Exclusive: Japan seeks to organise Sri Lanka creditors’ meeting on debt crisis

>>> Don’t Miss Today’s BEST Amazon Deals!<<<<

TOKYO, Aug 26 (Reuters) – Japan is seeking to organise a Sri Lanka creditors’ conference, hoping it could help solve the South Asia nation’s debt crisis, but uncertainties cloud the outlook for any talks, three people with knowledge of the planning said.

Tokyo is open to hosting talks among all the creditor nations aimed at lifting Colombo from its worst debt crisis since independence, but it is not clear whether top creditor China would join and a lack of clarity remains about Sri Lanka’s finances, one source told Reuters.

Japan would be willing to chair such a meeting with China if that would speed up the process for addressing Sri Lanka’s debt, estimated at $6.2 billion on a bilateral basis at the end of 2020, this source said.

Register now for FREE unlimited access to Reuters.com

President Ranil Wickremesinghe told Reuters last week that Sri Lanka would ask Japan to invite the main creditor nations to talks on restructuring bilateral debts. He said he would discuss the issue with Prime Minister Fumio Kishida in Tokyo next month, when he is expected to attend the funeral of the assassinated former premier Shinzo Abe. read more

Tokyo, the number two creditor, has a stake in rescuing Sri Lanka, not just to recoup its $3 billion in loans but also its diplomatic interest in checking China’s growing presence in the region.

S&P Global this month downgraded Sri Lanka’s government bonds to default after it missed interest and principal payments. The island nation of 22 million people off India’s southern tip, with debt at 114% of annual economic output, is in social and financial upheaval from the impact of COVID-19 pandemic on top of years of economic mismanagement.

An International Monetary Fund (IMF) team met Wickremesinghe on Wednesday to discuss a bailout, including restructuring $29 billion in debt, as Colombo seeks a $3 billion IMF aid programme. read more

The president met the same day with Japan’s ambassador.

Tokyo believes a new “platform” is needed to pull creditors together, the sources said.

“Sri Lanka is running out of time since it defaulted on its debt. The priority is for creditor nations to agree on an effective scheme,” one source said.

“Japan is keen to move this forward. But it’s not something Japan alone can raise its hand and push through,” said the source, adding that the cooperation of other nations was crucial.

Japan’s Foreign Ministry declined to comment. Sri Lanka’s central bank and Finance Ministry did not immediately respond to requests for comment. An IMF spokesperson declined to comment.


Concerns include rivalry and territorial tensions between big creditors China and India, while Sri Lanka would have to commit to reforming its finances and disclose more information about its debt, the sources said.

Last month, shortly after Wickremesinghe took office when his predecessor fled the country, Chinese President Xi Jinping wrote to him that he was “ready to provide support and assistance to the best of my ability to President Wickremesinghe and the people of Sri Lanka in their efforts”. read more

But the sources said getting Beijing’s cooperation on a debt restructuring was complicated by factors such as a large number of lenders and that China was baulking at taking a “haircut” on its loans and at reducing Colombo’s debt burden.

A Chinese foreign ministry spokesman told Reuters that Beijing was “willing to stand with relevant countries and international financial institutions and continue to play a positive role in helping Sri Lanka respond to its present difficulties, relieve its debt burden and realise sustainable development.”

Japan hopes to see a new debt restructuring framework resembling one set up by the Group of 20 big economies targeting low-income countries. Sri Lanka does not fall under this “common framework” because it is classified as a middle-income emerging country.

“It must be a platform where all creditor nations participate” to ensure they all shoulder a fair share in waiving debt, another source said. The third said, “Until these conditions are met, it would be difficult for any talks to succeed.”

The common framework, launched by the G20 and the Paris Club of rich creditor nations in 2020, provides debt relief mainly through extension in debt-payment deadlines and reduction in interest payments.

Some people involved think an initial creditors’ meeting could be held in September, but one source said it would “take a little while, possibly several months”.

Restructuring talks are only possible after the IMF scrutinises Sri Lanka’s debt, the sources said.

Register now for FREE unlimited access to Reuters.com

Reporting by Tetsushi Kajimoto and Takaya Yamaguchi in Tokyo; Additional reporting by Yoshifumi Takemoto and Kentaro Sugiyama in Tokyo, Uditha Jayasinghe in Colombo, Eduardo Baptista in Beijing and David Lawder in Washington; Writing by Leika Kihara and Tetsushi Kajimoto; Editing by William Mallard

Our Standards: The Thomson Reuters Trust Principles.

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Japan Cabinet Sets Abe State Funeral Amid Mixed Public View

By Associated Press
July 22, 2022

Japan’s Cabinet will now hold a state funeral for the assassinated former Prime Minister Shinzo Abe in September.

Japan’s Cabinet on Friday formally decided to hold a state funeral on Sept. 27 for assassinated former Prime Minister Shinzo Abe amid national debate over the plan, which some criticize as an attempt to glorify a divisive political figure.

Abe was gunned down earlier this month during a campaign speech in the western city of Nara, shocking a nation known for safety and strict gun control. The alleged gunman was arrested immediately after the shooting and is being detained for interrogation as authorities seek to formally press murder charges.

Chief Cabinet Secretary Hirokazu Matsuno said a state funeral is appropriate because of Abe’s “distinguished contributions” as the longest-serving Japanese leader and his “outstanding leadership and decisive actions” in broad areas including economic recovery, the promotion of diplomacy centered on the Japan-U.S. alliance, and reconstruction following the 2011 tsunami disaster.

Matsuno said the funeral will be a non-religious ceremony held at the Nippon Budokan, an arena originally built for the 1964 Tokyo Olympics that has since become a popular venue for sports, concerts and cultural events. The government also holds an annual memorial service on Aug. 15 marking Japan’s World War II defeat at the arena.

Foreign dignitaries will be invited to Abe’s state funeral, Matsuno said, though further details, including the estimated cost and number of attendees, are yet to be determined.

Prime Minister Fumio Kishida last week announced plans for a state funeral that some see as a move to stabilize his grip on power by pleasing ultra-conservatives who backed Abe, who led the biggest party wing.

The plan has received a mixed reaction from opposition leaders and the public. Some oppose the use of tax money on the event, while others criticize Kishida’s governing party for politicizing Abe’s death to glorify him and attempt to end debate over his highly divisive legacy, including his hawkish diplomatic and security policies and revisionist stance on wartime history.

On Thursday, a civil group opposing plans for Abe’s state funeral submitted an injunction request asking the Tokyo District Court to suspend the Cabinet decision and budget for the event, saying a state-sponsored funeral without Parliament approval violates the constitutional right to freedom of belief.

Dozens of protesters stood outside the Prime Minister’s Office on Friday to oppose the Cabinet decision. An opposition leader, Mizuho Fukushima, said the decision was not based on public consensus, has no legal basis and should be scrapped.

Abe’s private funeral was already held at a Tokyo temple and attended by about 1,000 mourners, including lawmakers, business leaders and others.

Abe’s assassination shed a light on his and his party’s decades-long questionable links to the Unification Church.

The alleged assassin, Tetsuya Yamagami, 41, has told police that he killed Abe because of his links to a religious group that he hated. His reported accounts and other evidence suggest he was distressed because his mother’s massive donations to the church had bankrupted the family.

Additional reporting by The Associated Press. 

Source: newsy.com

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<