Connect with us

Politics

China disagrees with IMF on Sri Lanka’s debt moratorium | world news

China disagrees with IMF on Sri Lanka’s debt moratorium |  world news

 


Sri Lanka and Pakistan have been flagships of the Chinas Belt Road Initiative (BRI) for the past decade and have used high-interest loans from Beijing to create white elephant projects. Both nations are now bankrupt, with China not showing the same BRI enthusiasm to revive their economies with much-needed help to overcome the growing food and energy crisis. Both countries are scraping the bottom of the economic barrel with a very weak US dollar exchange rate, high inflation and very high bank interest rates. The economic crisis in these two countries is a lesson for Nepal, Bangladesh, the Maldives and Myanmar, whose political leaders have often landed on the doorstep of Beijing for infrastructure funding, the Chinese Communist Party being able to penetrate the bureaucracies of the sub -Indian continent to their advantage.

While the Export-Import Bank of India has indicated in writing that its financing and debt relief to Sri Lanka will be in line with the IMF and the Paris Club, the Chinese Export-Import Bank has clearly know in Colombo that it would reimburse only a two-year moratorium instead of the 10-year moratorium recommended by the IMF-Club de Paris. The IMF and the Paris Club have recommended that the restructuring of the Sri Lankan debt be carried out over 15 years.

This means that the IMF’s envelope of $2.9 billion (spread over four years with six monthly reviews) to Sri Lanka in March is at risk due to the conditions of China’s EXIM bank. The only other option is for the IMF to allow loans from sovereign arrears to save Sri Lanka from total economic and political chaos.

Sri Lanka owes China at least $7 billion in debt, including loans from China Development Bank, with the figures rising to another level if private debt is also included. The unsustainably high-interest debt is due to financial malfeasance and poor governance by the Rajapaksa regime, of which current President Ranil Wickremesinghe was also a key part in the past. Thanks to the Rajapaksa’s financial prodigality, high-interest Chinese money has been used to build unsustainable white elephant projects across the country, including Hambantota Port, Mattala Rajapaksa International Airport and Norocholai Power Station. The public resentment that swelled against the Rajapaksas in 2022 has allowed fringe far-left political parties to rise in the island nation. Basically, as in Pakistan, the political antidote is worse than the economic malaise.

India, in its letter to the IMF Executive Director, Kristalina Georgieva, on January 16, 2023, made it clear that it would fully support the debt sustainability analysis by the IMF and the Paris Club without any additional conditions. . The Modi government, however, has made it clear that the Sri Lankan authorities should seek fair debt treatment from all commercial creditors and other official bilateral creditors, as well as adequate financial contributions from multilateral development banks. A copy of India’s letter to the IMF has also been sent to the Sri Lankan Ministry of Finance.

The Indian letter pledged to continue negotiations with the Sri Lankan government and the Paris Club on a treatment of medium and long-term debt through an extension of the maturity and a reduction of the rates interest rate or any other financial transaction that would provide similar financing/debt relief.

India’s view of the IMF’s debt sustainability assessment is that it will be underpinned by program targets to reduce Sri Lanka’s public debt-to-GDP ratio to less than 95% by 2032 and that the central government’s annual gross financing needs were less than 13% of GDP on average over 2027-2032. That aside, annual central government foreign exchange debt service would need to be less than 4.5% of GDP each year in 2027-32 to close Sri Lanka’s external financing gap.


Sources

1/ https://Google.com/

2/ https://www.hindustantimes.com/world-news/china-differs-with-imf-on-sri-lanka-debt-moratorium-101674878573675.html

The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

ExBUlletin

to request, modification Contact us at Here or [email protected]