Japanese Finance Minister welcomes coordinated debt restructuring process on SL

Japanese Finance Minister Shunichi Suzuki 

•  Insists on fast-tracking debt restructuring for low-income economies under Common Framework, improve predictability of process
• Japan expects ADB to mobilise its expertise, work with IMF, WB to boost debt management capacity, transparency in DMCs
• Asserts on necessity to improve debt data transparency and accuracy to prevent future debt crises
• Called on member States to stay vigilant for global downside risks to ensure economic stability in region

By Charumini de Silva

Japanese Finance Minister Shunichi Suzuki last week welcomed the launch of a coordinated debt restructuring process of official bilateral creditors of Sri Lanka, whilst insisting it is crucial that the creditor committees swiftly implement debt restructuring for low-income economies, under the Common Framework and increase the predictability of the process.

Speaking at the Board of Governors Business Session at the 56th Asian Development Bank (ADB) Annual Meeting in Incheon, Republic of Korea, he said that Japan was expecting the ADB to mobilise its expertise and work with the International Monetary Fund (IMF) and the World Bank (WB) enhance debt management capacity and transparency in developing member countries (DMCs).

“For vulnerable middle-income economies, all creditors and donors should work together to restore debt sustainability in a coordinated manner. In this regard, Japan welcomes the launch of a coordinated debt restructuring process of official bilateral creditors of Sri Lanka. It is essential to improve debt data transparency and accuracy in order to prevent future debt crises,” he asserted at the briefing covered by the Daily FT.

Against this backdrop, Suzuki also noted that Japan leads the data-sharing exercise among creditor countries.

During the G20 meeting of Finance Ministers and Central Bank Governors in Washington, the Japanese Government, jointly with India and France launched a common platform for talks among creditor nations to resolve the debt crisis of Sri Lanka.

Japan’s Finance Minister has been instrumental in urging all creditor nations to gather and discuss Sri Lanka’s debt at the same table.

Suzuki also called on the region to stay vigilant for the downside risks of the prolonged Russian invasion of Ukraine, debt issues in developing economies, and increasing financial risks seen in the recent turmoil of the banking sector in the US and Europe as it could hinder global economic recovery – to ensure economic stability in the region.

Japan is a long-time partner in Sri Lanka’s socio-economic development as well as in the process of peace enhancement and reconciliation. Since 1952, Japan has promptly provided relief and assistance during all difficult times. Japan is also a long-standing donor to the Government of Sri Lanka. Japan’s latest funding is an extension of its support to the people of Sri Lanka to help safeguard communities affected by the economic crisis.

Japan is also a founding member and a donor country of the ADB. Japan has provided $ 22.05 billion in capital subscription to ADB. The country has also contributed and committed $ 15.98 billion to Special Funds since becoming a member.