Calculating the Loss to the EPF From Proposed DDR

Abstract

Justice and good decision-making flows in part, from the discipline of public reasoning. The belief in democracy is anchored in the hope of harnessing the power of reasoned decision making that is openly and dialogically shaped by the informed engagement and consent of society systematically flouting that expectation is a recipe for political instability – and Sri Lanka’s post-colonial history is no stranger to that truth. In the spirit of promoting public reasoning (that is both reasoning, and public), I published an op-ed last week showing why the Employees’ Provident Fund (EPF) was unjustly disadvantaged by the Domestic Debt Restructuring (DDR) proposed by the government of Sri Lanka. It presented an analysis (based on data in the public domain at that time) on the impact and injustice of exclusively targeting the bond holdings of retirement savings funds, causing huge losses to those who are forced to save 23% of their gross salary in the EPF and ETF. The present article is written in the same spirit, to advance that previous analysis (published in the 6th July 2023 edition of the Daily Mirror, titled “Let’s Shield the EPF with the Instincts of Winston Churchill” - https://www.dailymirror.lk/opinion/Lets-Shield-the-EPF-with-the-Instincts-of-Winston-Churchill/172-262469) by adding two further calculations that grapple with new and limited information that has been released. The article will also respond to two critical questions that have been raised by various interlocutors – even if they have run shy of raising these questions publicly in an analytically reasoned form.