USAID chief urges China to assist Sri Lanka’s debt restructuring

Visiting USAID Administrator Samantha Power on Sunday urged China, among other creditors, to assist Sri Lanka in restructuring debts to recover from the ongoing economic crisis.

Completing her two-day visit to the island nation that grapples with the worst-ever economic crisis since its independence from British rule in 1948, Power announced that the US was ready to help South Asian island in its debt restructuring process.

“As Sri Lanka seeks to emerge from this economic crisis, the United States, as a creditor and a member of the Paris Club, stands ready to participate in the restructuring of Sri Lanka’s debts,” Power told journalists in Colombo.

“It is imperative that all Sri Lankan creditors, most notably the People’s Republic of China, cooperate in this process openly and on comfortable terms with each other.

“When debt becomes unsustainable as it so clearly has in Sri Lanka, the stake of that

cooperation can mean the difference between life and or death, prosperity or poverty,” Power added.

The United States Agency for International Development (USAID) Administrator, who emphasised that the US is not interested in increasing Sri Lanka’s debt, said that her country “provides grants, as it is interested in the US-Sri Lanka relationship becoming a strictly trade related relationship, and not an aid relationship”.

“We want to use our resources to unlock the potential that we know is there, without strings attached. And we think this is a really important moment in Sri Lanka for that same mindset of standing with our friends, no strings attached, and in the interest of economic independence and economic stability for this country,” Power added.

During her visit, Power announced that $60 million assistance would be given to Sri Lanka - $40 million to help farmers purchase fertiliser and other vital agricultural inputs and another $20 million as emergency humanitarian assistance.

The USAID stated that the complex emergency that has resulted in a severe economic crisis has left nearly 5.7 million Sri Lankan people in urgent need of food, agriculture, livelihood support, protection, and more.

The weekend’s USAID financial support has brought the US government’s assistance to Sri Lanka at nearly $240 million.

With a colossal $51 billion total debt with the challenge to repay around $28 billion by 2028, Sri Lanka suspended repayment of nearly $7 billion in foreign debts due for the year 2022.

On September 1, the International Monetary Fund (IMF) struck a deal to provide $2.9 billion over four year to help salvage the country from its worst economic

crisis but reiterated that much will depend on the cooperation of the country’s existing creditors including China.

During her weekend visit, Power also met President Ranil Wickremesinghe, famers who were affected by the agricultural crisis and few other stakeholders.

--IANS

-Agencies