Japan seeks Sri Lanka recovery for regional stability

Colombo: Strategically placed Sri Lanka s economic recovery was essential for stability in the Indo Pacific region, Japan s foreign minister said Satu...

Colombo: Strategically placed Sri Lanka's economic recovery was essential for stability in the Indo-Pacific region, Japan's foreign minister said Saturday, urging Colombo to swiftly restructure its foreign debt.

Yoko Kamikawa said after talks with her Sri Lankan counterpart that Colombo should secure agreements with bilateral lenders and international sovereign bondholders to unlock suspended foreign funding.

The Sri Lankan government which defaulted on its $46 billion external debt in April 2022 had hoped to finalise deals with foreign creditors by April but there have been no final agreements yet.

Kamikawa said she "stressed the importance of reaching a debt restructuring agreement with all the creditors", including China -- the largest bilateral lender to the island.

"I also conveyed Japan's intention to further support Sri Lanka's development by swiftly resuming existing yen loan projects (after a debt restructuring deal)," she said.