Sunday, February 5, 2023

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US says political reforms need to accompany economic reforms in Sri Lanka.

USAID Administrator Samantha Power met with Sri Lanka’s Foreign Minister Ali Sabry to further USAID’s understanding of the Government of Sri Lanka’s priorities and reforms to address the country’s economic crisis.

The two discussed how USAID can support a viable path forward for Sri Lanka’s recovery and growth.

Administrator Power, who visited Sri Lanka in September, reiterated the U.S. commitment to supporting Sri Lanka to help resolve its complex crisis, including addressing the urgent needs of Sri Lanka’s most vulnerable and marginalized communities.

She underscored that political reforms need to accompany economic reforms in Sri Lanka.

USAID remains committed to further cultivating its longstanding partnership with Sri Lanka to help secure peace and prosperity.

China must cooperate with Sri Lanka in its debt restructure process, said Samantha Power, Administrator of the United States Agency for International Development (USAID), on Sunday, while assuring Colombo of the US’s support.

She expressed this view during her vist to Sri Lanka some times back . Sri Lanka, which opted for a pre-emptive 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).

“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”.

Further, 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.”

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