IMF urges crisis-hit Sri Lanka to decide on debt restructuring

China’s delaying tactics clearly indicate that without their assistance, an IMF bailout would be impossible for Sri Lanka, according to a report published by Daily Mirror.

“Sri Lanka is no longer deemed bankrupt by the world,» President Ranil Wickremesinghe endorsed when the IMF team agreed to a bailout for Sri Lanka. 

China’s role as Sri Lanka’s main creditor has drawn global attention, as the delay caused by China in obtaining the IMF bailout is being closely monitored and questioned. Similarly, being a major creditor of Sri Lanka, China closely observes other countries’ actions regarding an IMF bailout for Sri Lanka. 

The current IMF team in Colombo anticipates that the restructuring process will be finalized during the first review of the program, scheduled for September or October this year, Daily Mirror reported as quoted by ANI. 

Additionally, during a recent visit to Sri Lanka, Afreen Akhter, the Deputy Assistant Secretary of the US Bureau of South and Central Asian Affairs (SCA), emphasized the importance of China’s formal participation in the common framework for creditor talks established by India and the Paris Club.

Krishna Srinivasan, Director of the Asia and Pacific Department, IMF, said that the Sri Lankan Government is making good faith efforts and negotiating with all creditors, private and official creditors.

“You may have seen, three countries India, Japan, and the Paris Club team together to form a credit committee. And China decided to be an observer to this group. So, that’s a process development,» he said. 

China’s influence in Sri Lanka has become so dominant that even though China is buying additional time to restructure its debt, a crucial step for securing the long-awaited IMF bailout, there appears to be no response from the desperate people of the island on China’s inaction.

(With ANI inputs)

Updated: 27 May 2023, 07:25 AM IST