TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida will meet with Sri Lanka’s president on Thursday. The South Asian nation is looking to step up its efforts to restructure its debt and repair an economy badly damaged by the deep financial crisis.
The meeting between Prime Minister Kishida and President Ranil Wickremesinghe came days after the International Monetary Fund (IMF) called for a timely restructuring agreement with the country’s creditors. Global financial institutions said Sri Lanka’s macroeconomic conditions were improving.
The meeting is unlikely to result in new initiatives, but the two sides will consider work on Sri Lanka’s debt restructuring, Japanese officials told Reuters.
Sri Lanka defaulted on its foreign debt for the first time in its history in April last year as its economy was hit by the worst financial crisis since independence from Britain in 1948.
Last month, Japan, France and India announced a common platform for bilateral creditor consultations to coordinate the restructuring of Sri Lanka’s debt.
China attended the first meeting of creditor nations earlier this month as an observer and expressed hope that the Chinese government will become more involved in resolving the debt problems of developing countries.
China, Sri Lanka’s largest bilateral lender, is seen as key to talks over the country’s debt restructuring efforts.
Sri Lanka owes $7.1 billion to creditors, of which $3 billion is owed to China, $1.6 billion to India and $2.4 billion to the Paris Club, a creditor group.
The island nation secured a $2.9 billion bailout from the IMF in March, but must have a debt restructuring framework in place by September to move the program forward or it is slowly starting to recover. There is a danger of further damaging the economy.
Interviewed by Tetsushi Kajimoto Edited by Sri Navaratnam
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