Japan is working to organize a meeting of Sri Lanka’s creditors by the end of this year in hopes of solving the latter’s debt crisis, the Japanese national newspaper The Yomiuri Shimbun reported.
The meeting, which will discuss such issues as finding ways to reduce debt payments, aims to curb China’s influence by helping Sri Lanka cope with its so-called debt traps, which arose after China provided huge loans to the country to fund infrastructure developments and other projects.
Sri Lankan President Ranil Wickremesinghe asked Japan for help during talks with Prime Minister Fumio Kishida and other people during a visit to Japan at the end of September to attend the funeral of former Prime Minister Shinzo Abe, according to Japanese government sources.
The meeting is expected to focus on measures to reduce debt payments and postpone repayment deadlines, among other related steps. Japan continues to urge other creditor countries to play a proactive role in dealing with the issue.
In April, the Sri Lankan government introduced an emergency measure to suspend its repayment of external debts.
According to the Sri Lankan government, the nation’s external debt at the end of June stood at $46.6 billion (¥6.93 trillion), accounting for about 70% of its gross domestic product.
Sri Lanka has more than 20 creditors, with China topping the list at $7.3 billion (about ¥1.086 trillion), followed by Japan at $2.7 billion (about ¥402 billion) and India at $1.7 billion (about ¥253 billion).
While struggling to repay its debts, Sri Lanka in 2017 effectively transferred to China the operating rights of one of its ports. (NewsWire)