China must cooperate with Sri Lanka on debt restructure: Samantha Power


'Political reform and economic recovery must go hand in hand in Sri Lanka’

China must cooperate with Sri Lanka in its debt restructure process, Samantha Power, Administrator of the United States Agency for International Development (USAID) said on Sunday, while assuring Colombo of the U.S.’s support. Sri Lanka, which opted for a preemptive sovereign default in April amid a rapid downturn, must negotiate with its diverse creditors — International Sovereign Bond holders, multilateral agencies, bilateral creditors such as China, Japan, and India — and restructure its outstanding debt to them, in order to qualify for a $2.9 billion-package from the International Monetary Fund (IMF).

Addressing a media conference at the end of her two-day visit, Ms. Power said: “The United States as a creditor, and as a member of the Paris Club, stands ready to participate in the restructuring of Sri Lanka’s debt. It is imperative that all of Sri Lanka’s creditors, most notably the People’s Republic of China cooperate in this process openly and on comparable terms with each other.”

The observation appeared in line with her remarks in New Delhi in July, that “opaque” Chinese loans financing “headline-grabbing” infrastructure projects in Sri Lanka had contributed to the island nation’s crisis. It also echoed India’s statement after Sri Lanka reached a staff-level agreement with the IMF that “creditor equitability and transparency are important”. Creditors, she said, had the chance to make “a very positive difference and relieve Sri Lanka of some of its acute debt distress.” During Ms. Power’s visit the USAID pledged $ 60 million towards fertilizers for farmers and emergency humanitarian assistance.

Further, Ms. Power said her delegation underscored to the Sri Lankan leadership that political reform and accountability must go “hand in hand” with economic recovery. “What we stressed is, given the demands and the aspirations of the Sri Lankan people, the importance of being transparent about that roadmap about those intentions, and making sure that the political reform is not somehow portrayed, as it is by some, [as being] in tension with economic stability.” President Wickremesinghe’s office, in a statement following the meeting, said he outlined the government’s plans to enact a legislation aimed at clipping the Executive’s powers, a new legislation against terrorism, and electoral reforms. On the U.S.’s engagement at the UN Human Rights Council, where a resolution on Sri Lanka is expected soon, Ms. Power said it was “very clear on the ground” that the aspirations of those who survived the long civil war, seeking justice, and to secure “basic facts and basic truth” about missing persons remain, despite “multiple attempts” and processes to generate progress. “So it is in that spirit that the United States engages as part of the core group [on Sri Lanka] in Geneva,” said Ms. Power, who has earlier served as the U.S. Ambassador to the UN. “As somebody who has travelled and met with survivors of the violence and seen as so many mothers still carrying the photos of their children who have gone missing, I would say that any step that can be made to offer solace to families who have endured, the kind of violence and suffering that that has occurred in this country, is important for us all to stand behind, “ she said.