Panel Discussion: Debt Restructuring-cum Economic Adjustment Deals in Zambia and Sri-Lanka Friday March 17, 2023 | 9:00 AM ET | 2:00 PM Paris | 3:00 PM Lusaka | 6:30 PM Colombo

Chair
Dani Rodrik, Harvard University & International Economic Association (IEA)

Speakers
Deborah Brautigam, Johns Hopkins University
Sharmini Coorey, Sri Lanka Presidential Advisory Group
Jayati Ghosh, University of Massachusetts Amherst
Grieve Chelwa, The New School

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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?

Background pieces:

A framework to evaluate economic adjustment- cum-debt restructuring packages by Reza Baqir, Ishac Diwan, Dani Rodrik

ZAMBIA

IMF report on Zambia

An analysis of the Zambia deal

A critique

China in Zambia

SRI LANKA

Sri Lanka debt crisis

China in Sri Lanka