• US State Under Secy. for Political Affairs Nuland says China must offer ‘credible/specific assurances’ to IMF’

Under Secretary of State for Political Affairs of the US Victoria Nuland noted yesterday (1), during her official visit to Sri Lanka, that China’s assurances with regard to restructuring Sri Lanka’s debt are “so far, insufficient”, but that the US expects it would provide “credible and specific assurances”.

She added that such assurances would record China’s readiness to join the rest of Sri Lanka’s creditors in meeting the International Monetary Fund’s (IMF) standards with regard to debt restructuring. 

“We are increasingly seeing all the rest of Sri Lanka’s creditors come forward with assurances and now all eyes are on China to do the same,” she said while addressing the media in Colombo yesterday.

Responding to a query by the media regarding China’s two-year debt moratorium granted to Sri Lanka, she further said: “We want to see an IMF agreement as quickly as possible as that is what Sri Lanka deserves and needs. We, the US, are prepared to do our part. Our Paris Club partners are prepared to do their part. India has made strong commitments that they will provide the credible assurances that the IMF is looking for. As I said before, what China has offered so far is not enough. We need to see credible and specific assurances that they will meet the IMF standards of debt relief.” 

She further noted that it is a critical moment for Sri Lanka as the Government is working with international creditors to stabilise the economy, and place Sri Lanka back on the map by repairing stability, and pushing for recovery and growth. “It is also a vital time for Sri Lanka to strengthen its democracy, governance and reconciliation”. She also said that this includes proceeding with the Local Government Election this March. 

“Getting people across the country a voice in the future, restoring the national dialogue and reconciliation, which needs to show results to all Sri Lankans, and proceeding with the reform of the Prevention of Terrorism (Temporary Provisions) Act (PTA) so that it meets international standards, are essential. We had a chance to meet with President Ranil Wickremesinghe to talk about ongoing US support for Sri Lanka at this complex time, particularly our support for the quick conclusion of the negotiation with the IMF,” she added. 

Meanwhile, she elaborated that the US will be contributing an additional $ 30 million to go towards school lunches for 96,000 students across Sri Lanka in 850 public schools. “We are also beginning to see, including today, the delivery of 770 metric tonnes of fortified rice and vegetable oil to meet food security-related needs. This is on top of more than $ 240 million in support that the US had provided Sri Lanka just over the course of last year (2022).” 

Nuland also met Minister of Foreign Affairs, President’s Counsel M.U.M. Ali Sabry, Central Bank Governor Dr. Nandalal Weerasinghe, and Secretary to the Treasury and Finance Ministry Mahinda Siriwardana and noted that those conversations were focused on regional issues, global issues, and also the IMF negotiations and the strong impetus for recovery and growth here. 

She also said that during her visit, she had had an inspiring meeting with a dozen of young Sri Lankan climate activists and entrepreneurs. “They were doing everything from recovering plastics in the Ocean to advancing climate education across the country, to farming seaweeds and milk product growth and agriculture here in Sri Lanka. The way these young people are coming up with concrete solutions not just for Sri Lankan issues but for problems of climate change across the globe is inspiring.” 

She also mentioned that last summer, the Sri Lankan people had made clear their desire for a cleaner and more accountable Government and a more prosperous and inclusive democracy. 

“The US is proud to be Sri Lanka’s partner as you do the hard work as we know that it is hard work that will secure the future for all Sri Lankans,” she said.

Nuland’s visit will highlight US support for Sri Lanka’s ongoing reforms to foster economic prosperity, protect human rights and promote reconciliation.

Meanwhile, State Minister of Finance Shehan Semasinghe told The Daily Morning on Tuesday (31 January) that the Government is confident and optimistic that it would receive the IMF Board-level approval for the desperately needed Extended Fund Facility within the first quarter of this year, shortly after US Ambassador to Sri Lanka Julie Chung assured Semasinghe that assistance due from the IMF to Sri Lanka is likely to speed up with the cooperation of all countries. When queried as to whether the two-year debt moratorium promised by the Export-Import Bank of China to Sri Lanka is sufficient, he said: “The letter has to be accepted by the IMF. It will have to fulfil the conditions that they require; however, none of the assurances, negotiations, or discussions can be done the way we want.”