ECONOMY

 

Public Demands Transparency as Survey Shows Majority of Sri Lankans Disillusioned with IMF Programme

By Staff Investigations

Colombo — A growing public backlash against Sri Lanka’s International Monetary Fund (IMF) rescue programme has intensified after a recent survey found that more than 57 per cent of Sri Lankans believe the programme is no longer fit for purpose. While the IMF has been publicly thanked for providing approximately USD 200 million in recent relief funding, the broader rescue framework is now facing mounting criticism for its opacity, economic rigidity, and alleged geopolitical undercurrents.

At the heart of the controversy is a simple but politically explosive demand: full disclosure.

A Programme the Public Never Saw Begin

Despite the IMF programme shaping nearly every aspect of Sri Lanka’s fiscal and monetary policy, a significant portion of the population admits it does not know how, where, or on what precise terms the programme was initiated.

Sources within Sri Lanka’s policy community confirm that the first substantive negotiations between IMF officials and Sri Lankan representatives took place in Washington, DC. However, the minutes of those meetings, internal briefing notes, policy trade-offs, and conditionality discussions have never been made public.

Transparency advocates argue that this lack of disclosure is untenable, given that the IMF programme binds present and future governments, restructures national priorities, and imposes long-term costs on taxpayers.

“The Sri Lankan people are paying for this programme—directly and indirectly,” said a constitutional lawyer involved in public finance litigation. “They have an absolute right to know what was agreed in their name.”

The London Law Firm Question

Adding to the pressure is the role of a London-based law firm engaged to coordinate Sri Lanka’s debt restructuring process alongside the IMF framework. The firm, paid using public funds, acted as an intermediary with bilateral creditors, bondholders, and international institutions.

Yet, critics note that no comprehensive disclosure has been made regarding:

• The firm’s mandate and scope of authority

• Its correspondence with the IMF and creditor governments

• Advice provided to Sri Lankan officials

• Fee structures and performance benchmarks

Civil society groups argue that every letter, email, legal opinion, and negotiation note generated by this firm constitutes public information.

“This is not privileged corporate work,” said a former Treasury official. “This is sovereign restructuring, paid for by taxpayers, affecting generations.”

IMF Conditionality and the FDI Freeze

Perhaps the most economically consequential criticism concerns foreign direct investment (FDI). Despite repeated IMF assurances that the programme would restore investor confidence, Sri Lanka has struggled to attract large-scale strategic investments.

Multiple proposed projects—reportedly including over USD 2 billion from SINOPEC, alongside major investments from Japan, South Korea, and India—have stalled. According to investment promotion officials, the common obstacle is the IMF’s firm opposition to tax concessions and bespoke incentive frameworks.

Under IMF scrutiny, the current NPP-led government has been constrained from offering targeted tax relief or fiscal incentives to anchor investors—a tool widely used by regional competitors.

By contrast:

• Dubai offers aggressive tax holidays and regulatory fast-tracking

• Singapore provides sector-specific incentives and certainty frameworks

• Malaysia combines fiscal concessions with sovereign-backed facilitation

The result is a stark divergence. Investors unwilling to forgo concessions simply take their capital elsewhere.

“Capital is mobile,” said a regional investment banker. “Sri Lanka is being asked to compete with one hand tied behind its back.”

Growth Forecasts vs. the 2028 Wall

IMF officials maintain that Sri Lanka’s economy is stabilising and returning to growth. Remittance inflows remain strong, tourism has rebounded, and headline indicators have improved.

But economists warn that this optimism masks a looming reality: a major debt repayment wall beginning in 2028.

Critics argue that the current programme lacks a credible contingency plan for:

• Agricultural resilience amid climate shocks

• Industrial expansion beyond low-value exports

• Service sector productivity and wage growth

• Long-term FDI attraction under restrictive fiscal rules

“The programme appears designed to survive the present,” said one development economist, “but not to thrive in the future.”

A Geopolitical Undercurrent?

More controversially, questions are being raised about whether the IMF programme functions—deliberately or otherwise—as a geopolitical constraint on Chinese investment in Sri Lanka.

While the IMF officially denies targeting any country, analysts note that many large-scale Chinese-backed infrastructure and industrial proposals require precisely the kinds of concessions and state facilitation that IMF conditionality now discourages.

This has led to an uncomfortable question gaining traction in Colombo’s policy circles: is the IMF programme a neutral economic stabilisation tool, or a strategic instrument that indirectly reshapes Sri Lanka’s external alignments?

“If Chinese investment becomes structurally impossible under IMF rules,” said a senior academic, “then the programme has geopolitical consequences, whether acknowledged or not.”

Disclosure as a Democratic Imperative

The 57 per cent public dissatisfaction figure is not merely a protest statistic—it reflects a deeper democratic deficit. Sri Lankans are being asked to endure austerity, higher taxes, and reduced public spending without access to the underlying rationale or negotiations.

Advocacy groups are now calling for:

• Publication of IMF–Sri Lanka meeting minutes

• Disclosure of all correspondence with the London law firm

• Release of debt restructuring models and assumptions

• Parliamentary scrutiny of IMF conditionality

Without this, they warn, public consent for economic reform will continue to erode.

The Missing Accountability Question

Perhaps the sharpest criticism directed at the IMF is not what it has done—but what it has failed to do.

While the Fund has identified governance failures that led to Sri Lanka’s bankruptcy, it has not pushed for a parallel international effort to trace and recover stolen public assets allegedly parked in jurisdictions such as Dubai, the Cayman Islands, and Switzerland.

“The people who bankrupted the country are not the ones paying,” said a civil society activist. “Ordinary Sri Lankans are.”

This omission, critics argue, undermines the moral authority of the entire rescue effort.

A Programme at a Crossroads

Sri Lanka’s IMF programme now stands at a critical juncture. Economic stabilisation without legitimacy risks political backlash. Transparency delayed risks trust denied.

The demand from the public is increasingly clear: if this programme is truly designed to restore Sri Lanka’s sovereignty, sustainability, and prosperity, then its foundations must be opened to public scrutiny.

Until then, the question remains unresolved—whether the IMF rescue plan is a lifeline, a leash, or something uncomfortably in between.