State Minister Cabraal refutes international media misreports
--------------------------------------------------------------------------------
State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal
addressing the media using Zoom Technology yesterday (03/09/2021) at the auditorium of the
Department of Government Information made the following statement dealing with ongoing
reporting on Sri Lanka’s economic situation by the international media.
My task today is to give you a brief idea about what’s taking shape in Sri Lanka, particularly in
the light of so many reports, international media reports as well as social media reports that
there is a grave danger in Sri Lanka with regard to food shortages, money shortages as well as
Covid becoming rampant and various stories like that. I think it’s necessary for us to also come
forward and give you the real story as to what is taking place in Sri Lanka, so that, people will
realize and know what is the actual situation in our country.
First at all food shortage that was referred to in several international media has to be dealt
with. I must say that we have ample food stock in this country for our all needs. There is
absolutely no shortage. We have enough and more foods for the foreseeable future and
beyond and if there is anyone who suggests otherwise that is simply not true.
So “A” We have foods. “B” we have ample stocks that will take us for the future. And “C” we
are also taking the necessary step to ensure that food will not be in any shortage in our country.
However at the same time we did notice certain instances of a few unscrupulous traders who in
the intension of making a vast bulk at this moment had been attempting to hold stocks in secret
manner and use it at the time when they could command higher prices. And that situation had
to be dealt with very quickly and that is what the government had done. Any responsible
government would have done that and we have done that. And in order to do so in a
framework of legality we have imposed certain laws which the President has authority do. And
that has been done. And we will not have any shortage for the future even in the commodities
that were made use of by certain unscrupulous traders to get some additional profit. So that
has been dealt with. Certain maximum prices have been set out and therefore we expect that
situation to be a part of history very quickly and no such situation would occur in the future as
well.
The second is about the allegation that there is a foreign exchange shortage. As well as we all
know Sri Lanka was a country that was depending on tourism. And we did have a challenge on
our hands when tourism was completely unavailable due to the Covid situation. And as a result,
we did have a challenge to deal with the inflows as well as with the reserves that we have, in a
manner that we can still maintain our services for the society and Commercial activities in a
stable manner. We did need some special balancing skills which we have used and in fact our
government had to impose certain restrictions on certain imports like for vehicles and that had
been done in order to ensure that we have sufficient funds available to meet our debt as well
as to ensure that the foreign exchange required for all our activities is available for our country.
However, all essential items are available and there is no way that anyone can say that there
has been any change in the life styles of people in their normal day today activities. Vehicles
have been to some extent curtail, but there again vehicles such as ambulances as well as
vehicles that are needed for construction activities have been permitted so that the overall
business activities as well as the commercial activities are not in any way threatened as life goes
on. In 2021 we have had a 4.3 % growth in the first quarter. So, in the year 2021 we would be
in a position to have reasonably modest growth like the other countries as well. So overall
Forex Situation is being handled very carefully. Because of the activities as of the central bank
as well as the government we are confident that the new inflows are created in order to ensure
that Sri Lanka can have a stable Rupee as well as a stable reserve position. Gradually we are
bringing that also in line and very soon there would be a very clear stability in exchange rates as
well as interest rates to ensure that Sri Lanka’s economic activities can go forward without any
undue apprehensions or obligations.
The third area is the Covid management, I saw several news media reports which dealt with
Covid management and some were not very accurate. So in order to put the records right we
want to say that almost 99 % of those who must have the Covid vaccination have got their first
jab and about 70% will probably get their second jab by the end of next week. And we are
hoping by the 15 th or so to have all people who should have been vaccinated to have been
completed with their vaccination. Sri Lanka will be able to face up this threat with a greater
amount of confidence and with that we can open up the country without any restrictions of
course the health restrictions still in place but to ensure that normal life could occur once again
as quickly as possible. I have also seen several news reports which referred to Sri Lanka’s need
to go to the IMF and seek support as well as debt to be supported by the IMF. We don’t have a
need to do that. We do have a respect to the IMF and we have worked with them in the past as
well. However, at this moment of time we have identified the needs as well as the
requirements of our economy and we are working that out in the best way possible in the
interest of all our stakeholders, the importers, the exporters, the lenders, the borrowers, the
banking sector and all stakeholders have been thought through. And we are confident with our
plan that we have put in place, as well as the new initiatives that we are taking, we would be
able to ensure that Sri Lanka will not have to default at any time in the near future or even in
the for seeable future for that matter. So therefore, we want to assure all those who may have
been to some extent concerned about these stories not to get worried about it. We will be able
to ensure that every single debt will be paid. Sri Lanka has an impeccable record and we
obviously want to maintain that and we have the necessary resources for that as well as the
commitment as well as the plans that will give us the opportunity as well as ability to make that
happen. So I want to reassure all those who may have been concerned as a result of these
reports that Sri Lanka would not be able to meet its debt commitments. At various times in our
previous discussions we have given the manner in which this to be done. I won’t go in to in
detail today but suffice to say that we have the ability to continue with our impeccable record
and to ensure that all creditors are being settled in the due time.
