A group of world-leading economists have expressed their views that Sri Lanka should once again suspend its external debt payments to deal with the devastation caused by Cyclone Ditva. A group of about 120 economists have made this statement. Professor Priyanga Dunusinghe of the Department of Economics at the University of Colombo says that the group is made up of left-wing economists and that many countries, including Sri Lanka, have previously destroyed their economies due to their advice.
The professor says that since Sri Lanka is a country that has lost the trust of the world due to its once-debt default, if it defaults on its debt again, it could have very serious consequences for the economy. He emphasizes that Sri Lanka’s economy cannot bear such an impact.
The professor says that we had to restructure our debt once due to the default, and it was a very difficult and long-term process, and it is very risky to go through it again. He also points out that it can take a lot of time. Expressing further opinions, Professor Dunusinghe said:
”It is absolutely wrong for Sri Lanka to go through debt restructuring again as suggested by the same group. Due to the measures taken by international lending institutions and international creditors following the default, Sri Lanka faced serious economic difficulties. Things got to the point where it was impossible to even open a letter of credit.
Going through debt restructuring again is tantamount to going through a difficult period similar to the situation during the economic crisis. After the debt restructuring, we expected to return to the international financial market and thereby achieve our goals of obtaining development loans from bilateral creditors and obtaining loans from multilateral creditors to accelerate development activities. Restructuring the debt again means postponing our development again.
Through debt restructuring, we postponed our debt to a low or even light level until 2028 or 2043. Once again, through debt restructuring, the debt and interest will increase by a very large amount and Sri Lanka will have to face a huge economic problem.
For a small country like Sri Lanka to deal with the international community in this way is like a small child playing with fire. Sri Lanka should pay attention to this situation. Restructuring the debt will make it impossible for us to get loans in the future without strict conditions and high interest rates.
We should ignore the advice of the World Bank Group, which has made this statement. They believe that printing money will solve the economic crisis. Instead of taking their advice, it would be better to follow the path we have reached with institutions such as the International Monetary Fund.