By: Staff Writer
Colombo (LNW): Indian Finance Minister, Nirmala Sitharaman, has extended an invitation to China to join forces with India, Japan, and France in providing financial assistance to Sri Lanka.
She also called on international financial institutions, such as the International Monetary Fund (IMF) and the World Bank, to accelerate their relief measures for countries grappling with debt vulnerabilities.
The Minister emphasized the importance of reforms and debt-relief measures implemented by multilateral development banks (MDBs) for struggling economies.
As India assumes the G-20 Presidency, these measures have become top priorities. Sitharaman urged for a comprehensive, efficient approach to address these issues both within and outside the confines of the IMF and World Bank structures
Sri Lanka required a quick redresses, although outside of the framework because they are a middle-income country,” she noted in a discussion at the India Japan Forum.
In Sri Lanka’s case, Japan, which holds the G-7 Presidency currently, quickly took the lead to address the distress, she pointed out.
“Japan came up, along with France and India, with a quick committee of creditors group, which started addressing the issue. And of course, it was an open forum, it wasn’t limited to just to the three countries, China is welcome to participate as one of the big creditors,” Ms. Sitharaman said.
Japan’s leadership in such cases with “a constructive approach to address debt distress” has been well-received, the Minister said, adding that this is an indicator that the G-7 and G-20 together would come up with solutions to the problem.
While the MDBs are acting to alleviate debt distress, they need to be “more nimble”, the Minister said, noting that “we are looking at situations where countries are waiting for more than three or four years after the application seeking some redresses, to get the actual resolution of the issues”
On the eve of the G20 Finance Ministers and Central Bank Governors meeting, Sitharaman expressed hope that the group could unite to address the debt distress of middle-income countries.
Sitharaman’s call for a more swift and comprehensive approach to debt relief reflects the pressing need for global cooperation in addressing the financial woes of middle-income countries like Sri Lanka.
With India, Japan, and France taking the lead, and the potential inclusion of China in these efforts, there is a glimmer of hope for these economies.
However, the real test lies in the ability of these major economies to combine their efforts effectively and the willingness of international financial institutions to speed up their relief measures.
