The World Bank has agreed to extend the aid for the agriculture sector modernization project implemented to introduce new technology to the agriculture sector in Sri Lanka for another 18 months.

The World Bank delegation that visited Sri Lanka recently led by John Kayser, agro-economist Mrs. Karishma Wash and senior operations officer Asela Dissanayake, discussed the project with the Minister of Agriculture, Mahinda Amaraweera.

The Minister requested the World Bank delegation to continue on with this project as this project has significantly contributed to the agricultural sector via modernization project.

Accordingly, the World Bank delegation has agreed to provide an amount of US$ 30 million to maintain this project for another 18 months from May this year.

Under this, agricultural sector modernization model villages will be started in all the 25 districts targeting different types of crops.

Also, aiming at exports, a sour banana model village in Jaffna, and two Cavendish banana projects in Batticaloa and Sevanagala areas will be started. The Agriculture Sector Modernization Project has already planned to start these activities in the month of May.

Like the Rajanganaya Sour Banana project, another cultivation project has been planned targeting Embilipitiya and Hambantota areas.

The minister emphasized in this discussion that while introducing new technology to agriculture, the project is already very successful in obtaining more yield from minimum land area, planting crops according to international standards, producing according to world market standards and familiarizing farmers with new technology.

Mr. John Kayser, the team leader of the World Bank delegation, expressing his views emphasized that he will give his maximum support to increase agricultural production by using modern technology instead of traditional agriculture in Sri Lanka.

Sri Lanka counts down to IMF bailout seen as ‘just the beginning’

Sri Lanka is counting the minutes to Monday, when the International Monetary Fund’s executive board is expected to approve a $2.9 billion bailout for the bankrupt island nation.

For the first time in months, many are hopeful that the IMF’s decision will kick-start the country’s recovery from its worst economic crisis since independence from Britain in 1948.

Faced with deepening poverty under high inflation, scarce foreign reserves and dire shortages of essentials, Sri Lanka is on the cusp of the bailout after China offered additional financing “assurances” required by the fund, following months of tough negotiations.

Beijing’s apparent hesitance to extend support drew comparisons to a more obliging India. But Sri Lanka’s ambassador to China, Palitha Kohona, strongly defended the country’s key bilateral lender, telling Nikkei Asia.

The Chinese bureaucracy works according to its own rhythm.” Experts stress just how crucial the final IMF approval is for stabilizing Sri Lanka’s economy, after the turmoil that brought down President Gotabaya Rajapaksa last year.

Hot on the heels of the worst ever contraction of 7.8% in 2022, the economy’s struggle is persisting and recovery remains most challenging this year as well judging by the latest update from the Purchasing Managers Indices.

The February PMIs for both manufacturing and services activities reflect further contraction reinforcing the view that the confidence factor is far from being restored despite multiple Government efforts to stabilize and spur economic growth.

Other analysts opined that the macro and policy environment in the first two months of the New Year weren’t conducive to stimulating the economy.

The Manufacturing PMI recorded an index value of 42.3 in February its compiler Central Bank (CBSL) said, and added it indicated a continued setback in manufacturing activities on a month-on-month basis.

This setback was driven by subdued performance observed in new orders, production, employment and stock of purchases, CBSL said.

The services sector PMI, CBSL aid, dropped to an index value of 48.7 in February indicating a deterioration across the services sector. This was driven by the declines observed in new businesses, business activities, employment and backlogs of work.

New businesses declined in February compared to January, particularly with the decreases observed in transportation, insurance and postal and courier sub-sectors

The data showed some improvement in Sri Lanka’s fiscal position with inflation moderating to about 50 percent in February, down from a record high of 69.8 percent in September.

President Ranil Wickremesinghe has raised taxes and ended generous subsidies on fuel and electricity to boost government revenue after his predecessor defaulted on Sri Lanka’s $46bn foreign debt last year.

The reforms are a precondition of a $2.9bn rescue package from the IMF, which Sri Lanka expects to finalize next week.

But the tax and price hikes have been roundly unpopular, triggering protests and industrial stoppages around the country.

Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of an IMF review of a bailout package in six months, its central bank governor said last week.

Wickremesinghe has said Sri Lanka can expect to remain bankrupt until at least 2026 and insisted his government has no option but to implement the reforms demanded by the IMF.

The census and statistics department said the agriculture sector shrank 4.6 percent last year, while industries contracted 16 percent, and services dropped 2 percent from a year earlier.