World Bank suspends financing to Sri Lanka

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

The World Bank said the macroeconomic policy framework 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.

The World Bank Group said it is deeply concerned about the dire economic situation and its impact on the people of 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. 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 World Bank said.

The World Bank said that it is working closely with implementing agencies to establish robust controls and fiduciary oversight to ensure these resources reach the poorest and most vulnerable.

The Bank said it will continue to monitor this closely and is also coordinating closely with other development partners to maximize the impact of their support for the people of Sri Lanka. (Colombo Gazette)