Lanka PM asks China to restructure debts

Facing crisis with no dollars to import food, fuel, medicine and cooking gas, Sri Lanka had in April suspended its debt payment of around $7 billion for 2022….writes SUSITHA FERNANDO

Sri Lanka Prime Minister Ranil Wickremesinghe said on Tuesday that the crisis-ridden nation is looking forward to discussions on debt restructuring with China.

Wickremesinghe said this after a discussion with China’s Deputy Ambassador Hu Wei in Colombo.

In January, President Gotabaya Rajapasa had urged Beijing to restructure its debt repayments as the country was going through its worst economic crisis. Rajapaksa made this request when he met Chinese Foreign Minister Wang Yi.

Over the last 10 years, China has given over $5 billion loans for projects including building highways, ports and airports, but political analysts have claimed that most of the projects were white elephants with no returns to the island nation.

China accounts for 10 per cent of Sri Lanka’s total loans and it is the third biggest lender after Japan and the Asian Development Bank.

Facing crisis with no dollars to import food, fuel, medicine and cooking gas, Sri Lanka had in April suspended its debt payment of around $7 billion for 2022.

During the discussion, Wickremesinghe also reiterated Sri Lanka’s adherence to the ‘One China Policy’.

“The Chinese Deputy Ambassador inquired about Sri Lanka’s food security programmes and re-assured the Prime Minister that China would be donating rice to Sri Lanka to help ease the food crisis,” the PM office stated.

Amid the oncoming food crisis in Sri Lanka, China has offered a grant of 10,000 metric tonnes of rice amounting to around $74 million and the two out of six shipments are to reach Colombo between June 25 and 30.

Last week, Wickremesinghe had announced plans to import 50,000 metric tonnes of rice under the Indian credit line to curb the food crisis in Sri Lanka. India has offered over $3.5 billion financial assistance Sri Lanka to get food, fuel, medicine and other essentials.

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