Japan seeks Sri Lanka recovery for regional stability

Strategically placed Sri Lanka’s economical betterment was indispensable for stableness successful the Indo-Pacific region, Japan’s overseas curate said Saturday, urging Colombo to swiftly restructure its overseas debt.

Yoko Kamikawa said aft talks with her Sri Lankan counterpart that Colombo should unafraid agreements with bilateral lenders and planetary sovereign bondholders to unlock suspended overseas funding.

The Sri Lankan authorities which defaulted connected its $46 cardinal outer indebtedness successful April 2022 had hoped to finalise deals with overseas creditors by April but determination person been nary last agreements yet.

Kamikawa said she “stressed the value of reaching a indebtedness restructuring statement with each the creditors”, including China — the largest bilateral lender to the island.

“I besides conveyed Japan’s volition to further enactment Sri Lanka’s improvement by swiftly resuming existing yen indebtedness projects (after a indebtedness restructuring deal),” she said.

She said Tokyo considered Colombo’s economical betterment arsenic important for the full region. The land is located halfway on the main east-west planetary shipping route.

“The restoration of stableness and economical improvement of Sri Lanka, which is astatine a strategical determination successful the India Ocean, is indispensable for the stableness and prosperity of the full Indo-Pacific region,” she added.

Sri Lanka indispensable unafraid statement from each authoritative creditors and a bulk of backstage bondholders to proceed with a four-year $2.9 cardinal bailout indebtedness begun since March past year.

Japan, the 2nd largest bilateral lender to the land has expressed interest astir China’s large infrastructure projects successful Sri Lanka and elsewhere successful the region.

Tokyo maintains that the Chinese-funded projects did not conscionable planetary concern standards.

Unable to repay a immense indebtedness taken from China successful 2017 to physique a heavy oversea larboard successful confederate Hambantota, Sri Lanka handed it implicit to a Chinese steadfast for $1.12 cardinal connected a 99-year lease.

Sri Lanka ran retired of currency to wage for adjacent the astir indispensable imports successful 2022, starring to chronic shortages of food, substance and medicines.

Then-president Gotabaya Rajapaksa, who faced allegations of mismanagement and corruption, was forced to fly the state and resign successful July 2022 aft months of protests.

His successor, Ranil Wickremesinghe has raised taxes, chopped subsidies and is enforcing achy economical reforms successful enactment with the IMF bailout.