Is the govt ready to cut down unwanted expenditure(IDPs burden) or is it going to slash expenditure which affects poor, which is 60% of population.!

IMF loan has created a cancer in the country’s economy: Dr. Kumarasinghe

By Yohan Perera

Senior Lecturer of the Management Faculty of the Sri Jayawardenepura University Dr. Janak Kumarasinghe said yesterday that the IMF loan has created a cancer in the Sri Lankan economy, though some conditions put forward may be positive.

Dr. Kumarasinghe, who addressed a public lecture organized by the Patriotic National Center in Colombo, said the IMF loan would only make the government want to seek more loans. He said the government is facing a challenge of stabilizing the country’s foreign reserves to create position where it could go for commercial loans to meet the import expenditure. He explained that a country should have enough foreign reserves to seek commercial loans. “The Government has no option but to go for commercial loans as other donor agencies such as the World Bank only provides loans for development projects,” he pointed out.

He further explained that the tax burden would increase adding more burdens on the people in addition to pushing the country even more into an abyss where the country’s total debt has now reached 87 percent of GDP.

Referring to conditions put forward by the IMF he said one has to see how they are going to be met. One condition he said is expanding the tax structure. Is the government going to introduce more taxes?” he asked.

With regard to cutting down expenditure, which is yet another condition put forward by the IMF, he said it has to be seen how expenditure is going to be cut. “Is the government ready to cut down unwanted expenditure or is it going to slash expenditure in a manner which affects the poor, which is now 60% of the population. “This condition put forward by the IMF would be a positive one if unwanted expenditure is cut,” he noted.

He also pointed out that this would be difficult for Sri Lanka considering the characteristics of its open economy. In this aspect he explained that country’s such as USA and Japan maintain an open economy wherein there is some state control, whereas the Sri Lankan economy is more open. Citing an example, he said it is prohibited for a person to take in more than 2kg of rice when he is visiting Japan.

Patriotic National Center Secretary MP Vijitha Herath said the people should be aware and work together to defeat the economic terrorist that is coming into the country in the form of the IMF. “People got together to defeat the LTTE in the recent past and this should be repeated to defeat the economic terrorist, which is worse,” he said.
DAILYMIRROR.LK