-By Shantha Jayarathne -Former Senior Consultant (SLIDA)
(Lanka-e-News -02.July.2023, 9.45PM) In the ongoing discourse surrounding Domestic Debt Restructuring (DDR), the government has made strenuous efforts to downplay its impact on the general population. However, recent revelations and developments tell a different story. It is becoming increasingly clear that the proposed DDR, under the guise of "optimization," poses a significant threat to the living standards of the people.
Initially, assurances were given that there would be no DDR, designed to alleviate concerns of an economic meltdown. Yet, it has come to light that key stakeholders were not entirely truthful about the matter. A Cabinet paper revealed the imposition of a precondition by International Sovereign Bond holders, indicating the necessity of DDR to facilitate negotiations with external debtors. The government's attempts to deny the imminent possibility of DDR were thus exposed.
Of utmost concern is the treatment of the Employees' Provident Fund (EPF), the country's largest private pension fund. Shockingly, the EPF management was left completely unaware of the details of the DDR process, learning about their inclusion through social media. This neglectful approach is reminiscent of past instances where vested interests manipulated the EPF for personal gain. The absence of representation from the contributory body raises serious questions about the management of the fund and the protection of the interests of its 2.5 million hardworking contributors.
Furthermore, the proposed DDR seeks to limit interest payments to a mere 9% for the next 16 years, significantly lower than the current average interest rate of around 13.5%. This move puts immense pressure on individuals who rely on their EPF savings for a secure future. Hardworking private sector employees, unlike their public sector counterparts, cannot simply rely on a pension after 20 years of service. The reduced returns on their EPF investments threaten their ability to make ends meet during retirement.
The DDR's impact extends beyond the EPF and directly affects the wider population. As the government assures us that the DDR will not affect local bank accounts, it conveniently omits that nearly half of these accounts consist of loans, leases, advances, or overdrafts. Many individuals are already struggling to meet their financial obligations. By neglecting to address the restructuring of these debts under the DDR, the government is putting the burden squarely on the shoulders of the working class.
It is essential for the people to understand that the proposed DDR poses a real threat to their living standards. The government's promises of minimal impact on the population must be met with skepticism. It is our collective responsibility to voice our concerns and demand accountability to protect the interests and well-being of hardworking individuals and their families. We cannot afford to let the DDR erode the progress we have made and undermine the future prospects of our nation. It is time to stand up, raise our voices, and advocate for a fair and equitable approach that prioritizes the well-being of all Sri Lankans.
Former Senior Consultant
Sri Lanka Institute of Development Administration
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by (2023-07-02 16:34:01)
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