Colombo: Sri LankaThe U.S. government said on Tuesday that it was in discussion on getting another loan. Beijing To repay some of its debt to Chinese banks, China told the nearly bankrupt island nation that it was not in favor of restructuring existing debts.
Sri Lanka has an external debt of around USD 7 billion due for repayment this year and will need to repay USD 25 billion over the next five years. The acute shortage of foreign exchange means that the country is short of money to buy imported goods, leading to a shortage of food, fuel and other essentials.
The economic crisis sparked weeks of protests across the country demanding the resignation of President Gotabaya Rajapaksa.
government spokesperson Nalka Godaheva Said that Beijing is shying away from restructuring Sri Lanka’s debt because it does not want to set that precedent. He told reporters that the finance ministry would announce the details of the discussions with China later.
Earlier this month, the government said it was suspending repayment of foreign loans, pending talks with International Monetary Fund For debt restructuring plan.
Sri Lanka’s debt problems are partly because it used Chinese loans to build infrastructure such as a port, airport and road network, but the projects are not making money.
Rajapaksa had asked Chinese Foreign Minister Wang Yi, who visited Sri Lanka in January, to restructure those loans.
The government issued its statement a day after Chinese Ambassador to Sri Lanka, Qi Zhenhong, said that China was doing everything possible to help Sri Lanka. Qi scoffed at the suggestion that Beijing has trapped Sri Lanka in a debt trap.
“Western developed countries, especially those that have colonized Sri Lanka in history, should also come and help,” Qi was quoted as saying in a tweet by the Chinese embassy.
“The debt trap is just a myth, deliberately created and propagated by some foreign media and politicians,” Qi said. He said China is neither the largest nor the only lender to Sri Lanka and Beijing’s projects are awarded on concessional terms.
Japan, world Bank and Asia Development Bank are the other big lenders, which started the process of aiding Sri Lanka’s economy much earlier than China.
Qi said it was “unrealistic” to expect all projects or loans to be innocent.
Central Bank figures show that current Chinese debt to Sri Lanka is about $3.38 billion, excluding loans to state-owned businesses, which are counted separately and considered substantial.
Godaheva also said that Almirah has approved a project to grant residence visas for up to 10 years to foreigners who buy apartments in the country costing at least US$75,000 and deposit more than US$100,000 in local bank accounts.
He said the proposal was made to help the construction industry weather the economic crisis and attract more foreign exchange.
Sri Lanka has an external debt of around USD 7 billion due for repayment this year and will need to repay USD 25 billion over the next five years. The acute shortage of foreign exchange means that the country is short of money to buy imported goods, leading to a shortage of food, fuel and other essentials.
The economic crisis sparked weeks of protests across the country demanding the resignation of President Gotabaya Rajapaksa.
government spokesperson Nalka Godaheva Said that Beijing is shying away from restructuring Sri Lanka’s debt because it does not want to set that precedent. He told reporters that the finance ministry would announce the details of the discussions with China later.
Earlier this month, the government said it was suspending repayment of foreign loans, pending talks with International Monetary Fund For debt restructuring plan.
Sri Lanka’s debt problems are partly because it used Chinese loans to build infrastructure such as a port, airport and road network, but the projects are not making money.
Rajapaksa had asked Chinese Foreign Minister Wang Yi, who visited Sri Lanka in January, to restructure those loans.
The government issued its statement a day after Chinese Ambassador to Sri Lanka, Qi Zhenhong, said that China was doing everything possible to help Sri Lanka. Qi scoffed at the suggestion that Beijing has trapped Sri Lanka in a debt trap.
“Western developed countries, especially those that have colonized Sri Lanka in history, should also come and help,” Qi was quoted as saying in a tweet by the Chinese embassy.
“The debt trap is just a myth, deliberately created and propagated by some foreign media and politicians,” Qi said. He said China is neither the largest nor the only lender to Sri Lanka and Beijing’s projects are awarded on concessional terms.
Japan, world Bank and Asia Development Bank are the other big lenders, which started the process of aiding Sri Lanka’s economy much earlier than China.
Qi said it was “unrealistic” to expect all projects or loans to be innocent.
Central Bank figures show that current Chinese debt to Sri Lanka is about $3.38 billion, excluding loans to state-owned businesses, which are counted separately and considered substantial.
Godaheva also said that Almirah has approved a project to grant residence visas for up to 10 years to foreigners who buy apartments in the country costing at least US$75,000 and deposit more than US$100,000 in local bank accounts.
He said the proposal was made to help the construction industry weather the economic crisis and attract more foreign exchange.