Discover and read the best of Twitter Threads about #IMFNow
Most recents (8)
🧵on SL's debt, what debt restructuring is - and how we do it.
This is a complicated topic so please ask any question you have, however simple it may seem.
#SriLankaEconomicCrisis #SriLankaCrisis #IMFNow #RestructureDebt
(1/25)
This is a complicated topic so please ask any question you have, however simple it may seem.
#SriLankaEconomicCrisis #SriLankaCrisis #IMFNow #RestructureDebt
(1/25)
First, why does Sri Lanka take on debt?
For 2 reasons. One is for direct investment (projects) - eg, loans to finance vaccines/roads.
The other is to bridge the negative balance between our dollar inflows and outflows, and essentially pays for our consumption.
(2/25)
For 2 reasons. One is for direct investment (projects) - eg, loans to finance vaccines/roads.
The other is to bridge the negative balance between our dollar inflows and outflows, and essentially pays for our consumption.
(2/25)
Project debt is often multilateral (agencies like World Bank, ADB) or bilateral (direct loans from India/China/Japan).
The "bridging" debt is rarely multilateral (except IMF loans) - and has been historically bilateral and more recently, commercial.
(3/25)
The "bridging" debt is rarely multilateral (except IMF loans) - and has been historically bilateral and more recently, commercial.
(3/25)
What exactly is the process behind the IMF - and why are we doing this IMF thing again?
Why do we need to do this regardless of #GoHomeRajapaksas or not?
#SriLankaEconomicCrisis #SriLankaCrisis #IMFNow #RestructureDebt
(1/19)
Why do we need to do this regardless of #GoHomeRajapaksas or not?
#SriLankaEconomicCrisis #SriLankaCrisis #IMFNow #RestructureDebt
(1/19)
First, what is the IMF?
Think of it as an organization that exists to help countries that have screwed up, and need to show to the world that they're now going to change their ways.
Country has to act themselves, IMF gives confidence and support.
(2/19)
Think of it as an organization that exists to help countries that have screwed up, and need to show to the world that they're now going to change their ways.
Country has to act themselves, IMF gives confidence and support.
(2/19)
Think of it as a naughty kid who tells the teacher, "no no miss, this time I will do my homework" but never does. But when the kid's parents also come along and say that, there's more confidence that this time, the homework will actually get done.
(3/19)
(3/19)
A short thread on "hyperinflation" - which Sri Lanka is NOT facing - and how we can avoid it.
(1/6)
#SriLankaEconomicCrisis #IMFNow
(1/6)
#SriLankaEconomicCrisis #IMFNow
Hyperinflation isn't an exact term, but the most useful definitions are of inflation that keeps rising faster and faster.
Eg- 50% monthly increase in prices in successive months without really stopping.
Our equivalent rise is closer to 2-3%, very different.
(2/6)
Eg- 50% monthly increase in prices in successive months without really stopping.
Our equivalent rise is closer to 2-3%, very different.
(2/6)
Hyperinflation is if a Rs. 100 loaf of bread in Dec 21, is 150 in Jan 22, 225 in Feb, 337.5 in Mar, ~ 500 in Apr etc - leading to the Dec 22 price being ~13000!
We are clearly far away from it being that bad.
(3/6)
We are clearly far away from it being that bad.
(3/6)
Let me explain why interest rates moving up, at this stage, is very good news.
#SriLankaEconomicCrisis #IMFNow
(1/15)
#SriLankaEconomicCrisis #IMFNow
(1/15)
First - rates themselves. You'll hear a lot of different types of rates, but rates move together mostly - so can think of 1 rate. Essentially, it's the rate at which you'll get money from a bank if you save or the rate at which you'll have to pay loan interest back.
(2/15)
(2/15)
So interest rates were kept low for a while now, and we started moving up late last year. Low rates leads to easy loans for people and companies, more money in the economy, and more consumption.
