India, Japan and France announce common platform for Sri Lanka creditors

India, Japan, and France have announced a common platform for talks among bilateral creditors to coordinate restructuring of Sri Lanka's debt. The move is expected to serve as a model for solving the debt woes of middle-income economies.

 

Japanese Finance Minister Shunichi Suzuki told a briefing that to be able to launch this negotiation process with such a broad-based group of creditors is a historical outcome.  He said this committee is open to all creditors.

 

French Director General of the Treasury Emmanuel Moulin told the briefing that the group is ready to hold the first round of talks as soon as possible.

 

The island nation of 22



million people last month secured a 2.9 billion dollar programme from the International Monetary Fund to tackle its huge debt burden. But the middle-income economy could not apply for relief under the G-20’s common framework for debt treatments, which targets only low-income countries.  This has put the onus on major economies to come up with an alternative scheme, leading to the creation of the new platform.

 

Sri Lanka owes 7.1 billion dollar to bilateral creditors, with 3 billion dollar owed to China, followed by 2.4 billion dollar to the Paris Club and 1.6 billion dollar to India, according to official data from Sri Lankan government.