Japan affirms commitment to SL to help finalise IMF agreement

Hideaki Mizukoshi

Japan’s envoy to Sri Lanka affirmed the country’s commitment toward the island nation, as it is looking to restructure the foreign debt amounting to US $ 30 billion.

In an interview with Reuters, Japan Ambassador to Sri Lanka Hideaki Mizukoshi said that the country stands by Sri Lanka in support of the debt restructuring negotiation process, so that the nation can reach the final agreement with the International Monetary Fund (IMF).

“Japan intends to play a constructive role with other creditor countries, including China and India,” Mizukoshi said.
As one of Sri Lanka’s main creditors, Japan will support the debt negotiation process. However, the envoy said talks on large infrastructure projects will only be resumed after Sri Lanka’s 
economy recovers.

“In the future, when this economic crisis is over and the economic conditions are in good shape, we can restart that kind of discussions,” said Mizukoshi as reported by Reuters.
Sri Lanka suspended a US $ 1.5 billion Japanese-funded light rail project for the commercial capital Colombo in 2020, citing financial problems.

Japanese firms have been investing in Sri Lanka since the 1970s, including in the electronics, ceramics and engineering sectors but investments have been hamstrung because of inconsistent economic policies and procedural obstacles, Mizukoshi pointed out.

“I hope that those things will be improved,” he said. 

“We hope that the environment for investment in Sri Lanka will improve,” he said.

Japan, also a major trading partner of Sri Lanka, holds around US $ 3.5 billion of the island nation’s total bilateral debt of about US $ 10 billion, amounting to 4.4 percent of GDP, according to the government and IMF data.