The new government in Sri Lanka is to follow the Asian Development Bank’s latest country partnership strategy from 2024 to 2028.
This is expected to complement the ongoing assistance towards the restoration of macroeconomic stability and attainment of environmentally sustainable, long-term growth.
This will pave the way toward unlocking the bank’s US$100 million. Regular ordinary capital resources loan
This strategy was announced last month responding to the country’s economic situation by tailoring ADB assistance to address long-standing macroeconomic imbalances and structural impediments through knowledge solutions, policy advisory support, and priority investments, finance ministry sources said.
This will be done through the ADB program, which is promoting efficient public expenditure management, enhancing revenue collection, and improving the governance and efficiency of SOEs, PPPs, and the Employee Provident Fund.
A core element of the program is the enhanced transparency of public finances to help restore confidence in public institutions.
The project aligns strictly with the government’s reform agenda outlined in the Memorandum of Economic and Financial Policies submitted to the International Monetary Fund, the Climate Prosperity Plan 2022, ADB emphasised.
It is also consistent with the strategic objective of improving Public Financial Management-Governance central to Asian Development Bank’s Country Partnership Strategy for Sri Lanka, 2024–2028.
ADB’s assistance under the new CPS will be concentrated on three strategic objectives: strengthening public financial management and governance, fostering private sector development promoting green growth, and improving access to climate-smart public services, deepening inclusion.
Three thematic priorities will be integrated into the CPS objectives: climate action, disaster resilience, and environmental sustainability; gender equality and social inclusion; and governance, capacity development, and digitalization.
The new CPS will support the country’s efforts to address the key underpinning causes of the economic crisis.
ADB will focus on reforming the public financial management system, strengthening governance, accelerating domestic resource mobilization, improving fiscal and debt sustainability, and measures for improving the performance of state-owned enterprises.
The strategy also recognizes the private sector’s critical role in the country’s recovery and long-term economic growth.
It would support structural reforms aimed at promoting more active private sector participation in the economy under the new strategy and diversifying the economy with emphasis on green and sustainable growth.
ADB will continue supporting financial inclusion and the development of small and medium-sized enterprises, especially those managed by women, as well as providing advisory and capacity-building support to promote trade and investment.
The strategy targets greater access to climate-smart public services while deepening inclusion through strengthening social protection and human capital development, promoting agriculture modernization.
ADB had committed over $3.7 billion in 45 public sector loans and grants in Sri Lanka, and $25.6 million in private sector investments as of December 2023.
