‘No to debt restructuring, Yes to rice donation’ – Sri Lanka thanks China for aid donation

In a statement, Sri Lanka’s Prime Minister Mahinda Rajapaksa thanked China for its donation of 2,000 tonnes of rice amidst a disastrous economic crisis that has seen food shortages across the island.

The announcement follows the decision by China to refuse an appeal by Sri Lanka to restructure its debt. Colombo’s debt repayment to Beijing amounted to nearly USD 2 billion in 2021-2022. The appeal for debt restricting was made directly to China’s Foreign minister Wang Yi in December 2021.

A US embassy report criticises the Sri Lankan government’s over-reliance on China noting that “the deeply pro-China Rajapaksa government dug its own grave as it had booted out the Millennium Challenge Corporation (MCC) of the USA with its offer to extend developmental assistance grant to Colombo as the Board of Directors of MCC discontinued its USD 480 million contract with Sri Lanka in December 2020"due to lack of partner country engagement.

Announcing the donation, the Chinese Embassy in Sri Lanka noted that they were meeting a request by the Sri Lankan government for 2,000 tonnes of rice as emergency food aid, worth an estimated 2.5 million US dollars.

The economic crisis has devastated Sri Lanka leading to severe food shortages and sharp prices increases in basic commodities. After significant reluctance, Sri Lanka has also turned to the IMF for support but there are concerns that the IMF may set strict conditions on their aid.

Read the full press release by the Chinese embassy below.

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