Addressing the ‘Berlin Global Dialogue’, President Ranil Wickremesinghe said that Sri Lanka has both climate change mitigation and debt restructuring, which we have to handle with minimum funds available.
Wickremesinghe said the global economy has many shocks in the last two decades, starting from 2008.
“I don’t think in any other period of modern history have we gone through this type of a crisis. And in all these instances it is the developing economies and the Global South that has suffered disproportionately,” he said.
The President said we are now faced with stubbornly high inflation advance economies, oil prices edging towards USD 100 a barrel and monetary tightening by the global central banks.
“One example is that Sri Lanka’s exports to Europe have not increased at all so far this year. That’s an indication of how we are being affected as we try to recover from the crisis we face,” he explained.
President Wickremesinghe said the difference between the advance economies and the developing nations is that the former has all the buffers and reserves to deal with these shocks, while the latter does not.
“And it’s from here that the sovereign debt crisis started.”
He stated that in this context, he believes that the world may be “on the scruff of another crisis” if corrective measures are not taken immediately.
President Ranil Wickremesinghe further said:
Many developing countries find themselves with large burdens. For example, the IMF has no mechanism to face this new situation. When Sri Lanka declared bankruptcy, all foreign funding seized. And that started the political crisis.
If not for the help given by the World Bank in regraduating Sri Lanka and my old friend Samantha Power (USAID Administrator) in funding us with fertilizer, I would not have been able to come here today. I would not have been in the position. It’s so bad and there is no way in which you can help any country which declared bankruptcy.
But in this case especially I’m glad that Germany is doing its part as the largest cumulative contributor to the Green Climate Fund.
We have both climate change mitigation and debt restructuring, both which we have to handle with minimum funds available. The funding on the table is woefully inadequate to address the vast challenges at hand.
So we haven’t got any money, but we do have a $100 billion with the IMF. Let’s start with that money. $100 billion is better than nothing. Then let’s see how we can raise the rest of it.
Because though I talk of Sri Lanka, I must say, Africa’s need especially of the lower-income countries are far greater than ours. And the problems Africa face need not be described by me because I think there are enough representatives here.
The developing countries require financing up to US$ 5.9 trillion to fulfill their nationally determined contributions and then a further US$ 4 trillion per annum for clean energy technology to achieve net zero emissions.
Look at Sri Lanka’s financing needs. For our climate prosperity plan to succeed, we need USD 26.5 billion by 2030. This is for a country that is bankrupt and who the IMF states will have for the next few years a growth rate of 3.5%, if we are lucky.”
