Commenting on Sri Lanka’s debt restructuring process, visiting US Under-Secretary for Political Affairs, Victoria Nuland, complained on Wednesday that while India has made strong commitments for the cash-strapped island nation to unlock the International Monetary Fund’s (IMF) $2.9 bailout package, what China has offered so far is not enough.
The US Under-Secretary made this remark while on an official visit to Sri Lanka to mark the 75th anniversary of US-Sri Lanka relations.
“India has made strong commitments that it will provide credible assurances that the IMF is looking for. What China has offered so far is not enough. We need to see credible and specific assurances that they will meet the IMF standards of debt relief,” Nuland said, while responding to a question raised by journalists that India has given an assurance to the IMF on Sri Lanka’s debt restructuring but China has failed to do so.
“We all as major creditors of Sri Lanka had been working with the IMF. As the largest bilateral creditor of Sri Lanka, we are sad that China will provide credible and specific assurance regarding its readiness to join the rest of us in meeting IMF standards regarding debt restructuring. So we are increasingly seeing that all the rest of the Sri Lanka’s creditors coming forward with their assurances. Now all eyes are on China to do the same,” Nuland stressed.
“We want to see the IMF agreement as quickly as possible. That’s what Sri Lanka deserves, that’s what Sri Lanka needs with the United States prepared to do its part while our Paris Club partners are also prepared to do their part,” Nuland stated.
Facing a crucial economic crisis, Sri Lanka is awaiting the IMF’s four-year bail out of $2.9 billion but it requires assurances from the major creditors, including China, Japan and India.
On January 20, India had formally informed the IMF of its assurance for Sri Lanka to get the bailout package. However, China’s Export-Import Bank has offered only a two-year moratorium on its debt. Yet China’s assurance is not sufficient for the IMF to release the much-needed bailout package for Sri Lanka.