Foreign Affairs Minister Ali Sabry yesterday announced the Government’s expectation to finalise the foreign debt restructuring process next month aiming to slash the country’s outstanding payment by about $ 17 billion. Addressing journalists at the Presidential Media Centre, he said the primary focus is on navigating the challenge of debt restructuring.
“We aim to diligently negotiate and finalise the negotiations with private investors associated with sovereign bonds. The Government is determined to achieve this milestone before June. Upon successful completion, Sri Lanka stands to gain a significant advantage of $ 17 billion throughout the entire restructuring process, potentially reducing debt burden through various means including reductions in principal amounts, interest payments or extended repayment timelines. Simultaneously, these endeavours will pave the way for the continuation of developmental activities within the country at the earliest opportunity,” Sabry said.
Glance at Sri Lankan foreign policy
He also gave a brief overview of the recent foreign policy decisions, foreign relations and the high-level visits the Government has undertaken, particularly the recent visit of the Japanese Foreign Minister and Iranian President.
Japanese Foreign minister visits Sri Lanka
“The visit of the Japanese Foreign Minister to Sri Lanka marked an important milestone. Japan has pledged its moral support and endorsed our economic reforms. During discussions, Japan officially encouraged and praised the bold economic reforms that the Government is undertaking and affirmed its commitment to restarting stalled projects. This collaboration with our partners is pivotal in driving our economic agenda forward and fostering development,” the Minister said.
Highlighting the strict adherence to international rules and regulations in interactions with foreign countries, Minister Sabry said the visit of the Iranian President to Sri Lanka raised no concerns within the international community.
Iranian air lines operations in Sri Lanka
“We are actively seeking to attract more investors, as demonstrated by the successful visit of the Iranian President, which led to the inauguration of the Uma Oya project contributing 120 megawatts to our energy grid. We anticipate increased tourism from the region with news of Mahan Air, the Iranian airline, expressing interest in flying to Sri Lanka,” he added.
The Minister also emphasised that Sri Lanka’s adherence to a non-aligned foreign policy, coupled with its commitment to maintaining relations with all nations while safeguarding its sovereignty, has resulted in numerous concessions for the country.
“Sri Lanka prides itself on upholding an independent foreign policy, which doesn’t mean isolation but rather engaging with all nations – a concept known as non-alignment. Our commitment lies in maintaining this legacy of non-alignment, independence and the sovereignty of our Parliament and State. Over time, we have cultivated strong relationships with Western and Eastern countries, as well as our neighbours, which have proven invaluable in overcoming economic challenges,” he added.
Success in debt restructuring
The Minister said securing support from major partners and creditors, including the US, France, India and China was pivotal during negotiations with the IMF. “We have made progress in debt restructuring, gaining the backing of the Official Creditor Committee (OCC) and comprising countries like India, Japan and the Paris Club. We aim to conclude debt restructuring by the end of June, with the support of all major players. This includes finalising agreements with China. Once debt restructuring with the external debt is completed, we can focus on fostering economic growth through partnerships with various parties. Our ongoing engagement with China, which is evident through visits by the President, Prime Minister and myself, underscores our commitment to this approach,” he elaborated.
Minister Sabry highlighted the Government’s endeavours to garner support for economic development by strengthening strong ties with both China and India.
Renewing the Bonds with China
“Prime Minister Dinesh Gunawardena’s recent visit to China, where we signed nine MoUs, reflects our ongoing efforts to strengthen ties. Particularly with India, considerable progress has been made in our collaboration with India, with significant Indian investments currently underway. Additionally, the recent approval by the Cabinet of tariffs and Power Purchase Agreements (PPA) with the Adani Group at $ 0.08 per unit is a notable development,” he added.
Saudi Arabian is interesting in invest in Sri Lanka
Minister Sabry also disclosed that Saudi Arabia has shown a keen interest in investing in Sri Lanka. “Middle Eastern countries are actively seeking to diversify their economies away from fuel dependency and are exploring investment opportunities abroad. We are diligently working to capitalise on these opportunities for the benefit of Sri Lanka,” he said.
The Foreign Affairs Minister assured that diplomatic initiatives are currently in progress to retrieve Sri Lankans detained by smugglers in Myanmar and to protect youth enlisted in mercenary forces linked to the Russia-Ukraine conflict. “These issues have also been addressed with Russian security authorities,” he confirmed.
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