At the launch of the rescue scheme last week, France urged creditors to ensure “transparency” while negotiating the restructuring of Sri Lanka’s suffocating debt, which disrupted imports of lifeline supplies of fuel, food and medicines and sparked political chaos.

 “This creditor committee is open to other creditors who are invited to join. In any case we will maintain coordination with them in order to make sure that we have comparable treatment,” said Emmanuel Moulin, Director-General Treasury France.

“Now the creditors should keep the momentum and start the restructuring process in a coordinated manner to ensure transparency and comparability of treatment based on their financial assurances and IMF parameters,” he added.

Last month, the International Monetary Fund authorised a 2.6 billion euro programme to help Sri Lanka confront its worst economic crisis in over seven decades. The debt-stricken island nation has other creditors also knocking on its doors.

“We believe that such a collaboration is important to ensure transparency and equality in treatment of all creditors in the debt restructuring discussions,” added India Finance Minister Nirmala Sitharaman

The three-nation committee will start the negotiations without delay. The authorities in Colombo initiated talks this year in an effort to ease Sri Lanka’s debt situation. The government hopes to clinch a deal by May.

Sri Lanka owes 6.4 billion euros to bilateral creditors. China is one of the largest single lenders, accounting for 10% of the island’s total foreign debt. Colombo also owes 1.8 billion euros to the 22-nation Paris Club and almost one billion euros to India, according to official data.

It also must renegotiate over 10.9 billion euros of debt in Euro bonds with foreign private creditors and 1.8 billion euros on other commercial loans, according to Reuters news agency. Japan Finance Minister Shunichi Suzuki said the initiative put in place by France and the two Asian nations will encourage other creditors to discuss Sri Lanka’s crippling debt.

“It will be very nice if China will join,” Suzuki told reporters on the sidelines of a finance ministers’ meeting of G 20 members as Beijing promised to work out a medium- and long-term rescue plan to help the island nation of 22 million people recover economic equilibrium.

“China has clearly stated that it will extend the maturity of Sri Lanka’s debts due in 2022 and 2023,” media quoted Chinese Foreign Ministry spokesman Wang Wenbin as promising.

“Sri Lanka will now know who its real friends are,” Harvard-educated Sharad Kohli, an Indian economist said.

(www.bignewsnetwork.com and originally published on RFI)

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