In response to the President’s speech on the IMF agreement, Dr. Harsha de Silva, an opposition MP, expressed relief that the government had obtained the approval of the IMF Board for the USD 3 billion facility. Dr. de Silva commended the President for convincing his majority SLPP government on the IMF program, who until recently had been opposed to it.
However, Dr. de Silva stated that the only political party that tabled their own plan out of the crisis was the SJB, which contained a detailed plan on how to come out of bankruptcy and set the stage for sustained growth. He criticized the highest marginal tax rate of 36% being applied at Rs 300,000 a month and called for massive economic reforms to increase government revenue from 8.5% to 15% of GDP.
Dr. de Silva noted that the IMF agreement was only a stabilization program and not a roadmap to develop the country. He urged extensive discussions on critical issues, including domestic debt restructuring and the impact of the economic crisis on low-income households.
In particular, he highlighted the issue of electricity tariffs, which have increased by over 1,100% in a short span of time for the bottom 25% of consumers. He suggested that the government should provide subsidies to those who need them, while the Electricity Board focuses on becoming profitable. He insisted Sri Lanka adopt a mechanism of targeted subsidies.
Dr. de Silva concluded by expressing his general agreement with Sri Lanka’s IMF program but urged further discussion to resolve the contentious issues. He emphasized the need to move away from traditional politics that advocate for providing subsidies to all or going on strike and suggested that Sri Lanka adopt a mechanism of targeted subsidies.