“Pause or delay in IMF program will bring Lanka back to square one”

Any pause or delay in the IMF program will bring Sri Lanka back to square one and complicate countries’ debt restructuring, said Chairman Chamber of Commerce Vish Govinndasamy at the sixth AGM of Sri Lanka Retailers Association (SLRA) in Colombo on Tuesday.

“The Government will have to meet KPIs every 6 months for the next 4 years in order to receive the next rounds of disbursements. This requires careful navigation of the different reform pieces around SOE, social transfer, monetary, and fiscal policy to name a few.”

It is noteworthy that for the first time in Sri Lanka’s history, Governance and addressing corruption vulnerabilities are part of the program.

“Considering all these nuances, the clear understanding is that Sri Lanka cannot be complacent about the fragile stability we have achieved, as it can easily be eroded if we do not stay on this path and implement credible reforms. Hence, the steps taken now by the government and private sector will determine how we emerge from our current challenges and signal the direction for the nation’s economy and the prosperity of its people. We need to fast-track much delayed reforms related to SOEs, energy and trade so that we can engineer a quick recovery, while debt structuring and leverage on the recently secured IMF program, as the foundation for this recovery.”

Vish Govinndasamy addressing the event

He recalled that all must understand that historical delays of these reforms led to the current economic situation and these mistakes should not be repeated.

Sri Lanka must use the present crisis as an opportunity to drive reforms similar to those carried out by South Korea and India. If these reforms are not done Sri Lanka will face a similar fate to countries like Argentina.”

He also said that the IMF program is a first step in the journey towards the country regaining credibility in international markets. Govindasamy said that the local private sector has over the years learnt to survive in the face of formidable challenges.

“It is now up to us, as the private sector, to stand together to preserve our enterprises and prepare our businesses for a growth mode as we emerge from the darkness. The SLRA and retail firms are vital engines of growth. It is an opportunity for the retail sector to forgo partnerships with foreign players and principals and encourage investment and collaboration with local players. He said that the SLRA has been a strong and effective advocate for the development of the sector.