(3/15)
(3/15)
Quick key extracts from recent (post-Covid) IMF reports regarding social welfare. This should give a sense how the IMF views social welfare NOW and why we have space (and the urgent need) to expand welfare to deal with the #SriLankaEconomicCrisis and key #IMFNow reform
(1/7)
(1/7)
Zambia 2021
"Key elements of the authorities’ reform agenda aim to re-establish fiscal sustainability...towards GREATER INVESTMENT IN HEALTH AND EDUCATION AND THE DELIVERY OF MORE SOCIAL BENEFITS"
(2/7)
"Key elements of the authorities’ reform agenda aim to re-establish fiscal sustainability...towards GREATER INVESTMENT IN HEALTH AND EDUCATION AND THE DELIVERY OF MORE SOCIAL BENEFITS"
(2/7)
Lebanon 2022
"Lebanon’s economic program would need...TO INVEST IN CRITICALLY-NEEDED SOCIAL SPENDING TO SUPPORT THE PEOPLE OF LEBANON"
(3/7)
"Lebanon’s economic program would need...TO INVEST IN CRITICALLY-NEEDED SOCIAL SPENDING TO SUPPORT THE PEOPLE OF LEBANON"
(3/7)
I'm going to be advocating for and explaining some contentious economic points in the days to come re #SriLankaEconomicCrisis and #IMFNow so to be open and clear, this is about what I'm trying to achieve, why I'm trying to achieve it, and what my principles here are.
(1/25)
(1/25)
What I'm trying to achieve here is simple.
Get as many people as possible aware of what's happening economically and what's needed to recover, and help as many people as possible, understand a pretty gatekept and unintuitive field: economics.
(2/25)
Get as many people as possible aware of what's happening economically and what's needed to recover, and help as many people as possible, understand a pretty gatekept and unintuitive field: economics.
(2/25)
I'll be focusing on the crisis at hand to do this, and providing explanations, stories, narratives in order to improve this knowledge and understanding.
Because econ IS a complicated topic (and twitter has limits), these explanations are all oversimplifications
(3/25)
Because econ IS a complicated topic (and twitter has limits), these explanations are all oversimplifications
(3/25)
Let me try and explain this as best as I can.
SL has almost always had a negative balance between what we get as dollar income and what we give as dollar expenses.
We've broadly met this balance through debt.
#SriLankaEconomicCrisis #SriLanka #IMFNow
(1/12)
SL has almost always had a negative balance between what we get as dollar income and what we give as dollar expenses.
We've broadly met this balance through debt.
#SriLankaEconomicCrisis #SriLanka #IMFNow
(1/12)
So to improve from where we are now (just 300mn in reserves) we have to either
1. Increase income
2. Reduce expenses
3. Get more debt
(2/12)
1. Increase income
2. Reduce expenses
3. Get more debt
(2/12)
We can increase income by bringing more tourists, encouraging more remittances, and selling more exports.
Other than fixing the broken remittance markets, the rest take time. Tourism will recover, but how soon in this crisis is a question?
(3/12)
Other than fixing the broken remittance markets, the rest take time. Tourism will recover, but how soon in this crisis is a question?
(3/12)
This 🧵is the sad story of why fuel+electricity subsidies to the rich gave us powercuts and petrol/diesel queues
Tough choice, but powercuts and fuel queues affect all of us far more now
#EconomicCrisisLK #SriLankaEconomicCrisis #GoHomeRajapakshas #IMFnow
(1/20)
Tough choice, but powercuts and fuel queues affect all of us far more now
#EconomicCrisisLK #SriLankaEconomicCrisis #GoHomeRajapakshas #IMFnow
(1/20)
Let's set out our characters. Rehan represents all rich people in Sri Lanka. Pasan represents all poor people in Sri Lanka. CEB, CPC, banks, and Central Government remain players.
Let's see how Pasan gets screwed over by the rest.
(2/20)
Let's see how Pasan gets screwed over by the rest.
(2/20)
In 2021, at different points, CPC made Rs. 10-50 losses per litre of fuel. Every single litre. So that's a massive loss.
Along with other losses, comes to around 83 billion rupees of a loss in 2021
(3/20)
Along with other losses, comes to around 83 billion rupees of a loss in 2021
(3/20)
