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Former Lankan President Rajapaksa leaves for China

China is Sri Lanka's largest bilateral lender owning 52 per cent of the $40 billion external debt when Sri Lanka announced its sovereign default in 2022.
Last Updated : 27 June 2024, 11:15 IST

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Colombo: Former Sri Lankan president Mahinda Rajapaksa on Thursday left on an official visit to Beijing where he will meet Premier Li Qiang and Foreign Minister Wang Yi to discuss the island nation's debt restructuring agreement with China.

China is Sri Lanka's largest bilateral lender owning 52 per cent of the $40 billion external debt when Sri Lanka announced its sovereign default in 2022.

President Ranil Wickremesinghe on Wednesday announced that debt restructuring agreements were finalised with bilateral lenders, including India and China, in Paris, describing the development as a “significant milestone” that will bolster international trust in the cash-strapped island nation.

The debt restructuring deal entails allowing time till 2043 to repay $4.2 billion of Chinese loans – the bulk of which was drawn during the Rajapaksa presidency 2005-15.

On Thursday, Daily Mirror quoted sources to report that 78-year-old patriarch of the Rajapaksa dynasty's visit was on an invitation by Foreign Minister Wang to attend the commemorative events in Beijing marking the 70th anniversary of the Five Principles of Peaceful Coexistence.

The event would be attended by Chinese President Xi Jinping and other leading Communist Party of China (CPC) members.

China will hold the Conference Marking the 70th Anniversary of the Five Principles of Peaceful Coexistence Friday in Beijing, a foreign ministry spokesperson said on Tuesday.

“On the sidelines of the events, Rajapaksa will hold discussions with Premier Li and Minister Yi on areas of mutual interest and also development projects which will benefit Sri Lanka,” the news portal said.

Rajapaksa will also discuss Sri Lanka's debt restructuring agreement and express his gratitude for the assistance given by China and the Exim Bank of China, it said.

Rajapaksa had steered a massive infrastructure drive by building a port and an airport and a southern highway with Chinese commercial loans. Sri Lanka was facing criticism of falling under a Chinese debt trap under Rajapaksa's presidency.

Then, in mid-April of 2022, Sri Lanka declared its first ever sovereign default since gaining independence from Britain in 1948. The International Monetary Fund (IMF) had made external debt restructuring conditional to the USD 2.9 billion bailout package of which the third tranche was released last week.

Rajapaksa, who will return from China on July 1, becoming internationally active once again after a brief lull is also being seen with interest in the light of looming presidential elections to be held in the last quarter of this year.

External Affairs Minister S Jaishnakar had also called on Rajapaksa last week in Colombo.

Rajapaska’s Sri Lanka People's Front (SLPP, known locally by its popular Sinhalese name Sri Lanka Podujana Peramuna), is in disarray with several breakaways since his younger brother Gotabaya was ousted after the 2022 popular uprising over his inability to tackle the economic crisis.

The party has yet to endorse the candidacy of the incumbent Ranil Wickremesinghe.

The decision on naming the party’s presidential candidate has been left in the hands of Mahinda Rajapaksa by the SLPP as he undertook the Chinese visit.

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Published 27 June 2024, 11:15 IST

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