World Bank has no new financing plans for crisis-hit Sri Lanka; deep structural reforms needed

The World Bank has no plan to offer new financing to Sri Lanka until an adequate macroeconomic policy framework is in place in the island country, which is facing its worst crisis.

The international financial institution in a statement said deep structural reforms are needed.

Reforms must focus on economic stabilization, and also on addressing the root structural causes that created this crisis to ensure that Sri Lanka's future recovery and development is resilient and inclusive.

According to Reuters, the World Bank said that Sri Lanka needed to adopt structural reforms that focus on economic stabilisation and tackle the root causes of its crisis, which has starved it of foreign exchange and led to shortages of food, fuel and medicines.

"The World Bank Group is deeply concerned about the dire economic situation and its impact on the people of Sri Lanka," it said.

In addition, other ongoing projects continue to support basic services, the delivery of medicine and medical supplies, school meals and tuition waivers.

"We are working closely with implementing agencies to establish robust controls and fiduciary oversight to ensure these resources reach the poorest and most vulnerable. We will continue to monitor this closely," it added.

The bank said it was working closely to establish control and fiduciary oversight to ensure fair distribution.

For the record, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans. The United Nations warned that 5.7 million people "require immediate humanitarian assistance."

With many Sri Lankans experiencing extreme shortages of essentials including food and fuel, peaceful protests began in March. The protests led then-Prime Minister Mahinda Rajapaksa to resign on 9 May, and his brother, President Gotabaya Rajapaksa, to flee the country on 13 July and resign the following day.

Ranil Wickremesinghe became acting President and parliament elected him as the new president on 20 July with the support of the Rajapaksas' political party, the Sri Lanka Podujana Peramuna.

With inputs from agencies

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