Once the Sri Lanka debt is restructured Japan will try to bring in trade and investment from especially its mainstream Japanese business, Katsuki Kotaro, Minister, Deputy Head of Mission Embassy Japan (PICTURED) told the Sri Lanka Apparel Exporters Association AGM in Colombo.
“Looking at the economy, I think things have stabilized considerably and we have to commend authorities for that. The prices, of course, are still high. But I think inflation is curving out and with that, the interest rate is coming down.”
“With the view of how much the country has moved forward from last year I think it is fair to say that the economy of the country is doing much better and quite well. And I think the background to that, of course, is the efforts of the Sri Lankan Government, but also hand in hand with that the IMF assistance program has started to run from this March.”
“And, in parallel with that we are working on the debt restructuring process. On the IMF front this September, the IMF team was here to conduct what is called the first review study and they have gone back to Washington DC and from everything that I know the staff has already prepared the report nicely.”
Kotaro said although there were several brackets in it, and to fill in the remaining brackets debt restructuring must happen and since recently they have been witnessing certain progress. Under the request of the President Japan is now co-chairing this committee together with France and India.
“We are working on the government credit side as well; China is not inside but they are observers so we are sharing information with them so that they can also work on their treatment. From what we know, it seems that the China Exim Bank has had talks with the authorities and come up with an agreement.”
“We hope that whatever agreement is reached will be shared in due course with us so that we can finalize this process and once the debt restructuring goes forward, then the IMF Board will approve the first review and that will unleash the 2nd tranche of the assistance money to Sri Lanka.”
Kotaro said that will unlock other co-financing by the World Bank and the ADB and once the debt is restructured, bilateral creditors like Japan or India or whoever will also be able to resume loan projects.
“Hence once the debt restructure is complete there will be much more forex flowing into this country and hopefully that will boost the economy. So then in my view this year was quite a good year,” he said.
Fizel Jabir