Home » China’s rescue plan for SL economic crisis shattered by CB’s debt default

China’s rescue plan for SL economic crisis shattered by CB’s debt default


By: Staff Writer

Colombo (LNW): China’s plan to rescue Sri Lanka from economic crisis in 2022 has ben shattered following the declaration of bankruptcy by the Central Bank governor Nandalal Weerasinghe, national organization collective claim.  

Dr. Wasantha Bandara, a frontline member of the organization noted that China’s loan assistance in the pipeline at the time of announcing pre-emptive debt default has been vanished to  thin air by the disruptive action of the CB.   

He accused Weerasinghe of aiding and abetting measures taken by the then government as the deputy governor of the CB to raise over US$12 billion via the issuance of International Sovereign Bonds during the period of 2015-2019.    

Former CB Governor Ajith Nivard Cabraal stated that inflows of USD 3.8 bn materialised during his tenure of just over 6-1/2 months. He added that China has pledged  $4 billlion and it was in the pipe line.

 He also says not a single dollar used to “defend” rupee, USD 1.8 bn provided for essential imports, USD 2.0 bn provided to ensure state banks’ solvency, USD 3.1 bn in debt settled in time, and USD 10.7 bn in pipe-line of inflows arranged before the announcement of pre-emptive debt dafult.

Dr. Wasantha Bandara accused Weerasinghe for encouraging the then government authorities’ toenact new foreign exchange act No12 of 2017 which has helped Sri Lanka’s businesses involved in the exports and imports trade in plundering US$53 billion.     

They have plundered US$ 36.833 billion (Rs 13.246 trillion) over nine years through intentional, dodgy invoicing, and stashing the foreign exchange earnings offshore and this amount has incresed to $53 billion now. .

Importers and exporters intentionally falsify the declared value of goods on invoices filed with Sri Lanka Customs, to make an average of US$ 4.093 billion (Rs 1.471 trillion) evaporate every year, an extensive investigation by Washington, DC-based Global Financial Integrity has revealed.

The state can size the savings and fixed deposits of high net worth tax defaulters while cut down their bond repayments equivalent to their massive tax evasion money amounting to RS 904 billion by 2023 according Inland Revenue department data.

Such bond holders are getting high interest rates for their investments and therefore the present value of the tax evasion money would be around Rs 2 billion by now.

The government would be able to save three times of the amount expected from the restructure of EPF and ETF by this massive tax recovery process and seizing the saving  and fixed deposit accounts of tax evaders.


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