31 August 2022 12:46 am
Japan will coordinate with other creditors to resolve Sri Lanka’s worst economic crisis since its independence,
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Shunichi Suzuki |
foreign media reported quoting Japanese Finance Minister Shunichi Suzuki yesterday.
Suzuki invited all creditor nations to sit at the same table to discuss Sri Lanka’s debt and find solutions.
“We are concerned about Sri Lanka’s severe socio-economic situation,” Suzuki told reporters. Japan wants to actively cooperate with other creditor countries and public organisations,” Suzuki was quoted as saying.
Japan is said to have agreed to organise a creditors’ conference, possibly in partnership with Sri Lanka’s top bilateral creditor, China.
However, it remains unclear up to now whether China will take part in this exercise.
President Ranil Wickremesinghe told Reuters this month that Sri Lanka would ask Japan to invite the main creditor nations to talks on restructuring bilateral debts. He said he would discuss the issue with Prime Minister Fumio Kishida in Tokyo next month. “I believe it is important for the Sri Lankan government to try to improve its economic and fiscal conditions in coordination with the IMF, Paris Club (of major creditor countries) and others, while maintaining transparency,” Reuters quoted Japanese Foreign Minister Yoshimasa Hayashi as saying.
“We plan to consider our response, while watching such moves and the situation in Sri Lanka, and consulting with Sri Lanka, other donors and international organisations,” he added. Sri Lanka is very close to entering into a staff-level agreement with the IMF. An IMF team currently in Colombo is expected to conclude the mission with an announcement to the effect of a possible deal.
Following a staff-level agreement, Sri Lanka will officially begin to negotiate with its external creditors to restructure the debt to the tune of US$ 29 billion. An agreement with creditors’ will unlock a bailout package from the IMF, approved by its Executive Board.