China’s reluctance to accept the proposed debt restructuring could deprive Sri Lanka of the International Monetary Fund’s (IMF) USD 2.9 billion credit facility, said Dr Paikiasothy Saravanamuttu, Executive Director of the Centre of Policy Alternatives (CPA), The Island Online reported.
Dr Paikiasothy Saravanamuttu made the remarks at a workshop held in Kandy. The staff-level agreement will be implemented only after the countries that Sri Lanka is indebted to agree on how the debt needs to be restructured. The nations that Sri Lanka is indebted to are Japan, China, India and the European Union. Dr Paikiasothy Saravanamuttu said that the IMF expected each creditor to be treated equally which China is unwilling to accept. He stated that China was not happy with Sri Lanka’s decision to approach the IMF and has even offered to give more loans to Sri Lanka, as per The Island Online report.
The CPA Executive Director said that IMF will release USD 2.9 billion by January or February 2023 if China agrees to restructure debt. However, Sri Lanka will have to wait for the IMF’s board meeting in March 2023 if Beijing does not agree to the proposed debt restructuring. He stressed that Sri Lanka will need USD 850 million to pay for essentials during this period.Dr Saravanamuttu said that the people of Sri Lanka should not blame the politicians for the situation in the country as it is the citizens who have placed them there and given them the power. He stressed that the people have a responsibility to see that the situation improves in Sri Lanka.