P
resident Wickremesinghe’s Address Following Bilateral Debt Restructuring: Full Transcript
Today (June 26), President Ranil Wickremesinghe addressed the nation in a televised speech following the successful signing of bilateral debt restructuring agreements with the Paris Club, India, and China.
Here is the full text of his speech:
“Today marks a significant milestone in our nation’s recent history, a testament to the relentless efforts and dedication we have invested over the years. We stand at a pivotal juncture where the fruits of our perseverance are beginning to manifest.
This morning in Paris, Sri Lanka finalized agreements with our official bilateral creditors. Simultaneously, in Beijing, we concluded another pivotal agreement with China’s Exim Bank. This is heartening news for all those genuinely concerned about our nation’s welfare.
Over the past two years, we have engaged in rigorous negotiations with our bilateral creditors, achieving considerable economic progress that bolstered our position at the negotiating table.
I extend my heartfelt gratitude to our creditors, including China and the Exim Bank of China, India, Japan, and France, who co-chaired the Official Creditors Committee. I also acknowledge the contributions of other committee members and the Paris Club Secretariat, whose support was instrumental in the success of these negotiations.
These agreements enable us to defer all bilateral loan installment payments until 2028. Additionally, we have secured favorable terms for repayment, extending the timeline until 2043.
Following the restructuring of our domestic debt in 2023, we have now successfully concluded negotiations for bilateral debt restructuring with foreign countries. Our next objective is to reach an agreement with commercial creditors, including International Sovereign Bond (ISB) holders, with discussions already underway.
The impact of these agreements on our economy cannot be overstated. In 2022, we allocated 9.2% of our GDP to servicing foreign debt. With these new arrangements, we anticipate reducing debt payments to less than 4.5% of GDP between 2027 and 2032.
Our government’s fiscal requirements, which stood at 34.6% of GDP in 2022, are expected to decrease by more than 13% during the period from 2027 to 2032 due to these agreements.
In April 2022, Sri Lanka officially declared its inability to meet its debt obligations, resulting in a halt to international business transactions and a loss of financial credibility. Projects funded by foreign loans were suspended, and developmental activities ground to a halt as a result. However, with this crucial milestone in debt restructuring achieved, opportunities now exist to revive these projects legally. Projects such as the development of Katunayake Airport, light railway systems, and expressways are set to resume, and new development initiatives are on the horizon.
The endorsement of our debt restructuring agreements by bilateral creditors reaffirms international confidence in Sri Lanka. Countries that previously refrained from engaging with us due to financial uncertainties are now willing to provide their support and endorsements.
Both agreements will be presented to Parliament, with our Prime Minister introducing them during a special session on July 2nd. I urge all patriotic members of Parliament to ratify these agreements in the best interest of our nation.
Our journey to this point has been arduous and challenging. Our ministers and officials have dedicated themselves tirelessly, supported by the patience and resilience of the majority of our citizens who have endured various hardships. Despite ongoing challenges, we have persevered.
While some have attempted to disrupt our progress, their efforts have been in vain. Moving forward, these detractors will bear the consequences of betraying their own country.
As our economy continues to improve, we are committed to making concessions that do not compromise our economic stability. By adhering to the right path, we aim to gradually alleviate existing challenges. Strikes and threats will not resolve these issues; only through unity and economic strength can we find sustainable solutions and secure further concessions.
When we assumed leadership of the country two years ago, I emphasized the enormity of the challenges ahead. I made it clear that these issues could not be resolved overnight, but required sustained effort and dedication.
At that critical juncture, I recalled Walt Disney’s words: ‘The way to get started is to quit talking and begin doing.’ With unwavering resolve, we embarked on a journey to revive our economy.
During the opening session of Parliament on August 3, 2022, I outlined a comprehensive four-step plan to rebuild our faltering economy:
1. Securing extended credit facilities in consultation with the International Monetary Fund and implementing fiscal discipline nationwide.
2. Collaborating with international financial and legal experts from Lazard and Clifford Chance to formulate a debt stabilization plan and negotiate agreements with creditors.
3. Implementing policies, regulations, and initiatives to attract foreign investment, strengthen the export economy, and promote a sustainable digital economy.
4. Aiming to transform into a developed nation with a debt-free advanced economy by 2048 through this comprehensive program.