We have seen some reports even in the past saying that Sri Lanka will default in 2019 then
again, we had reports saying that we will default in 2020 and then we saw some other reports
will default in 2021 and now we are seeing reports saying that Sri Lanka will default in 2022 or
2023. These are all speculative stories that have been put out there in order to disturb the way
forward march of Sri Lanka and we are hoping that these will be put in to rest as quickly as
possible because we want to ensure that Sri Lanka goes forward with confidence and clarity.
We have also seen several reports which refers to debt from China, I want to also mention that
Sri Lanka’s debt to China is manageable, extremely well managed, and the debt has been taken
at reasonable rates. Very reasonable rates in fact. And sometimes much less costly than
international sovereign bonds and those all are long term types of loans that we have taken
and all are very well managed and paid back on time. There has been no stress specifically
because of Chinese debts or such amounts that has been lent by China and we want to assure
all creditors whether it’s Chinese debt or Japanese debt which is in fact actually more than even
Chinese debt, world bank debt, ADB debt which is also higher than Chinese debt that all these
debts which ever source it has come from that those will be paid on time. In fact the
international sovereign bonds that we have had are even higher than the debt we owe to
Chinese institutions and those debts are actually from US investors as well as European
investors, and Asian investors. So this myth that Sri Lanka is in a debt trap and that is caused as
a result of borrowing from China is actually not a true story and I would like to assure all
persons if they were to look at the debt profile of Sri Lanka as well as debt servicing cost as
well as the ability of Sri Lanka to repay they would come to the conclusion that Sri Lanka has
the ability as well as no single lender has had the ability to control Sri Lanka’s way forward in
any way.
Finally I would like talk about very briefly about the way forward. Yes Sri Lanka does have
certain challenges. We are the first to admit that. And that is why we have taken steps which
are of fairly serious nature in our way forward. We have had to spend a lot of money for Covid
Management. We spend at least 260 billion rupees directly and a lot more indirect in order to
ensure that Covid is well managed. We have spared no pains to ensure that people of our
country are provided with the best possible treatments as well as the vaccinations as well as
the overall ability to meet this challenge. However, we do realize that not everything could be
done in the march forward. There are gaps. We had to lockdown the country. That also puts a
lot of difficulty to certain sections of the population as well as businesses and we do recognize
that is a tough proposition. We have had to offer moratoriums in order to ensure that those
who are affected by the Covid situation and the lockdowns are protected. And that has been
the hallmark of the Covid as well as the economic management of our government. We are
proud of our records so far. It has been a tough uphill task. We have secured the necessary
vaccinations. We have administered it. In fact, yesterday we had the highest number of
vaccinations which was around 500 thousand vaccinations in a population of just about 20
million people. That’s a very high percentage of vaccinations in a single day. And all that has
been done with the dedication of our health authorities as well as our army forces as well as so
many other agencies of government and private sector who have contributed immensely to
bring about this result.
So, it’s a combined effort of our government as well as our people. And we believe that the
steps that we have taken will ensure that Sri Lanka will return to stability so that we can open
up the country bringing the foreign exchange that we really should be having from what we
have invested in tourism , and if we have that going most probably most of these difficulties
that we are experiencing right now with regard to stresses will be dealt with . So, as we go on
we seek the understanding of the international media as well. I know there are instances one
story can be blown out of proportion, exaggerated, and that goes to the rest of the world. And
people sometimes think that this is the norm in our country. Well it is not so. We invite anyone
who wishes to get additional information as well as understanding of our country, to come and
see for themselves, wherever possible, so that they would see for themselves the extraordinary
measures that are being taken by our government and the way in which people are reacting to
these measures.
The bulk of the people appreciate it. Vast majority of the people are supportive of it. And few
people who do have, I think, not the same agenda may not. But if they were to bring up these
we would like the international media as well as the social media to be conscious that,
sometimes not everything would be true and we would like you to check back with us as well.
That’s why we decided it was necessary for us to come forward in your presence and to talk to
you and tell you about the true condition of our country. And we do hope that these our
comments would also reach out to the rest of the world so that the true position will be
understood by everyone in the world as well.
Thank you very much.
