US $ 2.5 million cyber theft, bank fraud will undermine investor confidence, creditor trust: economist

Colombo, May 7 (Daily Mirror) - A top economist said that the US $ 2.5 million cyber theft and the bank fraud case will undermine investor confidence and creditor trust in Sri Lanka.

Making remarks during the RCSS (Regional Centre for Strategic Studies) Strategic Dialogue – 4 on the theme “A Global Economy in the Shadow of Middle-East War: Implications for Sri Lanka’s Debt” on May 4, Dr. Ganeshan Wignaraja, a leading economist, raised concerns about the possibility that external actors could refrain from committing capital to Sri Lanka under current conditions.

Commenting on the IMF programme, Dr. Wignaraja, Visiting Senior Research Fellow at ODI Global, London (formerly Overseas Development Institute), and Professorial Fellow at Gateway House, said Sri Lanka would even be compelled to go for another programme with the International Monetary Fund (IMF).

The IMF is a global lender of last resort for countries in an acute balance of payments crisis, but this comes with policy conditionalities.

Without it, the Sri Lankan people would have faced severe economic insecurity and crisis with no prospects. The deeper failure, he argued, is domestic, with a persistent culture of non-implementation, weak state capacity, and the absence of strategic decision-making having meant that known economic reforms are consistently not executed.

He also noted that alternative financing instruments, such as climate finance, which could mobilise at best $500 million, fall critically short of Sri Lanka’s debt obligations, and without access to international capital markets, no real development financing exists outside another IMF programme. He further pointed to governance failures, including the recent Treasury cyber breach and a bank fraud case, as actively undermining investor confidence and creditor trust, and raised concern about the possibility that external actors could refrain from committing capital to Sri Lanka under current conditions. Dr. Wignaraja cautioned that Sri Lanka may even have to consider an 18th IMF programme.