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Last Updated : 2024-04-24 04:08:00
Japan is seeking to organise a Sri Lanka creditors' conference, hoping it could help solve the South Asia nation's debt crisis, but uncertainties cloud the outlook for any talks, three people with knowledge of the planning said.
Tokyo is open to hosting talks among all the creditor nations aimed at lifting Colombo from its worst debt crisis since independence, but it is not clear whether top creditor China would join and a lack of clarity remains about Sri Lanka's finances, one source told Reuters.
Japan would be willing to chair such a meeting with China if that would speed up the process for addressing Sri Lanka's debt, estimated at $6.2 billion on a bilateral basis at the end of 2020, this source said.
President Ranil Wickremesinghe told Reuters last week 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, when he is expected to attend the funeral of the assassinated former premier Shinzo Abe.
Tokyo, the number two creditor, has a stake in rescuing Sri Lanka, not just to recoup its $3 billion in loans but also its diplomatic interest in checking China's growing presence in the region.
S&P Global this month downgraded Sri Lanka's government bonds to default after it missed interest and principal payments. The island nation of 22 million people off India's southern tip, with debt at 114% of annual economic output, is in social and financial upheaval from the impact of COVID-19 pandemic on top of years of economic mismanagement.
An International Monetary Fund (IMF) team met Wickremesinghe on Wednesday to discuss a bailout, including restructuring $29 billion in debt, as Colombo seeks a $3 billion IMF aid programme.
The president met the same day with Japan's ambassador.
Tokyo believes a new "platform" is needed to pull creditors together, the sources said.
"Sri Lanka is running out of time since it defaulted on its debt. The priority is for creditor nations to agree on an effective scheme," one source said.
"Japan is keen to move this forward. But it's not something Japan alone can raise its hand and push through," said the source, adding that the cooperation of other nations was crucial.
Japan's Foreign Ministry declined to comment. Sri Lanka's central bank and Finance Ministry did not immediately respond to requests for comment. An IMF spokesperson declined to comment.(Reuters)
BuffaloaCitizen Friday, 26 August 2022 11:31 AM
China is bent on getting Rajapakse's back to power, so that more locations like H'tota Port can be sovereignly taken over. As long as Rajapakse's are living, the sovereignty and stability of Sri Lanka is at stake. The Weerawansa's and Gamanpila's and Vasudeva's are like wolves waiting for their turn to come again.
Punchi Friday, 26 August 2022 12:42 PM
However much the IMF gives that is if we get any money will not rescue us from the perpetual poverty and beggar self inflicted status that is now our karmic destiny forever. I was reading that some UNP chairman clown said that our Prez is the most powerful person in the world. This is the type of beliefs that has destroyed us
Market Economy Friday, 26 August 2022 01:21 PM
Strive founder, Vivek Ramaswamy reacts to congress vowing to investigate Wall Street firms engaging in a 'scam' to reduce drilling for oil and gas on 'Making Money. This Wall Street 'scam' must be investigated: Ramaswamy.
Japan a true friendly nation Friday, 26 August 2022 01:28 PM
Glad to see Japan dong this service for us. We have trouble influencing other country. India has no credibility, since they only give credit line which wasn't defaulted on. China is in own economic trouble, so Japan showing it is a fair international citizen by doing this service to us. We must appreciate Japan for this assistance.
Rukshan P Saturday, 27 August 2022 07:15 AM
China doesn’t want to disclose the amount of debt that is currently in default because it’s not all transparent and I think we will all get a nasty shock when we find out exactly how much China lent the MR government. We will be shackled to the “Belt
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