Now Public: Some Secrets of Sri Lanka's Debt Restructuring

The IMF issued a 'lessons learnt' report in September 2025, giving us extensive information of their observations on Sri Lanka's debt restructuring undertaken after the declaration of the debt standstill in April 2022, including painstaking details of the entire exercise from their point of view, information which was shrouded in secrecy during the process of restructuring.

- BY SANJA DE SILVA JAYATILLEKA

(https://www.imf.org/en/-/media/files/publications/wp/2025/english/wpiea2025175-source-pdf.pdf)

The IMF calls the report Sri Lanka's Sovereign Debt Restructuring: Lessons from Complex Processes. It was prepared by Peter Breuer, Sandesh Dhungana, and Mike Li and was authorized for distribution in September 2025.

It attempts to review "the root causes of Sri Lanka's debt problem, the deliberation of its solution, and the designs, negotiations, and outcomes of the restructuring processes", all of which was not shared with the public, now available from an authoritative source.

While some of it is very technical, there are many things in it that we can understand, some that clarify our misconceptions, and some that come as quite surprising. Most of all, it gives a timeline, which enables us to place the decisions made by our governments including its senior officials, and former and new politicians in power. It enables us to situate the choices that were made in context and to figure out the strengths and weaknesses, promises and deceptions that led to the less-than-optimal restructuring choices, and the need for Parliament to be held to account for their lack of seriousness with which they take their responsibilities for financial oversight.

One of the lessons in the report is that all stakeholders including the public should have been kept informed in a timely manner, even granting that there were things that could not be shared at certain points in time.

It shows how important it is for citizens, especially the media, to question the obfuscatory and ill-prepared explanations from politicians, both inside and outside Parliament, and diversionary and deceitful ones from bureaucrats.

So, What Went Wrong?

In the Introduction to the Report is a summary of what went wrong, in the authors' considered opinion: