"A group of the world's top economists including the Nobel prize winner Joseph Stiglitz have called for Sri Lanka's debt payments to be suspended as it tackles the devastation caused by Cyclone Ditwah. More than 600 people were killed and hundreds of thousands of homes destroyed across the island, in what Sri Lanka's president, Anura Kumara Dissanayake, called the largest and most challenging natural disaster in our history."
"The country's $9bn (6.8bn) national debt was restructured last year, after lengthy negotiations with creditors after the government defaulted on repayments in 2022. But development campaigners warned at the time that the burden on Sri Lankan taxpayers remained unsustainable. Before the cyclone hit, annual repayments were expected to total 25% of government revenues a high level by international and historical standards."
A coalition of 120 global economists, including Joseph Stiglitz, Jayati Ghosh, Thomas Piketty, Martin Guzman, and Kate Raworth, has called for suspension and fresh restructuring of Sri Lanka's external sovereign debt following Cyclone Ditwah. The cyclone, plus flooding and landslides, killed more than 600 people and destroyed hundreds of thousands of homes, inflicting severe damage to infrastructure, livelihoods, and key economic sectors. Sri Lanka's $9bn national debt was restructured last year after a 2022 default, but annual repayments were still projected at about 25% of government revenues, an unsustainable burden. The group warns the environmental emergency will absorb and likely exceed existing fiscal space, pressuring further external lending and IMF support.
Read at www.theguardian.com
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