Fact Check
In his statement, the minister makes two claims. (1) The current IMF programme required Sri Lanka to complete programme actions before receiving IMF funding, while in the previous programmes the actions were completed after receiving the funding, and (2) Sri Lanka was exceptionally fast in formalising an IMF agreement [after the staff level agreement], having done so within 7 months.
On claim 1: To check this claim, FactCheck.lk consulted the Letters of Intent (LOI) of the previous two IMF programmes entered in 2016 and 2009. These letters contain the programme commitments (conditions/actions) mutually agreed upon between the IMF and Sri Lanka.
The 2016 Sri Lanka IMF programme had 4 prior actions (actions required prior to starting the programme) and 19 structural benchmarks (actions to be completed after the fund disbursements have begun). Likewise, the 2009 programme had 6 prior actions and 8 structural benchmarks. According to the LOIs, both programmes had fulfilled their prior actions ahead of the IMF board-level agreement. Therefore, the minister is not correct in his first claim, about the current programme being different from the previous programme, in having prior actions.
On claim 2: As illustrated in Exhibit 1, of all the countries that entered debt restructuring episodes, half of them were able to secure a board-level agreement within 46 days of reaching the staff-level agreement, and most others took under 100 days, while Sri Lanka took 200 days (about 7 months). Therefore, the minister is not correct in his second claim as well.
The minister argues overall that Sri Lanka has been exceptionally efficient in the process of entering into the current IMF programme. Both claims he makes for this argument are incorrect. And, relative to other countries, Sri Lanka is not among the best (as argued), but amongst the worst, on time taken to formalise an IMF programme. Therefore, we classify his statement as BLATANTLY FALSE.
*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
Exhibit 1: Time taken between Staff to Board level agreement among countries that entered into debt restructuring.
Sources
https://www.veriteresearch.org/publication/issue-2-17-march-2023-verite-research-debt-update/ [last accessed: 19 April 2023]
https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Sri-Lanka-Staff-Report-for-the-2016-Article-IV-Consultation-and-Request-for-a-Three-Year-43960 [last accessed: 19 April 2023]
https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Sri-Lanka-Request-for-Stand-By-Arrangement-Staff-Report-Staff-Supplements-Press-Release-on-23388 [last accessed: 19 April 2023]