from Beijing over the past two decades to build everything from roads and bridges to soccer stadiums and presidential villas.
Sri Lanka has about $50-billion in foreign currency debt, of which about $10 billion is mainly split between China, Japan and India, according to government data as of December. Japan is part of the Paris Club.its willingness to coordinate with non-Paris Club official bilateral creditors “to provide the necessary financing assurances in a timely manner.
In Zambia’s case, it took about seven months from a staff-level agreement until official bilateral creditors formally communicated their willingness to rework the southern African nation’s debts. The framework may provide a model for Sri Lanka in its debt overhaul by bringing bilateral creditors around the same negotiating table. That would prevent suspicions often prevalent in sovereign-debt restructurings that one creditor is getting a better deal than others.
“When you moved from a negotiating framework that involved simply Paris Club and commercial creditor representative committees and you added the non-Paris Club bilaterals – China – it became three-dimensional chess,” Lee Buchheit, a veteran of two dozen debt restructurings who’s been consulted by the Sri Lankan government, said in a Sept. 14 webinar.