IMF arrangements Dire consequences unless whole Parliament agrees

• First six months difficult, any medicine for recovery is bitter
• Trade integration with South Asia difficult over politics  
• Wants to look at ASEAN, RCEP 

By Yohan Perera  

While stating that there is no other way out than going for a staff level agreement with the International Monetary Fund (IMF), President Ranil Wickremesinghe yesterday said the whole parliament has to agree to work with the IMF and the House will have to take dire consequences if one party or a member goes against it.  

“Every member of Parliament has to agree to work with the IMF.  If one party or a member says we are not for it, then we have the right to question that person or party about their solution or their alternative. If one member of a party goes against the IMF, the whole Parliament has to face the consequence. You can’t say you are for half and not for the other half. You have to take the whole thing,” the President said, addressing the opening session of ‘Lets Reform Sri Lanka’ conference organized by ADVOCATA Sri Lanka in Colombo.  

“We have to go for a staff level agreement with the IMF. There is no way out. It was the IMF which came in and looked at reforms during the Thai crisis in 1997. It was the same in 2008 crisis,” the President added.  
“It may be bitter but any medicine for recovery is bitter. You have to take injections. We know the path we have to take. First we have the staff level agreement. Secondly and more important is sustainable debt. How are we to handle sustainable debt? When you look at official debt, are we getting caught up in the geo-politics of Asia and can we navigate our way?  Until you come to an agreement with the official creditors, it is not possible to go to the London Club. Next issue is, are we going to look at local debt that has far reaching consequences? The Financial advisors are looking at both debts,” he added.  
It is certainly going to be a difficult time. The first six months will be difficult. It will be a period which we have not faced before.  However, we have to go through it. If there are other proposals which are easier, then Parliament will have to look at both proposals and decide. There is no other way except to bite the bullet. Social, economic dimensions of the crisis are important before we go on to recovery. We have more than 6 million people malnourished and more are unemployed. How long will it last and how are we going to support them? We are setting aside some additional money but we find demands from companies who are doing well for salary increase. 
To implement reforms and restructuring you need stability. We have come to a stage of restoring stability. We cannot have a second incident. We have to look at the social dimensions. Even with the IMF there is an agreement which says the vulnerable will have to be looked after. We have to think of a target. And I would like the whole community to be looked after. I want you to look after the unfortunate,” he also said.  
Also the President stressed the need for high taxation, a highly competitive export oriented economy and thinking of going for new sectors such as renewable energy, logistics, sale of power to India. Seriously consider the use of nuclear energy in Sri Lanka to change systems, institutions. Modernize our agriculture and new system of education. “We have to look at trade integration in the region. 

We will not see trade integration in South Asia. There is too much politics for a trade agreement to take place in South Asia. We will have to go  for bilateral trade agreements with individual nations in South Asia. We have to look at the Association of South East Asian Nations (ASEAN) and Regional Comprehensive Economic Partnership (RCEP) which are large markets. Then we can go to Africa for trade pacts. We have to keep economic relationships with Europe, USA and UK.  We did not take into account the global situation when we introduced the open economy in 1977. Now we will have to do it. We cannot go back to the old economy,” he stressed. 

• Social, economic dimensions of the crisis are important before we go on to recovery. We have more than 6 million people malnourished and more are unemployed