Opposition Leader Mahinda Rajapaksa states that the present government has created a serious debt crisis in the country.
The Opposition Leader made a press release titled "Present Situation of the Credit Crisis created by the Good Governance Government".
The Opposition Leader further points out that the commercial debt obtained by the present government has been utilized to meet the day-to-day expenses.
The press release is given below
The debt crisis in the country created by the good governance government has turned into a very serious situation at present. Sri Lanka's total debt burden increased by 71% to Rs. 12.64 trillion by the end of July 2019, which was 7.39 trillion rupees when the current government came to power in January 2015.
The greatest risk in these loans is that more foreign exchange loans have been obtained.
Moody's, the international ratings agency, also issued a special warning recently about Sri Lanka's foreign borrowing.
From January 2015 to date, the government has borrowed more than US $ 26 billion in foreign exchange loans from various sources such as Sri Lanka's Development Bonds, Sovereign Bonds, Currency Swap and Syndicated Loans.
In the case of foreign exchange loans, all such loans have to be repaid in foreign exchange.
When the value of the US dollar appreciates against the rupee and the exchange rate changes will also increase the country's debt burden.
This is why large-scale commercial borrowing in foreign exchange is a trap. The US dollar, which was 131 rupees at the end of 2014, has risen to an unprecedented level in history due to the economic downturn under the good governance government.
Sri Lanka's total debt burden increased by Rs 1,709 billion at the end of 2018 alone, due to the devaluation of the rupee since 2015. One of the unique features of the government's borrowings is that they are not project loans to develop the country but commercial loans taken to meet the government's daily expenses.
When the good governance government talks about loans taken by my government, they always refer to loans taken for various projects.
It should be noted that the good governance government has not made any mention for the last five years of a loan that has not been for a project taken by my government.
My government maintained commercial borrowings from sources such as Sovereign Bond, Sovereign Bond, Currency Swap and Syndicated Loan to a very low level.
Foreign loans for projects during our tenure were obtained as long-term loans at concessionary interest rates of 2%.
Even then it was a very small amount compared to the borrowings of the good governance government.
The construction of the Norochcholai Power Plant was completed at a cost of US $ 1.35 billion. The total amount of loans taken to restore the Hambantota harbor to its present level was US $ 1.26 billion.
The Southern Expressway up to Matara cost US $ 740 million. The airport at Mattala cost $ 209 million. The Katunayake Expressway cost was $ 292 million.
The loan to construct the Lotus Tower was US $ 67 million.
Even if the money spent on all these projects are combined, it will not come close to the borrowing of US$ 4.4 billion secured by two sovereign bonds this year alone under the Good Governance Government.
This is the extent of the debt crisis created by the good governance government in less than five years. It is because of the seriousness of this issue that I have been making the public aware of this issue from time to time.
My government borrowed and invested.
Today the Norochcholai Power Plant is a very profitable project.
The Auditor General said last year that the highways are also profitable. The media reported on Sunday that 95% of the nine-storey building of the Hambantota port, which has been leased to a private company for 99 years, has already been leased out to various companies operating commercial operations.
This means that the Hambantota port will soon be profitable. The government can also earn a huge income from the recently opened Lotus Tower (Nelum Kuluna). But over the last four and a half years, the $ 26 billion in foreign debt secured by the good governance government has not made any lasting, revenue-generating investment.
During my tenure, the government did not have to take large-scale consumer loans but the present government has to do so because the good governance government is throwing away money to win elections and preserve power.
It is the people who ultimately have to pay for all the good governance government spending to protect their power. This is the first time an economic crisis has been created in the country due to the disturbance of the government's financial governance, despite many previous economic crises.
We have not seen in the 71 years since independence any other government with such an irresponsible attitude towards government finances.