IMF urged not to insist on removal of subsidies on fuel

Colombo, June 20 (Daily Mirror) - A delegation of the Joint Opposition has requested the International Monetary Fund (IMF) representative in Sri Lanka not to insist on the removal of fuel subsidies, as it would inflict unbearable hardship on the people at this time.

The opposition delegation comprised former Minister Prof. G.L. Peiris, Wajira Abeywardana, Asanga Navaratne, Mahinda Amaraweera and others. According to the IMF arrangement with the government, fuel subsidies are to be removed.

According to the delegation, if all fuel subsidies are withdrawn, diesel prices are likely to increase by about 42 per cent and electricity tariffs by about 10 per cent. The overall cost of living is expected to rise by around 11 per cent from its current level.

The government has announced that the prices of medicines, including life-saving drugs, will increase. The public will therefore be subjected to intolerable strain, especially as the World Food Programme has stated that six million people are suffering from acute food insecurity. The World Bank estimates that Sri Lanka's poverty rate stands at approximately 24.5 per cent. This means that one in every four people is living below the poverty line, according to an opposition member.

The delegation told the IMF representative that the social welfare aspect is not receiving the attention it requires in the current context. They said greater attention should be paid to this area; otherwise, the IMF programme would fail to have a beneficial impact on the everyday lives of the people.

Asserting that IMF assistance consists of loans that carry interest obligations, they said the IMF has a responsibility to ensure that these funds are utilised for the intended purposes for the benefit of people.

"That means good governance. It is one of the pillars of the IMF programme. It cannot remain merely a principle; it must be implemented in practice," the member, who wished to remain anonymous, said.

The delegation also handed over a letter to the IMF outlining nine instances that it described as "a colossal waste of public funds". They said the IMF has a responsibility to ensure that public funds are properly utilised.

However, the joint opposition emphasised the importance of the IMF programme for economic stability.