On the heels of China’s announcement on the debt treatment agreement for
nearly $4.2 billion debts, Sri Lanka President Ranil Wickremesinghe is to leave for China on
Sunday night.
The main purpose of the visit is to attend the third Belt and Road Forum for International
Cooperation which is scheduled to be held of October 17 and 18. However during his first
ever visit to Beijing after assuming duties as the head of state, President Wickremesinghe is
to meet Chinese President Xi Jinping and several political and business leaders.
On Thursday Sri Lanka’s Finance Ministry announced that Sri Lanka and the Exim Bank of
China has agreed on key principles to restructure 4.2 billion US dollars in loans.Having lent
around $7 billion, China is Sri Lanka’s largest bilateral creditor ahead of Japan and India.
The debt restructure deal is to help in getting past the IMF's first review in the coming weeks
and in securing the release of a second IMF tranche of about $334 million. In a desperate
measure to come out of its worst ever economic crisis, Sri Lanka entered to a $2.9 billion
bailout package with the International Monetary Fund (IMF) in September 2022 and started
debt negotiation with key bilateral creditors including Japan, India and Paris Club creditors.
However creating a major barrier for the process China evaded coming to the table together
with other creditors.
In his recent statements President Wickremesinghe has described China in a positive light but
complaining against the West and the United States.
Attending a Global Summit in Berlin last month Sri Lanka President reiterated the need to
have a comprehensive dialogue between the West and China, the United States and China
and the European Union and China as a robust international plan to address the global
challenges anticipated in 2024.
He even criticized that the great power rivalries and geopolitics have been an emerging threat
to developing countries like Sri Lanka for an open access to trade, investment, capital and etc.
In an opening speech of the 'Berlin Global' Dialogue in Berlin, Germany, President
Wickremesinghe said “China's Belt and Road Initiative has been labelled as a cohesive
program, and the participating countries like Sri Lanka have been looked upon with
suspicion. This will further hurt economic prospects in the Global South, and the polarisation
will become more evident,”. End
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