Sri Lanka will not risk offering debt treatment outside IMF program - President

COLOMBO (News 1st); Sri Lankan President Ranil Wickremesinghe has expressed gratitude to the Paris Club, Japan, India, and China for enabling cooperation required to reach an IMF facility for the country.

In an open letter to Sri Lanka's Official Bilateral Creditors, President Wickremesinghe noted that the government deployed all efforts to demonstrate our commitment to the EFF program and relentlessly engage on the path to reforms. 

He said the administration has already implemented major reforms by way of prior actions agreed with the IMF.

The President said his government introduced a robust  reform agenda aimed at achieving debt sustainability, strengthening governance, widening the social safety nets supporting the most vulnerable and ensuring we can grow an inclusive  economy attractive to international business. 

He said this is how Sri Lanka will improve the lives of its people and ensure they are first in line to benefit from improvements in our economic conditions.

The President has requested creditors to maintain and even enlarge and strengthen official bilateral creditor coordination in the context of Sri Lanka's forthcoming engagement. 

He called on the Paris Club  bilateral partners, in particular Japan, together with all our other official bilateral partners,  including India and China, to garner and foster coordination as you best see fit.

The Presidnet noted that Sri Lanka is committed to communicate transparently with all on any debt treatment terms that are agreed with any creditor or group of creditors, before being formalized. 

The President in his letter has also committed not to resume debt service to any creditor unless that creditor agrees on a comprehensive debt treatment in line with IMF-supported program parameters and the comparability of treatment principle.

He had also expressed commitment to a comparable treatment of all external creditors, with a view to ensuring all-round equitable burden sharing for all restructured debts.

He said that Sri Lanka will not conclude debt treatment agreements with any official bilateral creditor or any commercial creditor or any group of such creditors on terms more favorable than those 
agreed under any multilateral platform put forward by our official bilateral creditors. 

Offering  a debt treatment outside of the perimeter set by the debt targets under the IMF program would risk making Sri Lanka's debt unsustainable again, he added.

The President said that Sri Lanka has not and will not make any side arrangements with any creditor aimed at reducing the  debt treatment impact on that creditor.