Throughout this process, I have maintained transparency, regularly updating Parliament on our strategic roadmap. The successful implementation of the first three components of our four-pronged program validates the effectiveness of our approach.
Achieving such significant progress within two years, from a state of debt inability and near-bankruptcy, is a remarkable feat. Historically, countries facing economic crises similar to ours have taken much longer to achieve such positive outcomes. This achievement is a testament to our commitment and the efficacy of our initiatives.
We understood the gravity of the economic crisis and formulated solutions guided by vision, determination, and unwavering commitment. Our efforts have set us on a path towards achieving our fourth objective: transforming into a developed country by 2048.
Reflecting on our nation’s state in 2022, plagued by severe economic challenges, we can now observe:
– After six consecutive quarters of economic contraction, our economy resumed growth from the third quarter of 2023.
– Our foreign reserves, which had plummeted, recovered to USD 5.5 billion by April 2022. The strength of the rupee has increased, and bank interest rates have declined.
– Inflation, which soared to 70% in September 2022, has now been reduced to a manageable 0.9%.
– We achieved a surplus in the primary account balance, and for the first time since 1977, a current account surplus was recorded in our foreign account balance. These milestones underscore our successful shift away from bankruptcy through effective economic management.
The endorsement and support received from our official creditors for restructuring our debt have restored international confidence in our nation. This reaffirms that the path we have charted is not only correct but also endorsed internationally.
On that note, I extend an invitation to all political parties and groups to prioritize national interest and support the program presented to Parliament. While some parties have joined in this collective effort, others have chosen to criticize. It is essential to address these criticisms.
During President Gotabaya’s tenure, those who previously insisted that the IMF was the only solution are now asserting that the IMF should not be approached. Those who argued that economic improvements were futile amidst public suffering are now promising extravagant benefits upon assuming power.
Certain individuals engage in populist or partisan rhetoric, displaying a limited understanding of economic and political dynamics beyond elementary levels. Despite my consistent efforts to highlight the gravity of our challenges and propose solutions since assuming office, some individuals still fail to grasp the seriousness of our situation.
Since assuming leadership, I have implemented numerous measures to rebuild our nation. It has taken nearly two years for some to acknowledge the wisdom of those decisions. It may require additional time for them to recognize the validity of the current steps I am undertaking.
Nevertheless, those who persist in empty rhetoric will continue to do so. Allow me to clarify an important point: Sri Lanka has sought IMF assistance on sixteen previous occasions, each ending in failure. Why? We consistently failed to meet the conditions set, neglected our commitments, and lacked financial discipline.
This marks the first instance in our nation’s history where an IMF program has been successfully implemented. Previously, in sixteen instances, we approached the IMF not from a position of inability to repay debts, but as a country facing bankruptcy. Leading this successful endeavor to seek assistance fills me with satisfaction.
However, our journey does not end here; this is only a juncture in our journey. We should start anew from here. We have received international assurances, and we have once again gained international trust. We should make use of this and forge ahead towards a developed economy. We should achieve complete success, ensuring that our country never again finds itself in need of IMF support. This objective drives our efforts to establish a robust and disciplined advanced economy that can sustain itself independently.
To achieve this, my cabinet, our government, and I are diligently working and demonstrating tangible results. In contrast, some critics from various political groups appear more focused on gaining power. These groups, eyeing future electoral victories, have already envisioned presidential appointments and speculated about cabinet compositions. Reports suggest some individuals are even contemplating familial succession within ministerial positions.
How many among these aspiring leaders have misled the nation with false promises and press conferences? The falsehoods propagated about the accomplishments I highlight today are now exposed for what they are—a fabrication.
Why do they react with such disdain to our nation’s achievements? Why do they view good news for the country as inauspicious? Why do they seek to capitalize politically on every development? Their actions reveal a culture of opportunism, driven solely by ambitions for personal gain and political positioning.
While they vie for presidential positions, we remain steadfast in our commitment to the country’s development and progress. Their dreams revolve around titles and accolades; ours are anchored in advancing the nation.
They strategize to divide ministries; we strategize to advance the nation. They traverse Sri Lanka seeking power, visiting schools and traveling the world in relentless pursuit of authority. Meanwhile, I dedicate my days and nights to serving the country, addressing the needs of our people, and launching economic strengthening programs. I engage globally to garner international support for our nation’s development.
