IMF urges Sri Lanka to tighten monetary policy, raise tax to address debt woes
Sri Lanka must tighten monetary policy, raise tax and adopt flexible exchange rates to address its debt crisis, a senior International Monetary Fund (IMF) official said on Tuesday.
The country of 22 million people has requested loans from the IMF as it struggles to pay for imports amid crushing debt and a sharp drop in foreign exchange reserves that has fueled soaring inflation.
“We’ve had very good, fruitful, technical discussions on preparations for the negotiations with authorities over the past weekend and couple of days before,” said Anne-Marie Gulde-Wolf, acting director of the IMF’s Asia and Pacific Department, speaking at an online news conference.
Sri Lankan Finance Minister Ali Sabry was in Washington last week to talk to the IMF, the World Bank, India and others about financing help for his country, which has suspended payments on portions of its $51 billion in external debt.
“The requirement for fund lending will be progress toward debt sustainability,” Gulde-Wolf said, calling on Sri Lanka for measures to increase tax revenues to address critical spending needs.
“Monetary policy has to be tightened to keep inflation in check,” she said. “We see a need for flexible exchange rates.”
Gulde-Wolf did not reply to a question on the total value for any IMF package, nor the estimated timing of a conclusion to the negotiations with Sri Lanka.
Well Sri Lankans, there you have it! Time to wake up and smell the coffee! Majority of Sri Lankans have had virtually a “tax-free ride” all these years since independence, while enjoying free food, free hospitalization/medicare, free education, etc. but of course they are quick to always whine and dismiss summarily when we expat Sri Lankans point out the huge income taxes that we typically pay in the West when reminding them that true, we do enjoy a better living standard, but we do pay through our ears for it through taxes! When we point out that some of us pay 50% of our income earned in taxes to the state, they think we are joking! OK, now get ready for some real fun, shall we?
No problem paying higher taxes.
Unfortunately there will be more SriLankan flights to Uganda carrying printed material!
There is no transparency in our Governance; corruption is max.
For instance, only <10 members of parliament have declared their assets and liabilities despite being required by law to do so.
Even the Speaker has not declared; even the frail Hon Sampanth, Tamil Leader, has not declared; even the radical, Hon AKD has not declared !
The Taxpayers provide heavy support to our leaders in the form of staff to enable the leaders to conduct their office, properly and in accordance with the Law.
But our leaders engage their wives and relatives as support staff !!
He! He! He! Soon with the practical example, they will learn why R went to Chinese instead of the IMF for loans. Soon there will be nobody who criticised the government for not going to the IMF. I love what happened anyway, because, IMF will teach disciplines and put an end to promises subsidised food and fuel to get votes at the election and subsequent governments are forced to taw the line. Sri lankans will begin to live in the real world where people have to work very hard to survive.