Top economists call for halt to Sri Lanka debt repayments after Cyclone Ditwah
Group of 120 experts including Joseph Stiglitz urge fresh debt restructuring plan given scale of destruction
TL;DR
- Over 120 global economists, including Joseph Stiglitz, Jayati Ghosh, Thomas Piketty, Martín Guzmán, and Kate Raworth, have called for Sri Lanka to suspend its debt payments.
- Cyclone Ditwah caused over 600 deaths and destroyed hundreds of thousands of homes, leading the Sri Lankan president to call it the largest natural disaster in the country's history.
- Before the cyclone, Sri Lanka's annual debt repayments were expected to be 25% of government revenues.
- The economists advocate for a new debt restructuring to restore sustainability given the environmental damage and potential for further borrowing.
- Research indicates that private sector creditors could still profit significantly from lending to Sri Lanka post-restructuring.
- Sri Lanka has requested a $200m emergency loan from the IMF for immediate crisis relief.
- Scientists suggest global heating likely exacerbated the severity of the flooding in Sri Lanka.
- The UK government has provided £1m in humanitarian support to Sri Lanka.