Session 2: Discussing debt restructuring-cum economic adjustment deals in Zambia and Sri-Lanka
Friday 17th March
Time: 9:00 AM ET / 2:00 PM Paris / 3:00 PM Lusaka / 6:30 PM Colombo
WEBINAR IN PARTNERSHIP WITH:
Zambia is on the cusp of restructuring its external debt and has signed off on an IMF program, while in Sri Lanka, negotiations are ongoing. The goal of this session is to evaluate these arrangements from the debtor’s perspective. The focus will be on the shape of the debt restructuring deals, as well as the adjustment programs they support. By doing so, the discussion should bring together some of the hot issues in the field of development finance that tend to be treated separately: the nature of adjustment programs, IFIs’ loans to finance reforms, the possibility of a new growth path, and the type of debt workout needed to support such arrangements.
We are interested in three aspects:
- Adjustment program: does the package foster a new growth path? Is the program horizon long enough? is conditionality adapted to this goal?
- Debt restructuring: is the haircut proposed fair to all parties? Are the growth assumptions in the DSA realistic? Are there financing assurances by IFIs to finance this in the future? What are other sources of finance, domestic and external?
- Process: What has slowed down the negotiation process? What are the lessons for improving the Common Framework rules? How to involve China more centrally?
Harvard University & International Economic Association (IEA)
Ford Foundation Professor of International Political Economy at Harvard's John F. Kennedy School of Government & President of the International Economic Association
Johns Hopkins University
Bernard L. Schwartz Professor of International Political Economy Emerita and Director of the China Africa Research Initiative (CARI)
The New School
Director of Research at the Institute on Race, Power & Political Economy
Sri Lanka's Presidential Advisory Group on Multilateral Engagement and Debt Sustainability
Former senior IMF official
University of Massachusetts Amherst
Professor of Economics
- A framework to evaluate economic adjustment- cum-debt restructuring packages by Reza Baqir, Ishac Diwan, Dani Rodrik
- Grieve Chelwa: "IMF Deal: Cry, My Beloved Zambia"
- Deborah Brautigam: How Zambia and China Co-Created a Debt "Tragedy of the Commons", SAIS-CARI Working Paper, September 2021
- IMF Report on Zambia
- Martin Kessler: The lessons from the Zambian IMF program, Finance for Development Lab blog
- Shanta Devarajan and Homi Kharas: Is the Sri Lankan debt crisis a harbinger?, Foreign Affairs
- Umesh Moramudali and Thilina Panduwawala: Evolution of Chinese Lending to Sri Lanka Since the mid-2000s - Separating Myth from Reality, SAIS-CARI Briefing Paper, November 2022