World Bank refuses new financial aid to debt-ridden Sri Lanka

International

oi-Prakash KL

Colombo, July 29: The World Bank Group on Friday expressed its deep concern about the dire economic situation in Sri Lanka while refusing to offer new financing to the island nation.

It said that until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka.

“To help alleviate severe shortages of essential items such as medicines, cooking gas, fertilizer, meals for school children and cash transfers for poor and vulnerable households, we are repurposing resources under existing loans in our portfolio,” the statement stated.

To date, about US$ 160 million of these funds has been disbursed to meet urgent needs. In addition, other ongoing projects continue to support basic services, the delivery of medicine and medical supplies, school meals and tuition waivers, the statement claimed.

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“We are working closely with implementing agencies to establish robust controls and fiduciary oversight to ensure these resources reach the poorest and most vulnerable. We will continue to monitor this closely. We are also coordinating closely with other development partners to maximize the impact of our support for the people of Sri Lanka,” it said.

This requires deep structural reforms that focus on economic stabilization, and also on addressing the root structural causes that created this crisis to ensure that Sri Lanka’s future recovery and development is resilient and inclusive, said the World Bank.

Sri Lanka, a country of 22 million people, is under the grip of an unprecedented economic turmoil, the worst in seven decades, crippled by an acute shortage of foreign exchange that has left it struggling to pay for essential imports of fuel, and other essentials.