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Message: <blockquote data-quote="lkdood" data-source="post: 12443978" data-attributes="member: 92282"><img src="http://t0.gstatic.com/images?q=tbn:ANd9GcTj31Pte5TzN4Rt5t_00iQZ63P10oxUkKjOuLAG4XZn-FVmqoe7GQ" alt="" class="fr-fic fr-dii fr-draggable " style="" />UNP MP Dr. Harsha de Silva yesterday said that the UPFA government  has no clear foreign policy, and they also do not have a clear economic  policy for the country.  He said with the government of Sri Lanka and the IMF agreeing on 2  April on the way forward on the currently suspended standby agreement,  the government has had to admit that it took certain steps in the last  few weeks in order to ensure, the suspension of the bailout package was  removed.  Addressing the press in Colombo Dr. Silva said the country will  recall the recent depreciation of the country the increase of interest  rates and the upward revision of energy prices both in fuel and  electricity, all of those were in order to satisfy the IMF conditions.  “The government vehemently rejected that, and said it had nothing to  do with the IMF. However now based on the letter to the IMF signed by  Central Bank Governor Ajith Nivad Cabraal and deputy Minister of Finance  Geethanjana Gunawardena, they have admitted that they did three things  to fall back in line with the IMF’s conditions, so that they could  request the IMF to release the suspended tranches totaling $ 800  million”, he said.  He stated that according to a letter sent to the IMF by the  government, it says the depreciation of the currency, increasing of  interest rates and the increase in domestic petroleum and electricity  prices were done to satisfy the IMF, which the government has admitted  in the letter. “What we are saying is be truthful to the people of this  country, because you can’t hide these things forever. People are bound  to find out in a really nasty way. When prices escalate people are  unable to survive. We don’t want to advocate bad policies. The UNP has  been the party that always rescued Sri Lanka from trouble”, added Dr. De  Silva.  In 1977 when people were eating off garbage cans, or whether it is in  2001 when the  economy was in negative territory, he said it was always  the UNP that rescued this country. “We know what the economic policies  that needs to be implemented. We don’t tell people otherwise and have  been truthful to the people. What we need in this country is a market  economy. Therefore, we continue to warn the  government that by trying  to artificially control the macro economic variables, such as interest  rates and exchange rates, that they were creating a  huge problem for  themselves and for the people of this country”.  However, he added that those warnings were dismissed. But some months  later people realized that obviously the policies of the government  were absolutely incorrect. “Now the government is saying that the  increase in duties has nothing to do with the IMF. They are increased  because there is congestion on the roads. That too is a fabrication,  because the objective of the government is to somehow reduce imports. In  order to reduce imports increasing interest rates depreciating the  currency increasing fuel and electricity prices and obviously increasing  import duties, will all contribute towards reducing imports, so that  the net internal reserve position of the  central bank, which is a  technical term, which is the condition  the IMF has laid down on Sri  Lanka can be met. So to summarize just like the government of Sri Lanka  does not have a proper policy on its international affairs  as we’ve  seen over the last few weeks it does not have a policy of its own its  domestic economic affairs either. Whatever the IMF says they will do as  they do not have a proper policy. Thereafter after sometime they will  try to renege on the agreement … then when they hit a brick wall, they  will go begging to the IMF again, and then when the IMF says do  something else they will do, and this cycle continues endlessly”.  Dr. de Silva added that the country is  only going sideways, and not  moving forward. “8% growth is peanuts, because if you look at the  studies done by IBS and others, they said that 2% growth was removed  because of the war. If there was no war you should anyway have a 2%  growth. Therefore, 6% normal growth and the 2% make up the 8%. Hence UBS  and others have indicated that the growth will fall to 6%. So if you  remove the 2% from the 6% you are down to 4%, which is going back to the  pre 1977 era”, he said.CT</blockquote>

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