External Affairs Minister S.K. Jaishankar. External Affairs Minister S Jaishankar’s two-day visit starting on Thursday is highly anticipated as Sri Lanka’s crucial talks with the IMF to secure a USD 2.9 billion bridge loan for bailout to come out of the economic crisis happened. Image for representational purposes only. , Photo Credit: PTI
External Affairs Minister S Jaishankar’s two-day visit starting on Thursday is highly anticipated as Sri Lanka’s crucial talks with the IMF to secure a USD 2.9 billion bridge loan for bailout to come out of the economic crisis happened.
His visit comes two days after President Ranil Wickremesinghe announced success in the talks in parliament on Tuesday India will restructure Sri Lanka’s debtStating that the discussions have been successful.
“We are working to get our economy on the right track. Now we have to get the consent of India and China for this debt restructuring. We are continuing the discussions…and I am happy to announce this to this House It is happening that the discussion has been successful.” said Wickremesinghe, who also holds the finance ministry portfolio.
A similar sentiment was expressed by his junior minister, Shehan Semasinghe, who said that “good news will come from India and China.”
Sri Lankan officials, who are close to planning the visit, said the Indian minister’s visit was crucial in securing the IMF facility.
“India is expected to express its willingness to restructure its debt as per the IMF’s expectations,” an official told PTI on condition of anonymity.
During the visit, Jaishankar will call on President Wickremesinghe and Prime Minister Dinesh Gunawardene and discuss with Foreign Minister MUM Ali Sabri the entire gamut of the close India-Sri Lanka partnership and steps to strengthen it in all spheres.
Sri Lanka, which is in talks to secure a USD 2.9 billion bridge loan from the International Monetary Fund (IMF), is trying to get financial assurances from its major creditors – China, Japan and India – that Colombo essential for. To get relief package.
Sri Lanka’s unprecedented economic crisis brought out the best of India’s concerns for its southern neighbor given the island nation’s closeness in economic cooperation with China until then.
When the crisis started to bite a year ago, India came forward with USD 4 billion in aid.
The opposition also ridiculed the anticipated IMF facility, which, they said, was less than USD 3 billion in 4 years, while India had already disbursed USD 4 billion within 6 months, slamming the government for its mishandling of the economy. dollar was expanded.
Indian lifeline through dedicated credit lines for fuel and essential imports eliminated long lines on consecutive days on the island nation.
Public anger coupled with shortages of essential goods, fuel for extended hours and power cuts plunged the island into political turmoil never seen before.
The then-President Gotabaya Rajapaksa was ousted in months of protests.
Incidentally, Jaishankar became the first foreign dignitary to visit Sri Lanka during the economic crisis. His visit in March last year at the height of the crisis reassured Sri Lankans that India’s ‘neighbourhood first’ policy was largely in play.
“Sri Lanka is a close friend and neighbour, and India stands 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 India attaches to its close and friendly relations with Sri Lanka.
Investment analyst Dimantha Mathew said the foreign minister’s visit is significant as far as IMF facilitation is concerned. “India and China are the biggest creditors. Their assurance is important for Sri Lanka to get the IMF program,” he said.
“If Sri Lanka can get the two largest creditors in line with the IMF programme, Sri Lanka will be able to access the facility within its revised timeline,” Mathew said.
He expressed hope that the first tranche of the IMF bailout of US$ 2.9 billion would be available immediately after both India and China issue necessary assurances for the facility.
Mathew said that the second installment could be ready within 6-8 months.
Sri Lankan officials were tight-lipped on reports that India has already offered its assurance directly to the IMF.
Nor will he comment on the Indian minister’s brief remarks on other projects in Sri Lanka such as Indian investments in the country’s energy sector as Jaishankar is expected to look at “the entire gamut of the close India-Sri Lanka partnership and steps to strengthen it”. was reported. All regions”.
“Minister Jaishankar will be the messenger of good news,” said an official.
The cash-strapped country began talks with the IMF for a bail-out after announcing its first sovereign debt default in April last year.
Sri Lanka is hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948. A severe shortage of foreign exchange reserves has sparked political turmoil in the country, leading to the all-powerful Rajapaksa family Was expelled.