report in Daily FT, Dec 20, 2022
According to Bloomberg, Sri Lanka is considering a “Favoured Creditor Clause” to fast track external debt negotiations. Sri Lanka may use a special clause to expedite its debt-restructuring negotiations – prolonged talks risk delaying a crucial bailout from #IMF.
The ‘Most Favoured Creditor (MFC)’ could help with doubts among other creditors that China (holds 52% of Sri Lanka’s bilateral debt) could be offered better terms.
Such a clause would ensure the same terms are extended to all creditors even if an agreement with them has been sealed before a deal is reached with China.
This clause is intended to deflate any expectation on the part of other lenders that by delaying engagement in the process they may be able to secure a better deal down the road.
If Sri Lanka introduces this clause, it may be the first time that it is used in a debt-restructuring involving China.
https://www.ft.lk/front-page/Sri-Lanka-weighs-Favoured-Creditor-Clause-to-speed-up-debt-fix/44-743281
FAO: 6.2 mn Lankans facing acute food insecurity
report in The Island, Dec 20,2022
A record 6.2 million Sri Lankans are facing moderate acute food insecurity, the Food and Agriculture Organization (FAO) said on Monday in its response overview from June to December 2022.
FAO said that four in every 10 households experienced a reduction in their incomes, and that one in two households are currently relying on negative coping mechanisms to cope with the lack of food or money to buy it.
FAO said that 40 percent of Sri Lankans depend on agriculture for their livelihoods and that paddy production costs have increased by more than 100 percent in 2022.
FAO has said the supply of food in local markets is shrinking and that the window of opportunity to support Sri Lankan farmers and their communities is narrowly time bound.
The FAO said that it has mobilised 51.17 million U.S. dollars for its emergency and resilience interventions to be implemented during 2022/23.
The food inflation in the country is soaring, reaching 90 percent in July 2022, it said.
https://island.lk/fao-6-2-mn-lankans-facing-acute-food-insecurity/
