Sri Lanka says uncovers Rs1.1 trillion hidden liabilities of Rajapaksa regime

ECONOMYNEXT – Sri Lanka’s government has uncovered liabilities worth 1.15 trillion rupees that had been hidden by the former Rajapaksa regime, making the debt burden that needs to be repaid worse than anticipated, Finance Minister Ravi Karunanayake said.

The government was now trying to find ways to repay the hitherto hidden liabilities, about 60 percent of which were foreign, by either raising taxes or reducing spending, he told a news conference.

“When we took over the economy we knew it was an absolute disaster but we never knew information would be concealed to this extent. This became known only when we took office,” he said.

“Even the International Monetary Fund did not know about these liabilities and has accepted that they were deceived by the former regime,” Karunanayake said.

“We are trying to repay this debt without imposing more burdens on the people,” he said. “We can do it by attracting more foreign direct investment, liberalising the economy and by repositioning Sri Lanka and integrating the country with the global economy.”

The IMF will send a forensic team to probe the hidden liabilities.

Most of the hidden government spending had been incurred in 2013, he said. Details would be given to the Cabinet of ministers and parliament, Karunanayake said.

It is not clear whether Karunanayake was referring to loans taken by state agencies under Treasury guarantees. At least one agency, Road Development Authority has no revenue of its own. Data already in the public domain show 564 billion rupees worth loans taken by various state agencies under Treaury guarantee from local and foreign lenders.

Karunanayake held key figures of the former regime responsible for incurring the hidden debt most of which involved deals without calling for competitive tenders or going through the normal procurement process.

They are former president Mahinda Rajapaksa as finance minister, his brother Basil who was economic development minister, defence ministry secretary Gotabaya Rajapaksa, the president’s son parliamentarian Namal Rajapaksa, Treasury Secretary P. B. Jayasundara and central bank governor Ajith Nivard Cabraal.(Colombo/March01/2016)

RK saying these things now is joke. We could have given him the first 6 months for speeches like this...not now.

sashimaal wrote:RK saying these things now is joke. We could have given him the first 6 months for speeches like this...not now.

Agreed

RK been a big wig and a person with deep pockets , could influence the party for important posts. I presume that is the main reason he was given the FM. ( right or wrong politics will be politics)

But at this rate I see he is slowly digging his own well if he keeps going on with 101 stories that did not realize and does not help to fix issues.

There is this story about the wolf and sheep header boy.


Some actions needs to take place ..soon. Else natural forces ( maybe in the form of internal pressure , people pressure, IMF pressure etc ) will come to play to replace the post by his own accord.

Where is mrs hidden money ask him to bring it back and pay liabilites,,
If we collect all ministers undeclared wealth we can pay that ,

Its the only way country forward

The IMF will send a forensic team to probe the hidden liabilities

So we believe IMF has the panacea for all our economic illness...

Let me quote from page 166 of How Asia Works ?

Thailand suffered the worst initial economic contraction of any country in east Asia. As soon as the IMF was called in, it insisted the government imbibe a drought of anti-spend thrift , anti-inflationary medicine it developed in Latin America in the 1980s. Since Thailand did not have a problem with inflated government budgets, expenditure cuts of around 1/5th and tax rises sent the economy into tailspin, contracting 14% of currency terms between 1996 and 1998. And the closure of 56 out of 91 NBFI institutions in 1997 left both good and bad borrowers without access to working capital . The IMF did not understood what is going on. Part of the problem was the agent need to come to terms with what a mess its a ' star pupil"  was really in. The Fund's prediction for Thai economic growth in 1998 shifted from 3.5% just after the crisis broke in August to -7% a year later, a reflection of how little the institution really knew about the country..