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Mar 10, 2017

‘Ranil got his figures wrong in his state debt statement’ Featured

Prime minister Ranil Wickremesinghe got his figures wrong when he told parliament on March 08 that the state’s debt to be repaid between 2017 and 2020 was 15,000 billion US dollars, says Nalaka Godahewa, a top figure in ‘Viyath Maga’.

Giving a breakdown, the PM said for 2017, the repayment is 4,088 b USD, for 2018 it is 4,164 b USD, for 2019 it is 3,743 b USD and for 2020 it is 3,209 b USD.

He went onto say that all this money had been borrowed during the previous regime, adding that state revenue should be raised through increased investments in order to come out of this dangerous situation.


Daily Mirror in first page

Daily Mirror carried his statement in its first page yesterday (09).

Commenting on that, Godahewa said in a facebook posting that he was surprised to read the PM’s statement in the newspapers.

Wondering as to who was giving such incorrect statistics to the PM, Godahewa said the 2014 Central Bank report placed the state debt at 7,391 b USD.

If Sri Lanka was 15,000 b USD in debt, that is second only to the US which has borrowed 18,000 b USD, he said adding that Great Britain’s total state debt was 2,000 b USD, both of which are very much bigger economies than Sri Lanka.

He went onto say that Sri Lanka’s economy could be likened to those of Egypt, Philippines and Pakistan which have between 50 b and 60 b USD debts each, while India, which is 24 times bigger than Sri Lanka has 942 b USD total borrowings.


Based on wrong statistics

Meanwhile, Lankacnews website says the PM might have given the 15,000 b USD figure without properly studying statistics or based on incorrect figures given him.

It gave the countries with the biggest state debts as - the US (18,560 b USD), China (11,391 b USD), Japan (4,730 b USD).

India which is the seventh biggest economy has a 2,250 b USD Gross Domestic Product (GDP), while Sri Lanka with 82 b USD is placed 67th in GDP.


Gross Domestic Product

The US state debt as a percentage of the GDP by 2016 is 17,910 b USD, which is 96 per cent of its GDP, while China’s is 1,680 b USD which is 16 pc of the GDP, Japan’s is 2,861 b USD which is 60 pc of the GDP and India’s is 485 b USD, which is six pc of the GDP.

56 b USD debt during Rajapaksa rule

By 31 December 2014 when Mahinda Rajapaksa was in office, Sri Lanka’s total state debt was 56 b USD, which is 71 pc of the GDP, and 7,500 b in rupee terms.

As per Central Bank statistics, the Ranil-Maithri government has increased that debt within the last two years by Rs. 2,200 b USD, and the total debt as at present is Rs. 9,700 b, or 63.8 b USD.

No country excepting the US has obtained a massive borrowing of 15,000 b USD.

During the UNP regime of 1988, the state debt to be repaid as per the GDP rose to 105 pc and also during the 2002-2005 period when Chandrika Kumaratunga was the president and Ranil Wickremesinghe was the PM, it again rose to 150 pc of the GDP, it adds


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