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WB reaffirms continued support for SL to navigate economic challenges

World Bank Vice President for South Asia, Martin Raiser recently concluded his four-day visit to Sri Lanka reaffirming the World Bank’s continued support to help the country navigate economic challenges, implement critical reforms, and chart a path towards a resilient and inclusive recovery.

During his visit, Raiser met with Sri Lanka’s President and Minister of Finance Ranil Wickremesinghe, Secretary of the Treasury, Governor of the Central Bank, senior government officials, development partners, and key opinion leaders including members of Sri Lanka’s political opposition, thinks tanks, civil society organizations and academia, a World Bank statement said.

“The people of Sri Lanka have been deeply affected by the macro and debt crisis affecting the country. The depth of the crisis has made it clear that Sri Lanka needs a new development model, but this requires greater confidence in and understanding of the government’s reforms”, said Martin Raiser.

He added “Improved communication and consistent implementation of the reform and adjustment program is urgent, as is faster international debt relief and financial support to ensure people don’t lose patience and the opportunity for a change isn’t lost.”

During the visit, Raiser discussed progress on reforms to transform economic governance in Sri Lanka through strengthened institutional and fiscal oversight and better debt management.

He also stressed that greater transparency, improved governance, support for job creation, as well as better targeted protection for the poorest are critical to garner and sustain public support for reforms.

Raiser also visited North Central and Northwestern Provinces to observe first-hand World Bank-funded projects in the health and agriculture sectors, and to engage with a broad range of stakeholders on Sri Lanka’s development needs.

The World Bank was among the first to respond to Sri Lanka’s economic crisis. The Bank’s emergency response repurposed $325 million from existing projects to protect the poor and vulnerable from the worst impacts of the crisis.

In December, the Bank approved Sri Lanka’s request to access concessional financing from the International Development Association (IDA).

This type of financing, offered at low interest rates, will enable the country to implement its government-led reform program to stabilize the economy and protect the livelihoods of millions of people facing poverty and hunger.

The World Bank Group has started preparing a new Country Partnership Framework for the next four years (2023-2026) with a focus on private sector led job creation, inclusion, preservation and strengthening of human and natural capital, improved governance, and a shift towards a greener growth path

. Representatives from the World Bank have assured that the World Bank will continue to support Sri Lanka’s development reforms program.

They stated that the World Bank will provide technical assistance in the drafting of laws for development policy operations, as well as work to provide additional guidance and support regarding the use of international media and welfare benefits.

Among the areas discussed by the WB team and SL authorities were improving financial supervision and credit management, improving tax administration, sovereign-financial sector linkages and reducing systemic risks; maintaining stability and confidence in the banking sector.

They also focused on the restructuring and divestment, reducing policy uncertainty and increasing competitiveness in the economy, mobilizing private capital and competition in the broadband market, strengthening the social security institution, delivery system and targeting.

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