By: Staff Writer
December 05, Colombo (LNW): The World Bank has committed to resuming and continuing stalled development projects in Sri Lanka following the inauguration of President Anura Kumara Dissanayake and the formation of a new NPP/JVP government.
This assurance was provided by World Bank Executive Director Parameswaran Iyer during a meeting with the President in Colombo on December 4.
President Dissanayake outlined his administration’s key priorities, focusing on advancing agriculture, fisheries, tourism, education, and healthcare sectors to drive national development and improve livelihoods. He also highlighted the “Clean Sri Lanka” initiative, aimed at environmental sustainability.
Mr. Iyer affirmed the World Bank’s support for ongoing and future projects and proposed the formation of an advisory group to align with the government’s development goals. He also commended the Clean Sri Lanka initiative, reflecting the global lender’s endorsement of the government’s environmental and economic reform plans.
A significant focus of the discussions was on tackling rural poverty and digitalizing the economy, including the introduction of a Digital Identity Card system. Additionally, attention was drawn to longstanding issues in the North and East, such as land and housing challenges faced by the plantation community.
This meeting follows a recent virtual discussion between President Dissanayake and World Bank Group President Ajay Banga. In that conversation, the President emphasized raising government revenue through sectors like tourism and energy, supported by international investment.
Banga reiterated the World Bank’s commitment to fostering job creation and addressing critical developmental challenges.
Sri Lanka has also secured a $200 million budget support loan, which aligns with the government’s broader fiscal reforms aimed at export competitiveness and reducing para tariffs.
This follows the World Bank’s previous $500 million reform-backed loan in parallel with the IMF stabilization program, which began in 2023.
The IMF and World Bank had initially earmarked policy loans worth $3.7 billion for Sri Lanka, to be disbursed between 2023 and 2027, supplementing short-term IMF loans.
The country defaulted on its foreign debt in 2022 after years of macroeconomic mismanagement, including inflation-driven interest rate cuts, leading to repeated currency crises. These crises, occurring in 2012, 2015/16, 2018, and 2020/22, eroded foreign reserves, escalated external debt, and slowed economic growth.
With the new government’s focus on reforms, sustainable development, and fiscal discipline, the World Bank and other multilateral lenders are expected to play a critical role in stabilizing Sri Lanka’s economy and promoting long-term growth.
