Sri Lanka President to Visit China as Debt Talks Progress
President’s Visit to China
Sri Lankan President Ranil Wickremesinghe is set to visit China next week, signaling progress in the country’s debt restructuring talks with its largest lender. According to a source in his office, Wickremesinghe’s visit comes as Sri Lanka aims to manage its heavy debt and maintain funds from a $2.9 billion International Monetary Fund (IMF) program.
Background and Current Situation
Wickremesinghe assumed office in July last year after his predecessor was forced to step down due to an economic crisis. His upcoming visit to Beijing will be his first to China since taking office. Sri Lanka owes Chinese lenders approximately $7 billion, with an agreement reached on outstanding debt with the Export-Import Bank of China. However, negotiations with other key bilateral creditors such as Japan and India are ongoing.
Participation in Belt and Road Forum
During his visit, Wickremesinghe will attend the Belt and Road Forum in Beijing, which marks the 10th anniversary of China’s initiative to develop global infrastructure and energy networks. The Sri Lankan leader is expected to meet Chinese President Xi Jinping on the sidelines of the forum, along with China’s finance and foreign ministers.
IMF Program and Debt Restructuring
Sri Lanka’s successful negotiations with creditors are crucial for the country to proceed with the first review of the IMF program, which would release a second tranche of approximately $334 million. The IMF program aims to support Sri Lanka in managing its debt and improving its financial stability. The country has been a major recipient of loans under China’s Belt and Road infrastructure drive, which has facilitated the construction of highways, a port, an airport, and a coal power plant.
Looking Ahead
President Wickremesinghe’s visit to China signifies the progress made in Sri Lanka’s debt restructuring talks and highlights the country’s efforts to manage its financial obligations. The outcome of the negotiations with bilateral creditors, including China, Japan, and India, will have a significant impact on Sri Lanka’s economic stability and future development. As the visit unfolds, it will be interesting to see the outcomes of President Wickremesinghe’s meetings with Chinese officials and the potential implications for Sri Lanka’s debt situation.
