By Shamindra Ferdinando
State Finance Minister Lakshman Yapa Abeywardena yesterday said that an unprecedented Rs 10,000 salary increase to the public sector had caused severe difficulties against the backdrop of balance of payment crisis.
National List MP Abeywardena declared that the country couldn’t afford such a salary increase.
The SLFPer was addressing the media at the Information Department. MP Abeywardena alleged that the national economy had to pay a very heavy price due to unrealistic promises made by major political parties.
The minister faulted the government for offering Rs. 10,000 in the run-up to the last presidential polls against the UPFA proposing Rs 2,500.
The minister underscored the pivotal importance of major political parties reaching agreement on measures required to avert economic crisis. MP Abeywardena stressed the need to prevent political parties from exploiting the electorate to gain political mileage at the expense of the rivals.
Minister Abeywardena said that political promises meant to secure electorates had placed successive governments in extremely difficult postilions.
Responding to questions, Ministers Amunugama and Abeywardena admitted that Sri Lanka was now seeking IMF stand-by-arrangement, the country was under scrutiny. The media was told of the IMF asserting that massive loans obtained by various state sector enterprises such as the national carrier SriLankan Air Lines should be brought under the government debt. During the previous administration several institutions had been allowed to negotiate and obtain loans and now the new government was under obligation to take the responsibility for repayment.
Ministers said that IMF scrutiny was the norm before proposed stand-by-arrangement could be finalized.
Abeywardena said that unless Sri Lanka adopted stringent financial management measures the country could face a catastrophe. The bane of the country was irresponsible actions of those in power and mismanagement at massive scale, the minister said.
Dr. Amunugama said that IMF was now engaged in forensic audit in the run up to the agreement on the facility
Minister Amunugama said that successful conclusion of the IMF arrangement would pave the way for further assistance from the World Bank, the government of Japan and the Asian Development Bank.
Measures taken to ensure a stable economy would help Sri Lanka to secure IMF facility on relatively soft conditions, the minister said.