SL’s usable foreign reserves less than USD 50 million- Sabry

Minister of Finance Ali Sabry today informed Parliament that Sri Lanka’s usable foreign reserves are less than USD 50 million at present.

Speaking in Parliament today, Minister Sabry explained the current status of the economy.

The Minister said he recently read on a website that he had claimed the prevalent economic crisis will be solved within a month, adding that he must be mad to make such a ridiculous statement.

Minister Sabry said he is unsure if the current issues can be resolved within two years in the least.

The Finance Minister claimed it lies with each individual to help address the present crisis, and to work towards whether it will be resolved in two years or five to ten years.

Minister Sabry said if someone assumes that all issues will be resolved instantly through new appointments, it is not the case in reality.

The Minister said in 2019 Sri Lanka had USD 7 billion in foreign reserves, and agree that at a time that taxes should have been increased, the government slashed taxes.

He added the government committed a historical mistake through such a decision. Minister Sabry said the mistake must now be rectified.

He also accepted that the government should have sought the support of the International Monetary Fund a long time ago while the rupee should have been depreciated gradually a long while back too.

The Minister said Sri Lanka is facing the worst possible economic crisis since gaining independence, adding that certain Members of Parliament and the public are still unaware of the gravity of this situation.

Minister Sabry said failure to stringently manage the present situation will drive Sri Lanka to a very critical tipping point.

The Finance Minister noted Sri Lanka’s income in 2021 was Rs.1,500 billion through grants and taxes while expenses amounted to Rs.3,522 billion, double the income.

He said according to statistics, Sri Lanka had to settle Rs.1 trillion in interest alone last year with 2021 Rs.13 billion paid off while Rs.51 billion has been accumulated in debt.

The Finance Minister also claimed that reaching an agreement with the International Monetary Fund could take up to six months.

He said there are several ways that Sri Lanka can gain dollars, through the tourism industry which must be must uplifted, and increasing foreign remittances.

The Minister said Sri Lanka recorded USD 7.2 billion in foreign remittances in 2020 and USD 5.7 billion in 2021 adding that Sri Lanka runs the risk of this figure dropping to USD 3.3 billion in 2022.

Therefore, the Minister called on the opposition and Leader of the Opposition to support efforts to uplift the economy.

Minister Sabry said he is doing the job of a night-watchman at present, claiming he is not an economist.

Commenting on talks with the IMF, Minister Sabry said several steps can be taken, including providing short term solutions to address the economic crisis, bringing an end to queues, solving issues promptly, and gaining economic stability adding that the country must enforce mid and long term solutions.

He said the talks with the IMF were a success, adding that as part of debt restructuring Sri Lanka is in the process of selecting individuals as financial and legal advisers.

Minister Sabry said during the next Cabinet Meeting or by the following week he intends on appointing the officials in order to kick start debt restructuring.

He said the government has requested an emergency loan or RFI with India expected to extend support.

The Minister also revealed that a new Budget proposal, that will increase income taxes, will be tabled in Parliament in the near future.

He said the Budget proposal tabled last year is impractical in moving forward.

The Minister also commended the proposals tabled by the Sri Lanka Bar Association, and called for talks to be organised in this regard.

Minister Sabry said one government cannot solve this present crisis.

Commenting on Minister of Finance Ali Sabry leaving the House during the debate, Parliamentarian Harsha de Silva said the Minister’s true image is revealed.

MP de Silva said the Finance Minister is incapable of listening to the opposition’s response after criticising the former administration.

The Parliamentarian said Minister Sabry acknowledged delays in seeking assistance from the International Monetary Fund, imposing tax cuts, and delays in depreciating the rupee as historical blunders.

He said the opposition has been raising these concerns for a long time period.

MP de Silva said the Prime Minister failed to listen to the calls of the opposition adding the country would not be facing bankruptcy if the government heeded their calls.

The MP said the country’s debt was sustainable at the time adding however sustainability has collapsed.

MP de Silva commended the Minister of Finance for acknowledging the government’s shortcomings and attempting to right the wrongs.

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