Former President Mahinda Rajapaksa said today that the incumbent Government, having committed public funds to win elections, began the biggest borrowing spree in Sri Lanka’s history to meet the increased expenditure.
Issuing a statement, he said this Government had borrowed a total of around USD 19.5 billion in foreign commercial loans and well over six trillion in rupee loans from January 2015 to date.
He said following the recent increase in fuel prices, transport costs and the prices of goods and services had started rising.
The statement said:
“Fishermen are up in arms against the sudden increase in the price of kerosene by more than double the earlier price and the creation of a coupon system to distribute subsidized kerosene. In the midst of the agitation and unrest resulting from this fuel price increase, members of the government have been trying to justify it by saying that fuel costs were higher during the Rajapaksa Government. Today the price of a barrel of crude oil is around 70 USD. When I assumed office as President back in November 2005, it was around USD 73. It reached the highest point of USD 160 in June 2008 and even as late as August 2014, the price was over USD 103. It was only in the last three months of 2014 that oil prices started declining and by the time the Government changed in January 2015, it had gone down to USD 51 per barrel.
“From that point onwards, oil prices remained at a low level for three years. The prices kept declining and reached a low of USD 33 by February 2016. Thereafter oil prices increased slowly but even as late as October 2017, it was less than USD 55. It is only in the last few months that oil prices have steadily risen to reach the present level of USD 70. During the nine full years in which I ruled the country, we never had the benefit of low oil prices.
“The present price of USD 70 per barrel is quite low compared to the average price of crude oil during my government. Despite the highest global crude oil prices in history during those years, we not only won the war against terrorism which many people thought was unwinnable but also successfully concluded the biggest infrastructure building programme ever seen in this country since the colonial era. We were able to do all that while maintaining the fertilizer subsidy so as to shield farmers from the increasing prices of fertilizer. Despite high oil prices, my government was able to maintain the highest growth rates in Sri Lanka’s history and the per capita GDP increased threefold during my tenure in power.
The Yahapalana Government has had the benefit of very low crude oil prices and savings totalling more than USD five billion were made in foreign exchange over the past three years. Yet the economy has been in steady decline and development work ceased completely during that period. Last Saturday, the present finance minister said that if he had been holding that position in January 2015, he would not have given concessions to win ‘applause from the gallery’.
“Thereafter a UNP backbencher echoed much the same views. The reference made by the minister to ‘concessions given to win applause from the gallery’ was probably to the Rs.10,000 allowance for government servants and the reduction in the prices of fuel, gas and certain foodstuffs that were made by this government soon after winning the presidential election. All these were in fact pledges given in Maithripala Sirisena’s presidential election manifesto to win votes,” he said.