{"id":80785,"date":"2023-01-08T00:09:45","date_gmt":"2023-01-08T04:09:45","guid":{"rendered":"http:\/\/dbsjeyaraj.com\/dbsj\/?p=80785"},"modified":"2023-01-08T21:43:43","modified_gmt":"2023-01-09T01:43:43","slug":"nearly-200-world-renowned-economists-and-scholars-issue-statement-calling-upon-all-lenders-to-share-the-burden-of-debt-re-structuring-by-cancelling-all-debts-of-cash-strapped-sri-la-2","status":"publish","type":"post","link":"https:\/\/dbsjeyaraj.com\/dbsj\/?p=80785","title":{"rendered":"Nearly 200 World Renowned Economists and Scholars Issue Statement Calling upon all \u201cLenders\u201d to share the burden of Debt Re-structuring by Cancelling all Debts of Cash-strapped Sri Lanka"},"content":{"rendered":"

By<\/p>\n

Meera Srinivasan<\/strong><\/p>\n

Sri Lanka\u2019s recovery from last year\u2019s devastating economic crisis will need its creditors to \u201cshare the burden\u201d of debt restructuring, leading global economists have said, calling all lenders to cancel the debt of the cash-strapped island nation.<\/p>\n

In a statement issued on Sunday, eminent economists and scholars world over observed that amid Sri Lanka\u2019s crucial debt negotiations, \u201call lenders \u2014 bilateral, multilateral, and private \u2014 must share the burden of restructuring, with assurance of additional financing in the near term.\u201d<\/p>\n

However, Sri Lanka cannot ensure this on its own, they noted. \u201cIt requires much greater international support. Instead of geopolitical manoeuvring, all of Sri Lanka\u2019s creditors must ensure debt cancellation sufficient to provide a way out of the current crisis,\u201d the statement said.<\/p>\n

The nearly 200 signatories to the statement included economists Jayati Ghosh, Thomas Piketty, Yanis Varoufakis, Prabhat Patnaik, Utsa Patnaik, Jean Dr\u00e8ze, Ha-Joon Chang, Jomo Kwame Sundaram, and writer Amitav Ghosh.<\/p>\n

<\/p>\n

Their call comes months after Sri Lanka embarked on debt restructuring talks with its diverse group of creditors, including China, Japan and India, its three major bilateral lenders. Their financing assurances are crucial to Sri Lanka obtaining a $2.9 billion package from the IMF.<\/p>\n

As the import-reliant island nation\u2019s Balance of Payments crisis spiralled and led to a painful economic crash last year, the government opted for a preemptive default on its $51 billion foreign debt in April 2022.<\/p>\n

The senior academics held Sri Lanka\u2019s private creditors responsible for the country\u2019s first ever default, arguing: \u201cSuch lenders charged a premium to lend to Sri Lanka to cover their risks, which accrued them massive profits\u201d and contributed to the default. Private creditors own nearly 40% of Sri Lanka\u2019s external debt stock mostly in the form of International Sovereign Bonds (ISBs), but higher interest rates mean that they receive over 50% of external debt payments, they pointed out.<\/p>\n

The default move came while crippling shortages sparked mass street protests across the island. The agitations spanned months and ousted former President Gotabaya Rajapaksa in July 2022. <\/p>\n

President Ranil Wickremesinghe was elected in his place, through a Parliament vote. In September 2022, Sri Lanka reached a staff level agreement with the IMF for a provisional bailout package, that the Fund made contingent on adequate financing assurances from Sri Lanka\u2019s creditors. His government has pinned its hopes on IMF support, mainly to qualify for more credit that it deems necessary for reviving its battered economy.<\/p>\n

However, Sri Lanka missed the December deadline to obtain the IMF Board\u2019s approval, and is still in talks with creditors to obtain assurances. Governor of the Central Bank of Sri Lanka Nandalal Weerasinghe told The Hindu in December 2022, that Colombo had provided \u201call information possible\u201d to its bilateral creditors\u201d and was awaiting assurances from India and China.<\/p>\n

Courtesy:The Hindu<\/em><\/p>\n

Tweet<\/a><\/div>","protected":false},"excerpt":{"rendered":"

By Meera Srinivasan Sri Lanka\u2019s recovery from last year\u2019s devastating economic crisis will need its creditors to \u201cshare the burden\u201d of debt restructuring, leading global economists have said, calling all lenders to cancel the debt of the cash-strapped island nation. In a statement issued on Sunday, eminent economists and scholars world over observed that amid …<\/p>\n

Continue reading ‘Nearly 200 World Renowned Economists and Scholars Issue Statement Calling upon all \u201cLenders\u201d to share the burden of Debt Re-structuring by Cancelling all Debts of Cash-strapped Sri Lanka’ »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/80785"}],"collection":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=80785"}],"version-history":[{"count":1,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/80785\/revisions"}],"predecessor-version":[{"id":80786,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=\/wp\/v2\/posts\/80785\/revisions\/80786"}],"wp:attachment":[{"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=80785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=80785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dbsjeyaraj.com\/dbsj\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=80785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}