SRI LANKA: Sri Lanka announced its economic crisis in April. Last year after foreign currency shortages that had prompt rolling blackouts, fuel queues, and street protests. However, the primary causes of the country’s debt problem have been categorized into various factors, including corruption and economic instability. Most probably a structural balance of payments deficit.
Now, India, Japan and France have announced a common platform for discussing among creditors to address the debt restructuring programme of Sri Lanka.
In Washington, D.C., on the eve of the annual spring meetings of the World Bank and the International Monetary Fund (IMF), the three nations that would provide credit to Sri Lanka convened a press conference that included Indian Finance Minister Nirmala Sitharaman.
Emmanuel Moulin, the director general of the treasury in France, also marked his presence beside Sitharaman and Suzuki at the press conference. Moreover, Shunichi Suzuki praised the initiative and called it a “historic accomplishment”.
Meanwhile, after the G20 Finance Ministers and Central Bank Governors Meeting in Washington, Sitharaman said, “We talked about the debt situations in Zambia, Ethiopia, Ghana, and Sri Lanka. Even despite IMF assurances, resolutions should be made on schedule because they are a time-consuming process.”
Besides this, Japanese Finance Minister Shunichi Suzuki, during a media interview, described the launch as a historical development and said, “It is a remarkable achievement to be able to begin these negotiations with such a diverse group of creditors.”
According to the IMF, Sri Lanka’s public debt was at 128% of its gross domestic product as of end-2022. It’s the highest crisis any country could face. In times of pandemic, the mismanagement had led to this worst scenario of Lanka in present times.