Not missing the IMF’s ‘woods’

 Not missing the IMF’s ‘woods’

This week, the International Monetary Fund (IMF) publicly said that even though Sri Lanka has achieved considerable economic recovery, the country is not out of the woods yet. The IMF stressed that therefore, it is important to safeguard those hard-won gains.

The Morning 17 Sep 2024

The IMF’s statement comes in a context where the country is getting ready for a crucial Presidential Election. It is crucial not only because it seeks to elect the next Head of the State. It is crucial because this is the first Presidential Election that is going to be held following a plethora of socio-economic changes, mostly for the worse, that sparked a renewed discourse about a system change concerning the country’s politics and governance.

“With respect to the upcoming Presidential Election, this is for the people of Sri Lanka to decide. From the IMF's position, what we see is a programme that has made significant achievements, but that it is important to safeguard these achievements to enable the country to fully emerge from one of its worst crises,” the IMF said.

As the IMF has aptly pointed out, while the people hold the power to decide what the country’s political trajectory would be like during the coming few years, when we look at the bigger picture, there is an economic recovery programme that should not be conflated with politics. The IMF agreement has become a key topic of discussion on Election stages – while some want to abolish it, some propose to amend it. But, some, including President Ranil Wickremesinghe, express confidence that the continued implementation of the IMF programme would benefit the country. He is not wrong. The IMF programme is not only a set of proposals and recommendations. It is also an eye-opener that showed Sri Lanka a number of things that it did wrong, especially when it comes to State revenue, savings, and expenses.

The IMF programme should not be just another political topic that gets distorted, debated, and ignored or highlighted when advantageous. It goes beyond opportunistic politics and day-to-day needs. It is the political authority’s duty to allow it to remain practical and scientific, which it should be if Sri Lanka is to benefit from it. Sri Lanka’s agreement with the IMF may be controversial, especially when it comes to the impacts of the agreement’s implementation on the general public. However, we see the results. While it has added to the people’s day-to-day plight, it has also improved the economy at a higher level.

“With respect to the upcoming Presidential Election, this is for the people of Sri Lanka to decide. From the IMF's position, what we see is a programme that has made significant achievements, but that it is important to safeguard these achievements to enable the country to fully emerge from one of its worst crises,” the IMF said.

That is why we should recognize that the IMF programme is not entirely a monster. However, for it to deliver the intended results and for Sri Lanka to counter its adverse impacts, Sri Lanka should look at it in a scientific and realistic manner. Political labels should not be how we assess whether the IMF programme is beneficial or not.

Sri Lanka must have a sustainable reforms-based agenda built up on the IMF programme. In other words, the country should have a national plan concerning the IMF programme that is not dependent on any particular Government’s needs, agendas, or ideologies.  Sri Lanka's recent economic stabilisation, supported by the IMF, underscores the necessity of a steadfast economic reform agenda. For the country to maintain and build upon this stability, it is crucial that reforms transcend political changes. Consistent adherence to a well-defined economic strategy ensures that policies promoting fiscal discipline, investment attractiveness, and sustainable growth remain intact, regardless of shifting Governments. This commitment not only stabilises the economy but also secures a foundation for future prosperity, benefiting all Sri Lankans and reinforcing their trust in economic governance.

If there are issues or concerns concerning the IMF programme, they should be dealt with not through a political approach, but a scientific one. Instead of trying to amend or revoke the IMF programme out of spite, just to hurt political rivals, the political authority must counter the programme’s flaws, inadequacies, and harmful aspects. Politicians’ ill-advised plans for the IMF programme should not reverse the little progress that the country has achieved⍐.