Treat all creditors equally – US Envoy

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US Ambassador to Sri Lanka Julie Chung said, to move forward with the International Monetary Fund (IMF) debt restructuring and financial reforms, it is critical that all creditors receive comparable, equal treatment. This is one of the key components that many countries undergoing an IMF programme must deal with and address, because no country can get a special deal. All countries must get together to demonstrate their support for Sri Lanka.

In an interview with a local TV station, on Sunday (12), the US Ambassador pointed out that political stability and economic stability go hand in hand and welcomed the steps of going to the IMF and hiring debt and legal advisors.

“Going to the IMF was a positive step and the Prime Minister of Sri Lanka also started off early in his term being very transparent and honest with the public about the challenges at hand and what he intends to do,” she said, adding that she hoped the PM continues to communicate very regularly and transparently to the country about what his plans are and his solutions.

On the question whether the US is concerned about Sri Lanka moving into a debt trap with China, she responded it is not just an Indian concern, but a concern among all creditors. 

“Those creditors are treated equally and comparably. That is a common standard at the IMF. We’ve seen instances around the world in different countries where certain companies and countries did not want that equal treatment and they wanted special favourable treatment.  So this goes beyond India. I think many countries are calling for that equal treatment.”  

“Sri Lanka again has made the right decision to go to the IMF, in my opinion,” she said, further saying that maybe they could have done it sooner, but now that decision has been made to take important steps for reforms. 

She said the IMF has laid out several reform structures and the Prime Minister has already taken a few steps in that direction. She pointed out that as one of the largest stakeholders in the IMF, the US wants to support Sri Lanka, as it takes these steps that will open up financing opportunities not only from international financial institutions and multilateral banks, but individual countries as well.  

“IMF’s initial steps are very positive and even working with the international community, with international financial institutions, the World Bank, IMF and others.  This is a time when all of us, all the countries, need to come together and support and help Sri Lanka in this very tough period,” she added.

“We don’t directly get involved in those negotiations. That’s a Sri Lankan responsibility.  They’ve hired their advisors to directly negotiate. But we will certainly help within the IMF framework, as Sri Lanka makes these steps, to continue encouraging the steps for reform that are open to financing and bring the precious dollars that are greatly needed in the country.”

She also said good governance and transparency are not US standards, but international standards and one should have these strong institutions and pillars in place. “And that includes every stakeholder. Not just the executive government, but parliamentary representatives, executives in business, and civil society.” 

The US Ambassador also remarked that the Bar Association of Sri Lanka (BASL) is very active and has played an important role in bringing debate and discourse into the public eye and for all parliamentarians as well.  

She also viewed that there is a deep effort by the Government to create more parliamentary oversight committees, to make sure that they are responsive to the people’s needs and demands. “And we’re happy to help, again, develop that capacity within the Parliament as well,” she added. 

By Sulochana Ramiah Mohan