Sri Lanka hopes for ‘good news’ from Jaishankar's two-day visit starting Thursday

PTI | Colombo | Updated: 18-01-2023 20:07 IST | Created: 18-01-2023 20:07 IST
Sri Lanka hopes for ‘good news’ from Jaishankar's two-day visit starting Thursday
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  • Sri Lanka

External Affairs Minister S Jaishankar's two-day visit here starting Thursday is anticipated with much hope given Sri Lanka's crucial negotiations with the IMF to secure a USD 2.9 billion bridge loan for a bailout to come out of the economic crisis.

His visit comes two days after President Ranil Wickremesinghe Tuesday announced in Parliament a breakthrough in talks with India to restructure Sri Lanka's debt, saying the discussions have been successful.

''We are working to get our economy on the right track. Now we have to get India and China to consent to this debt restructuring. We are continuing discussions... and I am pleased to announce to this House that the discussions are successful,'' said Wickremesinghe, who also holds the finance ministry portfolio.

Similar sentiments were expressed by his junior minister Shehan Semasinghe who said there will be ''good news from India and China.'' Sri Lankan officials, who are close to the visit's planning, said the Indian minister's trip was crucial in obtaining the IMF facility.

''It is hoped that India would express its willingness to restructure its debt in line with the IMF expectations,'' an official, who did not want to be named, told PTI.

During the visit, Jaishankar will call on President Wickremesinghe and Prime Minister Dinesh Gunawardena and also hold discussions with Foreign Minister M.U.M. Ali Sabry on the entire gamut of close India-Sri Lanka partnership and steps to strengthen it in all spheres.

Sri Lanka, which is holding talks to secure a USD 2.9 billion bridge loan from the International Monetary Fund (IMF), has been trying to get financial assurances from its major creditors -- China, Japan and India -- which is the requisite for Colombo to get the bailout package.

Sri Lanka's unprecedented economic crisis had paradoxically brought the best out of India's concerns for its southern neighbour given the island nations' proximity in economic cooperation with China until then.

When the crisis started to bite a year ago, India came forward with assistance worth USD 4 billion.

The opposition, while taking the government to task for its mishandling of the economy, even laughed off the anticipated IMF facility which, they said, was under USD 3 billion over 4 years when India had already extended USD 4 billion in just under 6 months.

The Indian lifelines by the way of dedicated credit lines for fuel and essential imports ended the long lines over consecutive days on the island nation.

The public anger with shortages of essentials, fuel and power cuts for extended hours saw the island being embroiled in a never seen before the political upheaval.

Months-long protests saw the ouster of the then-president Gotabaya Rajapaksa.

Jaishankar incidentally became the first foreign dignitary during the economic crisis to visit Sri Lanka. His visit in March last year at the height of the crisis assured Sri Lankans that India's 'Neighbourhood First' policy was pretty much in play.

''Sri Lanka is a close friend and neighbour, and India has stood with the people of Sri Lanka at all times,'' the Ministry of External Affairs said in New Delhi on Tuesday.

Jaishankar's visit to Colombo is a testimony to the importance that India attaches to its close and friendly relations with Sri Lanka, it said.

Dimantha Mathew, an investment analyst, said the foreign minister's visit was crucial as far as the IMF facility goes. ''India and China are the largest creditors. Their assurances are crucial to Sri Lanka clinching the IMF program,'' he said.

''If Sri Lanka can get the two largest creditors to fall in line with the IMF programme then Sri Lanka will be able to obtain the facility in its revised timeline,'' Mathew said.

He hoped that the first tranche of the USD 2.9 billion IMF bailout would be immediately available once both India and China issued their assurances prerequisite for the facility.

Mathew said the second tranche could be worked out within 6-8 months.

Sri Lankan officials were tight-lipped on reports that India had already offered its assurances directly to the IMF.

Neither they would comment on the Indian minister's brief on other projects in Sri Lanka such as the Indian investments in the country's energy sector as Jaishankar was reported to be looking at the ''entire gamut of close India-Sri Lanka partnership and steps to strengthen it in all spheres''.

''Minister Jaishankar would be the messenger of good news,'' an official said.

The cash-strapped country began negotiating with the IMF for a bail-out after having announced its first-ever sovereign debt default in April last year.

Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves, sparking political turmoil in the country which led to the ouster of the all-powerful Rajapaksa family.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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