Thursday, September 24, 2009

Sri Lanka IMF document suppressed by government decision: official

Detailed International Monetary Fund documents showing the underlying basis for a stand-by loan to Sri Lanka have not been released by a decision of the island's government, an official said.

Sri Lanka at first only released the memorandum of economic policies governing a 2.6 billion US dollar standby loan to the island. Later a technical memorandum of understanding was also released.

But the staff report which gives the rationale for the loan was not released.

"Publishing that report is the prerogative of the government," IMF mission chief Brian Aitken told reporters in Colombo.

"You have to direct that question to the government, because it is their decision to publish. It is not our decision."

Annual country reports, prepared by the IMF as part of its annual 'Article IV" consultations have also been suppressed from last year.

The IMF staff reports contain independent technical analysis of the underlying economy and a high level of disclosure has been made by Sri Lanka from the 1990s.

Countries in the region, including Pakistan, have also made full disclosure of all IMF documents displaying a higher standard of transparency than Sri Lanka.

Ironically the reports are available to representatives of foreign governments that form the executive board of the multilateral lender, though they are withheld from the people of Sri Lanka.

Following the review mission, the government will sing a revised letter of intent with new foreign reserve and deficit targets with indicative targets in the original letter being hardened to performance criteria.

A storm has brewing in Sri Lanka over the suppression of IMF documents.

Muttukrishna Sarvananthan, from the Point Pedro Institute of Development, a private research body, has said the 2008 IMF staff report was suppressed at the request of Sri Lankan authorities.

In Sri Lanka debate on economics by political parties is mostly confined to ideology and not evidence.

Sri Lanka signed a series of agreements with the IMF during the 1980s, but there was little public scrutiny of state economic activity.

The then governments continued to deficit spend and create high levels of inflation and public had no access to independent evaluations of macro-economic management.

© Lanka Business Online

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