Lankan crisis - Central News Hub

Sri Lankan President Arrives in Beijing For BRI Forum

Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China…reports Asian Lite News

Sri Lankan President Ranil Wickremesinghe on Monday arrived in Beijing to attend the third Belt and Road Forum for International Cooperation, China’s official state news agency Xinhua reported.

Meanwhile, the Daily Mirror, Sri Lanka, recently reported that a multifaceted interplay of economic troubles, strategic dynamics, and regional influence is currently unfolding in Sri Lanka. This island nation grapples with mounting debt and is navigating China’s growing presence and influence in the region.

Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China. This debt encompasses official loans and less visible commercial borrowings from Chinese commercial banks.

Notably, Sri Lanka owes USD 119 million to the China Development Bank Corporation, USD 232 million to the China Development Bank, and USD 232 million to the Export-Import Bank of China, according to Daily Mirror, a daily English-language newspaper published in Sri Lanka.

Despite China’s promises to assist in debt restructuring, tangible actions have been limited. Sri Lanka urgently requires a USD 3 billion bailout package from the International Monetary Fund (IMF), with the first instalment already received. The release of the crucial second tranche hinges on China and other bilateral lenders restructuring their debt terms with Sri Lanka.

According to Daily Mirror, China initially participated in discussions with other creditors, including India and Japan, offering a two-year moratorium on debt repayments and even exploring the possibility of providing new loans. However, China later altered its stance, creating roadblocks in Sri Lanka’s efforts to secure IMF aid.

Other leaders from Africa, Southeast Asia, Central Asia and the Mideast will attend the Belt and Road Forum in Beijing. Russian President Vladimir Putin is also expected to attend. (ANI)

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SRI LANKA 2022: Financial Crisis Deepens

The crisis is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China and foreign exchange reserves at their lowest levels in a decade…reports Asian Lite News

Sri Lanka is facing a deepening financial and humanitarian crisis with fears it could go bankrupt in 2022 as inflation rises to record levels, food prices rocket and its coffers run dry, The Guardian reported.

The meltdown faced by the government, led by the strongman president Gotabaya Rajapaksa, is in part caused by the immediate impact of the Covid crisis and the loss of tourism but is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China and foreign exchange reserves at their lowest levels in a decade, the report said.

Inflation has meanwhile been spurred by the government printing money to pay off domestic loans and foreign bonds.

The World Bank estimates 500,000 people have fallen below the poverty line since the beginning of the pandemic, the equivalent of five years’ progress in fighting poverty.

Inflation hit a record high of 11.1 per cent in November and escalating prices have left those who were previously well off struggling to feed their families, while basic goods are now unaffordable for many, The Guardian reported. After Rajapaksa declared Sri Lanka to be in an economic emergency, the military was given power to ensure essential items, including rice and sugar, were sold at set government prices – but it has done little to ease people’s woes, the report added.

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