Is Sri Lanka the only country in recent history to have its debt restructured within a two-year period after announcing default status?

In a recent address to the nation, Sri Lankan President Ranil Wickremesinghe hailed the country’s rapid progress in debt restructuring as a truly exceptional feat. He underscored that the transformation from a 'bankrupt' state to successful debt restructuring within two years was a remarkable victory that stands out in recent history. The president's address to the nation with these points can be seen here.

To put this claim into perspective, it's worth examining the experiences of other countries that have undergone similar debt restructuring processes.

Belize

Belize faced severe economic challenges exacerbated by the COVID-19 pandemic, leading to a default on its "superbond" in 2020. The restructuring process was completed in 2021, roughly a year after default. The agreement included a substantial reduction in the principal amount owed and innovative commitments to marine conservation facilitated by organisations like The Nature Conservancy (IMF) (The Nature Conservancy) . This was not the first time Belize had become a default state. There were a few other times earlier as well, more details about this can be read here.

Mongolia

Mongolia's debt restructuring in 2017 followed economic difficulties that necessitated international assistance. The process involved negotiations with the International Monetary Fund (IMF) and other creditors, culminating in a deal within several months. This restructuring was part of a broader economic recovery plan, which included significant reforms and financial support from international bodies (IMF).More details can be read here

Argentina

Argentina's financial history is marked by multiple defaults and restructurings. The most recent default in 2020 led to intense negotiations with creditors, resulting in a restructuring agreement within the same year. However, the process was intricate and prolonged due to the substantial scale of Argentina's debt and its complex economic context (IMF).In 2022, Argentina restructured the debt again, and more details can be read here In the Argentinian context, debt restructuring happens at a serial level and country has been in a severe crisis for a long time.

Ecuador

Ecuador also defaulted in 2020 but managed to negotiate new terms with bondholders within a few months. The restructuring aimed to ensure debt sustainability by extending maturities and reducing interest rates. This swift resolution was facilitated by Ecuador’s proactive engagement with creditors and timely negotiations (IMF).More details can be read here

Chad

Chad's debt restructuring under the G20 Common Framework began in early 2021 and concluded about a year later. The process involved intricate negotiations with both official creditors and private bondholders to address liquidity issues intensified by the global pandemic (IMF).More details about it can be read here. Above details related to 2020 debt default. Before that there were another defaults in Chad also .

Barbados

Barbados initiated debt restructuring in 2018 following a default. The process was completed by late 2019 and involved substantial debt relief measures, supported by an IMF program. The relatively quick resolution was due to effective negotiations and a strong commitment to fiscal reforms (IMF). More details about it can be read here

Suriname

Suriname defaulted on its debt in 2020, and the restructuring process has been ongoing, with various proposals and negotiations aimed at achieving a sustainable debt profile. The complexity of the situation and the involvement of multiple creditors have prolonged the process (IMF).More details about it can be read here

Zambia

Zambia defaulted on its sovereign debt in 2020 and embarked on restructuring negotiations under the G20 Common Framework. The process has been extended due to the intricate nature of the negotiations and the diverse groups of creditors involved (IMF).The debt restructuring still ongoing and more details can be read here.

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In a Nutshell..

Sri Lanka’s achievement in restructuring its debt within two years stands out when compared to the experiences of other countries. While nations like Belize and Ecuador managed to restructure their debt within a year, others like Argentina and Zambia faced more prolonged processes. Each country’s restructuring timeline is influenced by unique factors, including the scale of debt, economic conditions, and the nature of negotiations with creditors.

Sri Lanka’s rapid progress in debt restructuring is commendable, particularly given the complexities involved in such processes. However, it’s essential to recognise that while some countries have achieved swift resolutions, others have faced extended and intricate negotiations, underscoring the diverse challenges in managing sovereign debt crises.