South Asia and Beyond

Japan Seeks To Organise Sri Lanka Creditors’ Meeting

 Japan Seeks To Organise Sri Lanka Creditors’ Meeting

Japan is seeking to organise a Sri Lanka creditors’ conference, hoping it could help solve the South Asia nation’s debt crisis but uncertainties cloud the outlook for any talks. Tokyo is open to hosting talks among all the creditor nations aimed at lifting Colombo from its worst debt crisis since independence but it is not clear whether top creditor China would join and lack of clarity remains about Sri Lanka’s finances, one source told Reuters. President Ranil Wickremesinghe told Reuters last week that Sri Lanka would ask Japan to invite the main creditor nations to talks on restructuring bilateral debts. He said he would discuss the issue with Prime Minister Fumio Kishida in Tokyo next month, when he is expected to attend the funeral of the assassinated former premier Shinzo Abe. Tokyo, the number two creditor, has a stake in rescuing Sri Lanka, not just to recoup its $3 billion in loans but also its diplomatic interest in checking China’s growing presence in the region. But sources said getting Beijing’s cooperation on debt restructuring was complicated by factors such as a large number of lenders and that China was baulking at taking a “haircut” on its loans and at reducing Colombo’s debt burden.

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