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Sabry reveals state coffers had dipped to USD 17 million when he took over as finance minister

Foreign Minister Ali Sabry

* Says can’t defend what can’t be defended

* SL should present a local mechanism free of smoke and mirrors to sell at next UNHRC sessions in Geneva

* Commends former Central Bank Governor Dr. Indrajit Coomaraswamy

By Sanath Nanaykkare

Foreign Minister Ali Sabry recently revealed that State coffers had only USD 17 million dollars when he took over as finance minister on 8th April 2022, and faced the unenviable task of paying USD 178 million on 18th April for various bills.

“In 2020, we had USD 7.6 billion worth of foreign reserves and at the time I took over the Finance Ministry, there was a mere USD 17 million. That amount was going up and down on a daily basis while another USD 500 million had to be found to pay for oil shipments that were coming in,” he said.

Speaking to journalists on ‘Salakuna’ programme telecast on Hiru TV, the former finance minister said it was good that there’s going to be court case on how the national economy came to a grinding halt due to the economic decisions taken at the time where we can also make submissions.

The minister went on to say that the decisions taken at the time to unrealistically hold the exchange rate, the rapid exhaustion of foreign reserves to defend the Sri Lanka rupee, the persistent assertion on a home-grown solution to the foreign exchange crisis instead of seeking timely assistance from the IMF led to an almost empty Treasury.

He didn’t have anything positive to say about the ban on chemical fertilizer which he said had been done without any research or following any country model for success.

“They were waiting for money to fall from somewhere. Someone went to Qatar five times to obtain short-term loans, but that didn’t work. It was anticipated that China would help, but the Chinese swap of USD 1.5 Billion came as something unusable. I had told President Gotabaya Rajapkasa well in advance to appoint an economic advisory council for him to consult with, on economic and financial decisions. But he depended on a few consultants one can count on the fingers of one hand,” he said.

However, when asked if those consultants committed an economic crime by giving wrong advice to the president, he said that motive is always necessary to prove a crime and he didn’t think there had been any motive to cause harm through such advice.

“I don’t want to put the blame on President Gotabaya Rajapaksa because he is out of power now. And it would be very remiss of me not to mention the freedom and the support he gave me to carry out my duties as a minister,” he said.

Commending former Central Bank governor Dr. Indrajit Coomaraswamy, Sabry said,” Having seen the scope of loans burgeoning between 2010- 2015, Dr. Coomaraswamy realized that by 2016-2018, a big amount of loan repayments would be accrued to pay and he raised funds when it was accessible and topped up foreign reserves and managed the situation well. But the financial authorities of the last administration didn’t have that farsightedness. What you can’t defend can’t be defended, “he noted.

The former finance minister said he would accept the responsibility for announcing to the world Sri Lanka’s inability to service its external debt and even face any punishment if it proved to be a wrong decision.

“In fact, that decision was made after consulting several high-profile Sri Lankan financial and economic specialists, not just by me; however, as finance minister I’d accept the responsibility for it without running away from it. We didn’t have the money to repay the loans. So it was advisable to announce it in advance and also convey Sri Lanka’s commitment and readiness to pay when it managed the crisis and received funds. We decided that a soft default would be better than an unannounced default which would have had more damaging consequences”.

When asked about economic decision making at present, he said,” President Ranil Wickramasinghe has extensive macroeconomic prudence and always follows the ratio of any expenditure to Gross Domestic Product (GDP) and ensures that there is income to provide for any fund allocation.”

Referring to Sri Lanka’s defeat at the recent UNHRC vote in Geneva, the Foreign Minister said,” I reiterated Sri Lanka’s unwavering commitment towards advancing, securing and protecting the human rights of our people, and continuing our engagement with the Council in a spirit of cooperation and dialogue. I must say this, when it comes to war victims in the North, we must establish a credible truth-seeking mechanism within the framework of the constitution.

The contours of the model have to provide relief to the families affected by the war and missing persons’ families. Also, it needs to create a platform for war heroes also to present their cases in a fair trial because you can’t put all war heroes into one single pan. Collection of evidence and how it is used in investigation is critically important. We must soon develop an indigenous mechanism acceptable to the international community for this purpose. What we are going to showcase at the next UNHRC sessions must be free of smoke and mirrors or else we will lose even more votes, and it will have far-reaching negative effects on the country’s credibility in terms of accountability and the obligations assumed by Sri Lanka under international human rights treaties. The foreign minister is only a marketing guy for Sri Lanka at UNHRC sessions, so I myself or any other foreign minister must have a product that we can sell to the international community. How can you market a product that they won’t buy? So let’s create a marketable product without procrastination,” he said.

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