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Public service to be slashed for IMF loan?

07 Dec 2021

  • Govt. officers to protest alleging moves afoot
BY Buddhika Samaraweera The Sri Lanka Government Officers’ Trade Union Association (SLGOTUA) has alleged that the Government is preparing to curtail the public service in order to obtain a loan from the International Monetary Fund (IMF), and will hold a protest tomorrow (8) near the Parliament roundabout, while all public servants who are members of the SLGOTUA will apply for leave and not report for duty on the same day. Speaking to The Morning yesterday (6), SLGOTUA National Organiser B.A.P. Basnayake claimed: “We have come to know that the Government is going to curtail the pensions of public servants and that there are plans to curtail the public service as a part of a plan to obtain credit facilities from the IMF. We are compelled to believe that there is truth to these reports when considering the recent statement made by Finance Minister Basil Rajapaksa that the public service is a burden to the country.” He further claimed that there are already vacancies in almost all public institutions and that the Government is preparing to curtail the public service in such a backdrop. He said that vacancies have been created especially for grama niladharis, development officers, and management service officers islandwide. A staff team from the IMF representatives are scheduled to visit Colombo from today (7) to 20 December to conduct the 2021 Article IV consultation with Sri Lanka. Under Article IV of the IMF’s Articles of Agreement, the IMF holds regular bilateral discussions with all member countries to review economic developments and policies; following approval by the IMF management, the IMF’s Executive Board discusses a staff report based on these discussions. The Morning learnt last month that while Minister of Energy Udaya Gammanpila has proposed that the Government seek IMF support, Minister of Trade Dr. Bandula Gunawardana, Minister of Water Supply Vasudeva Nanayakkara, and Minister of Finance Basil Rajapaksa opposed it, claiming that the Government would not be able to persuade the people to accept the IMF’s conditions. However, the IMF told The Morning on 24 November that its staff team stands ready to discuss options with the Sri Lankan Government but has not received a request for financial support from Sri Lanka recently. Despite the SLGOTUA’s claim, last month Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal reiterated that Sri Lanka would not seek IMF assistance. “We have sought IMF assistance in 2009 and 2010. We, certainly, do not have any issues in going to the IMF if really required to do so. The reason why we have chosen not to seek their assistance is that our international sovereign bonds (ISBs) shot up to $ 15 billion by mid 2019 from a mere $ 5 billion in 2014. However, the gross domestic product (GDP) did not proportionately increase. As a result, we have begun looking for alternative financing options and that is what the IMF wants too. That is what they call ‘debt restructuring’,” Cabraal added. He further noted that if they are to seek IMF assistance, the Fund might require the Government to depreciate the Sri Lankan rupee, increase interest rates, cut down the number of public servants, slash pension schemes, and sell state properties, which is a reform agenda the Government is not willing to comply with at the moment. Finance Ministry and Treasury Secretary S.R. Attygalle was not available for comment on the SLGOTUA’s allegations. The Morning reported yesterday that more than 700,000 state sector employees attached to the SLGOTUA are to engage in a one-day strike tomorrow, claiming that the Government has not yet responded to their request to increase the salaries of public servants as a remedy to the rising cost of living (CoL). Speaking to The Morning on 5 December, Basnayake said that there would also be a protest on the same day near the Parliament roundabout with the participation of public servants representing a number of sectors. He further said that the SLGOTUA has made requests to President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, and Finance Minister Basil Rajapaksa on five separate occasions to increase the salaries of all public servants as a solution to the rising CoL, but to no avail.

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