Opinion

China drags its feet on restructuring Sri Lanka’s debt

10 Nov, 2022

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China is dragging its feet on restructuring Sri Lanka’s debt with a hidden agenda at hand.

Sri Lanka is depending on China, India and Japan to agree on a debt restructuring plan which will in turn ensure the IMF board approves funding for Sri Lanka.

One of the main conditions for the IMF board to agree to release critical funds for Sri Lanka is for Sri Lanka to first secure a debt restructuring deal with its main creditors.

While India and Japan, one of the three main creditors have agreed to restructure Sri Lanka’s debt, China is dragging its feet with a December deadline nearing.

Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe told reporters that if Sri Lanka misses the December deadline to report to the IMF it will need to wait till January or March.

Experts are of the opinion that China is seemingly attempting to place unfair pre-conditions on Sri Lanka before agreeing on a debt restructuring plan.

China is seeking a bigger stake in Sri Lanka and in the region in order to pose a challenge to India.

The Chinese Government has pushed Sri Lanka into huge debt by luring the county to agree to several projects not economically viable.

With Sri Lanka now in a extremely vulnerable position, the Chinese are seemingly attempting to tighten the noose around Sri Lanka to ensure the island “tows the line” before any debt restructuring deal can be reached. (Colombo Gazette)

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