed a query apparently to his political opponents and detractors at large.
“We are all aware of the perils of veering off course or choosing the wrong path. Therefore, make the right decision. You have the full right and freedom to make that choice,” stressed Wickremesinghe who is widely considered to run for the upcoming Presidential election.
“The future does not merely belong to Ranil Wickremesinghe; it pertains to the country, to your future, and the future of our children. In just two years, without a parliamentary majority, without my appointed Government officials or ministers, I successfully elevated our country from bankruptcy and economic turmoil to a position that astonished the world,” stressed President Wickremesinghe. See Page 4 for the full speech of President Wickremesinghe.
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