Home / Business and Economy / Sri Lanka Debt Crisis: Cyclone Devastation Demands Debt Freeze
Sri Lanka Debt Crisis: Cyclone Devastation Demands Debt Freeze
21 Dec
Summary
- 120 global experts, including Joseph Stiglitz, called for debt payment suspension.
- Cyclone Ditwah killed over 600 people and destroyed hundreds of thousands of homes.
- Experts advocate for a new debt restructuring due to extensive environmental damage.
A consortium of 120 international economists, including Nobel laureate Joseph Stiglitz, has called for an immediate suspension of Sri Lanka's external sovereign debt payments. This plea comes in the wake of Cyclone Ditwah, a catastrophic natural disaster that resulted in over 600 fatalities and widespread destruction of hundreds of thousands of homes across the island. The experts argue that the cyclone's extensive damage to infrastructure and livelihoods has created a severe economic shock.
The group's statement highlights that the existing debt restructuring, finalized last year, is insufficient to manage the repercussions of the disaster. Prior to the cyclone, Sri Lanka was already facing a precarious financial situation, with annual repayments projected to consume 25% of government revenues. The call for a new restructuring aims to restore the nation's debt to a sustainable level, considering the immense environmental and economic challenges.
