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Lanka crisis would deepen if creditors disagree, IMF says amid China concerns
ECONOMYNEXT –Sri Lanka’s ongoing economic crisis would deepen if one creditor disagrees, a senior International Monetary Fund (IMF) official said amid concerns that China would not go along with Western creditors on debt restructuring on an equal footing.
All Sri Lankan creditors including China have to agree to restructure their existing loans to the island nation before the IMF starts disbursing a 2.9 billion US dollar loan on which preliminary agreement was announced on Thursday.
“If one creditor or creditors are not willing to provide these assurances, that would indeed deepen the crisis here in Sri Lanka and would undermine the repayment capacity,” Peter Breuer, senior IMF mission chief told reporters in Colombo when asked what if China does not agree on a debt restructuring plan.
“So a deepening crisis means that essentially the resources available to service the debt would become less,” he said at the media briefing after concluding a nine-day visit to finalize the staff-level agreement and a loan package for Sri Lanka’s reforms.
“So it is actually in the interest of all creditors to collaborate together and with Sri Lanka so that Sri Lanka can emerge from this crisis as quickly as possible and regain its repayment capacity and service this new debt that will come out of these debt negotiations.”
China has so far not agreed for debt restructuring which could include haircut or reductions in interest rates. Instead, China has expressed its willingness to refinance Sri Lanka to repay its past loans without any changes, Lankan officials say.Sri Lanka has already hired financial and legal advisory firms Lazard and Clifford Chance LLP to support its debt restructuring as the country is on the brink of bankruptcy. Lazard has been the legal adviser in Zambia’s debt restructuring where creditors included China.
The Paris Club of Western nations which has a well defined unified process for dealing with defaulted nations, which is familiar to the IMF.
“Sri Lanka is in a special situation that much of its official debt is outside of Paris Club creditors,” Breuer said.
“It is important to move expeditiously. We want to avoid the crisis from becoming worse.”
The situation report issued by the Disaster Management Centre at 1800hrs today (5th December) confirms that 607 persons have died due to the adverse weather conditions while the number of missing persons has reduced to 214.
The number of persons affected topped the 2 million mark (2,082,195).
The Sri Lanka Navy (SLN) formally took delivery of the EX- United States Coast Guard Cutter, USCGC DECISIVE, provided by the United States to SLN, at a ceremony held at the United
States Coast Guard Yard in Baltimore on 02 Dec 25. The event was also attended by the Commander of the Navy, Vice Admiral Kanchana Banagoda.
The ship formally joined the SLN fleet on 02 December under the pennant number P 628 and the main mast of the ship will fly the National Flag effective from that date.
Aiming to strengthen and develop partnerships to overcome common challenges in the maritime domain, the U.S. Coast Guard has previously provided 03 ships to SLN and they are currently patrolling island waters under the names of ‘Samudura’ (P 621), ‘Gajabahu’(P 626), and ‘Vijayabahu’ (P 627).
As an extension of partnership ties that bring value to each other’s services, Ex-USCGC DECISIVE was transferred as the fourth ship to be handed to SLN.
Ex-USCGC DECISIVE, a ‘B-Type Reliance Class 210-foot Cutter’, measures 64m in length, and having endurance of 6000 NM at cruising speed. Further, she has been designed for a
crew of 100 and is equipped with weapons and machinery.
The ship which was used by the U.S. Coast Guard has rendered exceptional service during her tenure by curbing illegal activities, including smuggling of narcotics in U.S. waters.
Sri Lanka inherits an Exclusive Economic Zone (EEZ) that is seven times larger than the landmass. In such a backdrop, the Navy is determined to deploy this vessel in wide-ranging
operations that include the conservation of marine resources in the region and the search and rescue of naval and fishing communities in distress. Thereby, the Navy will be able to utilize
this vessel efficiently in the future to achieve the national aspiration, while ensuring safe and secure seas for all economic affairs.
The formal handing over – taking over ceremony was also distinguished by the presence of the Deputy Chief Acquisition Officer and Director of Domain & Integration Services U.S. Coast
Guard, James L. Knight, Deputy Assistant Secretary of War for South and Southeast Asia, Dr. Andrew Byers, the Ambassador of Sri Lanka to the United States, Mahinda Samarasinghe, Commanding Officer designate of P 628, Captain Gayan Wickramasuriya as well as a group of officials from the Embassy of Sri Lanka in United States and the State Department
of the United State
The situation report issued by the Disaster Management Center at 0600hrs today [5th December] confirms that 486 persons have died and another 341 persons are missing after the devastating weather conditions in the past week.
171,778 persons have been displaced and have taken refuge at 1,231 safety centers established by the government.
Death toll rises to 607, missing persons reduce to 214 at 1800hrs today (5)
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486 dead, 341 missing, 171,778 displaced as at 0600hrs today [05]
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