All of Sri Lanka’s (SL’s) bilateral creditors – including China – will need to deliver debt treatments in line with their assurances in a timely manner, U.S. Treasury Secretary Janet Yellen said yesterday (Thursday, 20 April).
The U.S. Treasury website quoting Yellen in a speech she made at Johns Hopkins School of Advanced International Studies, USA, further said that the United States has had extensive discussions with Beijing about the need for speedy debt treatment.
“We welcome China’s recent provision of specific and credible financing assurances for Sri Lanka, which has enabled the IMF to move forward with a programme. We continue to urge China’s full participation to provide debt treatments in other cases in line with IMF parameters. This includes urgent cases like Zambia and Ghana,” Yellen added.
Continuing, the US Treasury Secretary said, “‘Prompt action on debt is in China’s interest. Delaying needed debt treatments raises the costs both for borrowers and creditors. It worsens borrowers’ economic fundamentals and increases the amount of debt relief they will eventually need.
More broadly, there is considerable room for improvement in the international debt restructuring process. With the IMF and World Bank, we are working with a range of stakeholders to improve the Common Framework process for low-income countries and the debt treatment process more generally. As I heard from Zambian officials, solving these issues is a true test of multilateralism.”
Meanwhile, on the previous day Wednesday, China’s Foreign Ministry website reported that China’s Foreign Ministry Spokesman Wang Wenbin was asked by ‘Bloomberg,’ “Is China going to join the bilateral creditor grouping launched last week by India, Japan and France with Sri Lanka? What will be your plans for dealing with the issue of Sri Lanka’s outstanding debt to China?”
To which Wang replied, “China supports Chinese financial institutions in actively discussing debt treatment arrangements with Sri Lanka. We will work with relevant countries and international financial institutions to jointly play a positive role in helping Sri Lanka navigate the situation, ease its debt burden and achieve sustainable development. In the meantime, we call on commercial and multilateral creditors to take part in Sri Lanka’s debt restructuring and fair burden-sharing.”
‘Bloomberg’ then asked Wang, “So you said that you’re willing to work with the Sri Lanka parties and also the other international creditors. So is China willing to join the bilateral creditor grouping that was launched last week?”
To which question China’s Foreign Ministry Spokesman replied, “As for the specifics you mentioned, I’d refer you to competent authorities.”