By: Staff Writer
Colombo (LNW): The Asian Development Bank pledged to continue engagement with Sri Lanka with renewed vigour in a variety of areas.
Foreign Minister Ali Sabry met with the President of Asian Development Bank, Masatsugu Asakawa in Seoul, Republic of Korea during the 56th Annual Meeting of the ADB.
The Minister expressed Sri Lanka’s gratitude for the excellent partnership and cooperation extended by the Asian Development Bank during a challenging period for Sri Lanka and for supporting the country’s recovery process.
Whilst conveying the best wishes of President Ranil Wickremesinghe, Minister Sabry further sought technical support and financial assistance from the ADB in the spheres of digitalisation, agriculture, renewable energy, and financial sector stability.
The ADB President expressed his appreciation for the encouraging work Sri Lanka has done so far to avert a greater crisis and for laying a strong foundation for the country’s recovery.
The ADB President pledged to continue engagement with Sri Lanka with renewed vigour in a variety of areas.
Sri Lanka is currently facing a severe economic crisis, which has brought upon unprecedented hardships on the population, especially the poor and vulnerable including women and children.
The economic fallout from the balance of payment and debt crises has resulted in shortages of essential items such as fuel, food, fertilizer, cooking gas and medicines.
To support the country during difficult times, ADB repurposed funds from existing projects and is helping the import of essential items (medicines, chemical for water treatment, and fertilizer), financing support for small and medium-sized enterprises, and livelihood development in the agriculture sector.
ADB also approved an emergency assistance loan of $200 million, in addition to administering a $3 million grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR), to improve food security and livelihoods of the poor and vulnerable, especially women and children.
Working together with its partner banks, ADB’s Trade and Supply Chain Finance Program is also supporting import of essential items in the country.
ADB is working closely with other development partners, including the Asian Infrastructure Investment Bank, the World Bank, and the United Nations, as it responds to the country’s needs in the time of crisis
As a key long-term partner, the ADB stands ready to provide further support,” the bank’s president, Masatsugu Asakawa, told reporters at its annual gathering.
Sri Lanka’s economy has contracted and it is suffering from very high inflation severely affecting living standards, Asakawa said. The annual figure exceeded 70% in August.
Asakawa said he was confident Colombo was working to finalize a staff-level agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, by seeking financing assurances from creditors, among other steps.
“After the IMF program is completed, we will consider joining another, by providing additional financial resources to join other rescue packages for Sri Lanka,” said Asakawa, a former Japanese vice finance minister for international affairs.
Asakawa pointed to the risks of abrupt capital outflows from Asia and the prospect of very sharp currency depreciation continuing for some time, as the U.S. central bank tightens monetary policy aggressively.
However, Asia has become more resilient against financial turmoil, with an improved current account balance and sufficient accumulation of foreign reserves, than it was during the Asian financial crisis of the late 1990s, he added.
