World Bank ‘does not plan to offer new financing to Lanka’
The World Bank does not plan to offer new financing to Sri Lanka, which is battling its worst economic crisis in decades, until the Indian Ocean nation has an adequate macroeconomic policy framework in place, the lender said in a Reuters report.
In a statement, the World Bank said 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.
The bank is repurposing resources under existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertiliser, meals for children and cash for vulnerable households, it added.
The bank said it was working closely to establish control and fiduciary oversight to ensure fair distribution. (https://bit.ly/3zGbFfz)
Former president Gotabaya Rajapaksa said in June that the World Bank would restructure 17 existing projects and more assistance would follow after negotiations with the International Monetary Fund on a financing loan.
The statement said:
The World Bank Group is deeply concerned about the dire economic situation and its impact on the people of Sri Lanka.
To help alleviate severe shortages of essential items such as medicines, cooking gas, fertilizer, meals for school children and cash transfers for poor and vulnerable households, we are repurposing resources under existing loans in our portfolio. To date, about US$160 million of these funds has been disbursed to meet urgent needs. 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. We are also coordinating closely with other development partners to maximize the impact of our support for the people of Sri Lanka.
Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka. This requires deep structural reforms that 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.