5-Feb-2023: Paris Club to provide financial assurances to the International Monetary Fund (IMF) on Sri Lanka’s debt.
The Paris Club, an informal group of creditor nations, will provide financial assurances to the International Monetary Fund (IMF) on Sri Lanka’s debt.
The Paris Club
- An informal group of creditor nations
- A forum where official creditors meet to solve payment difficulties faced by debtor countries
- Objective is to find sustainable debt-relief solutions for countries that are unable to repay their bilateral loans
Members
- Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Netherlands, Norway, Russia, South Korea, Spain, Sweden, Switzerland, the United Kingdom and the United States
- All 22 are members of the Organisation for Economic Co-operation and Development (OECD)
Involved in Debt Agreements
- Reached 478 agreements with 102 different debtor countries
- Debt treated in the framework of Paris Club agreements amounts to USD 614 billion since 1956
Recent Developments
- Dominated bilateral lending in the last century, but their importance has receded over the last two decades
- China emerged as the world's biggest bilateral lender
- In Sri Lanka's case, India, China, and Japan are the largest bilateral creditors
- Sri Lanka's debt to China is 52% of its bilateral debt, 19.5% to Japan, and 12% to India
India's Position on Bilateral Negotiation with Sri Lanka
- Launched its own bilateral negotiations with Sri Lanka in January 2023.
- Provided the necessary financial assurances to the IMF.
- Reassertion of India's belief in the principle of "neighborhood first" and not leaving a partner to fend for themselves.