A solid international support base for Sri Lanka to obtain assurances from its creditors – The Island

Debt restructuring

By Sanath Nanayakkare

The latest announcements made by the Paris Club, Chinese Foreign Ministry Spokesperson Zhao Lijian, Indian High Commissioner to Sri Lanka Gopal Baglay, Japanese Finance Minister Shunichi Suzuki, the European Union Delegation to Sri Lanka and British Prime Minister Boris Johnson are showing pretty good compliance with the IMF’s staff-level agreement with Sri Lanka on a $2.9 billion program confirmed on September 1.

These announcements appear to consolidate a solid base of international support to enable Sri Lanka to emerge from its economic crisis and achieve macroeconomic stability, as the IMF has deemed Sri Lanka’s debt burden to be unsustainable and, therefore, a significant relief should come from the creditors side.

The Paris Club reiterated its willingness to coordinate with official non-Paris Club bilateral creditors to provide the necessary financing assurances in a timely manner, which is a major concern for the IMF moving forward with its Extended Financing Facility (EFF) program. Paris Club expressed its readiness to begin the debt treatment process and reiterated its willingness to coordinate with official non-Paris Club bilateral creditors to provide the necessary financing guarantees in a timely manner and ensure an equitable sharing of the burden, as already proposed to the largest other official bilateral creditors.

They assured that “the Paris Club remains at the disposal of the Sri Lankan authorities and official non-Paris Club bilateral creditors to discuss further the next steps in the debt treatment process”.

Meanwhile, the head of the International Monetary Fund, Kristalina Georgieva, said yesterday that she was very pleased that IMF staff and Sri Lankan government officials had reached a staff-level agreement to support economic policies. country with a 48-month expanded funding facility of approximately $2.9 billion. , adding that this is an important step forward for Sri Lanka.

The European Union Delegation to Sri Lanka also welcomed the staff agreement between the International Monetary Fund (IMF) and Sri Lanka. Speaking to its official Twitter account, the EU delegation said it looked forward to continued cooperation on public financial management and green economy, including export industries. In a timely move, Japan called on all creditor countries to discuss Sri Lanka’s debt restructuring. “It is important that all creditor countries, including China and India, come together to discuss Sri Lanka’s debt restructuring,” Japanese Finance Minister Shunichi Suzuki said.

Suzuki made the comments a day after Sri Lanka reached a staff level agreement with the IMF. to continue to play a positive role in supporting Sri Lanka’s response to current challenges and efforts to alleviate the debt burden and achieve sustainable development.

Chinese Foreign Ministry spokesperson Zhao Lijian said last week that China has paid close attention to the difficulties and challenges facing Sri Lanka and provided assistance for Sri Lanka’s socio-economic development. Lanka to the best of his abilities. with President Ranil Wickremesinghe last week said that during the discussions they had, they reviewed the overall bilateral cooperation and agreed to further strengthen the close ties between India and Sri Lanka in all areas.

Meanwhile, British Prime Minister Boris Johnson said: “We – and others in the international community – want to work with Sri Lanka to make real and tangible progress on these issues.”

He also highlighted the recently announced trading system for developing countries. This, he said, will provide Sri Lanka with the opportunity to benefit from duty-free access for the vast majority of total goods exported to the UK.

“As we continue to strengthen our bilateral relationship, I hope we can find more opportunities to strengthen trade and investment. I foresee strong opportunities for the UK’s support with finance energy and renewables,” said the British Prime Minister, recalling the conversation the two leaders had in May about shared ambitions on climate change.

British Prime Minister Boris Johnson concluded his message by expressing his confidence that with Sri Lanka due to celebrate its 75th anniversary of independence, the UK and Sri Lanka would continue to build an even deeper and stronger partnership. . On September 1, the IMF announced that it had reached a services-level agreement with Sri Lanka, for a $2.9 billion loan package, but conditional on assurances from Sri Lanka’s creditors.