Author: TELO Admin

(THE HINDU) – China has offered Pakistan’s visiting Army Chief technical help as the country deals with record floods but did not announce any substantial financial assistance that its “all-weather” ally has been seeking.

Both Pakistan and Sri Lanka, facing financial stress, have been engaged in long-running talks with Beijing for assistance, but with negotiations in both cases having made little headway, both countries have turned to the International Monetary Fund (IMF). Their new IMF commitments are now likely to impact their owed payments to China, which has lent the two countries more than $26 billion in the past five years.

Following talks in Xi’an between Pakistan’s Chief of Army Staff General Qamar Javed Bajwa and China’s Defence Minister General Wei Fenghe, the Chinese side expressed willingness to provide technical assistance for flood relief work, Pakistan’s official Inter-Services Public Relations said.

Chinese State media quoted Gen. Wei as calling on both countries “to tide over difficulties together, fully trust each other, and unswervingly support each other’s core interests on the way forward” but did not detail any offers of assistance. Chinese media noted that Beijing had previously provided relief supplies worth $57 million.

Earlier this month, Pakistan’s government assured the IMF it would reduce capacity payments owed to Chinese projects or seek to restructure loans, with over $1.09 billion still owed to Chinese power producers.

Meanwhile, Sri Lanka has been pressing Beijing for a $4 billion loan, but talks that have dragged on for several months appear to have not yielded an agreement. Rather than restructure Sri Lanka’s existing debt, Beijing has indicated it would prefer to instead extend new loans to an already heavily indebted economy.

On September 1, Sri Lanka and the IMF reached a staff-level agreement with the Fund set to support Sri Lanka with an Extended Fund Facility (EFF) of $2.9 billion, contingent upon Sri Lanka’s successful debt restructuring efforts, which will hinge in part on China’s agreeability. Sri Lanka’s creditors also include International Sovereign Bond (ISB) holders, multilateral lending agencies, and other bilateral partners such as Japan and India.

While Japan and India have been very supportive of the IMF process from the beginning, all eyes were on China to see if it would play ball, although some analysts in Sri Lanka expressed hope citing China’s willingness to work on a debt relief deal in Zambia.

In response to Sri Lanka’s IMF agreement, Beijing said as a “traditional friendly neighbor” of Sri Lanka and a “major shareholder” of the IMF, China has “always been encouraging” the IMF and other international financial institutions “to continue to play a positive role in supporting Sri Lanka’s response to current difficulties, efforts to ease debt burden and realize sustainable development.” Sri Lanka is currently in talks with its creditors, with the hope of qualifying for the Fund’s EFF.

The first consignment from an Australian donation totaling AUD22 million (approximately USD15 million) has arrived in Sri Lanka and will soon be distributed to those most affected by the ongoing economic crisis.

The consignment, consisting of 600 metric tonnes of rice, forms part of a larger consignment of rice, pulses and cooking oil, due to arrive in the country soon, the World Food Programme (WFP) said.

“Australia and Sri Lanka share many decades of friendship, and this latest contribution is an extension of our goodwill during this unprecedented crisis,” said Paul Stephens, Australia’s High Commissioner to Sri Lanka. “We are supporting WFP to provide life-saving food to people who are struggling with price increases, job losses and reduced incomes”.

“Australia was the first to contribute to WFP’s emergency response, enabling us to kick-off much needed assistance to those hard-hit by the ongoing crisis,” said Abdur Rahim Siddiqui, WFP Sri Lanka’s Representative and Country Director. “Through Australia’s generous donation, we are providing cash and in-kind food to the most vulnerable, including pregnant and breastfeeding women and school children,” he added.

Sri Lanka’s economic crisis has increased the level of food insecurity and recent WFP surveys show the situation could deteriorate further in the coming months without urgent assistance. Launched in June, WFP’s emergency response aims to help 3.4 million of those most at risk.

The resolution to constitute the Parliament Committee designated “National Council” in connection with the concept of an all-party Government, which was a major demand that emerged from the people’s protests; the Aragalaya, was passed within the Parliament without a vote on Tuesday (20)

However, several parties objected to the move, stating that it is not a mechanism that fulfills people’s expectations.

According to the resolution passed today, the members of the National Council will be chaired by the Speaker, while the members constitute of the Prime Minister, the Leader of the House of Parliament, the Leader of the Opposition, and the Chief Organizer of the ruling party.

Apart from that, not more than 35 members decided by the Leaders of the political parties should be appointed for the council.

The assembly will be entrusted with setting common priorities to guide the formulation of short, medium and long-term national policies, agreeing on short- and medium-term common minimum programs in relation to economic stabilization and organization of special meetings attended by ministers, chairpersons of special committees and youth observers of youth organizations.

The council will also posses the ability to call reports from current functioning committees.

India on Tuesday responded to a media query regarding reports on “no further financial support from New Delhi to Colombo”, stating that it has extended around USD 4 billion in bilateral assistance this year for the people of Sri Lanka.

Responding to a media query, the spokesperson of the High Commission of India in Colombo also advocated other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties.

“We have seen the relevant media reports. We would like to emphasise that India has extended unprecedented bilateral assistance amounting close to USD 4 billion this year for ameliorating the difficulties faced by the people of Sri Lanka. India has also advocated to other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties,” India in Sri Lanka said in a tweet.

In a bid to sustain it from debt, India also extended its continuous support to Sri Lanka in all possible ways, particularly by promoting long-term investments from New Delhi in key economic sectors in Colombo for its early economic recovery and growth.

“We have also noted the conclusion of a Staff Level Agreement between IMF and Government of Sri Lanka. Its further approval within IMF is contingent upon, inter alia, on Sri Lanka’s debt sustainability. We continue to be supportive of Sri Lanka in all possible ways, in particular by promoting long-term investments from India in key economic sectors in Sri Lanka for its early economic recovery and growth,” the spokesperson of the High Commission also said.

On August 22, India handed over 21,000 tonnes of fertilizer to its crisis-ridden neighbour.
Highlighting India-Sri Lanka’s close and longstanding relationship, the High Commission noted that the people of Sri Lanka continue to avail of scholarships for higher education and skills training in premier Indian institutions.

“In addition our bilateral development cooperation projects in Sri Lanka, which cumulatively total about USD 3.5 bn, are ongoing. Sri Lankans also continue to avail of scholarships for higher education and skills training in premier Indian institutions. These aspects of our close and longstanding cooperation with Sri Lanka also contribute to the efforts for addressing Sri Lanka’s current economic difficulties,” it added.

India under its ‘Neighbourhood First’ policy, has always come forward to help the debt-ridden island country. India has extended 8 Lines of Credit (LOCs) to Sri Lanka amounting to USD 1,850.64 million in the past 10 years.

India has been at forefront of extending economic assistance to Sri Lanka as per their requirements and is one of the countries that have provided the maximum amount of assistance in time of need.

Since the beginning of 2022, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans. Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in free fall since the onset of the COVID-19 pandemic.

Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel, leading to power cuts in the country. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries.

(ANI)