The World Bank Board last week approved a $100 million credit from the International Development Association (IDA) to support the Government of Sri Lanka’s economic reform programme.
Sri Lanka has been making steady progress on economic reforms, with the government aiming to create one million new jobs through a reform package focused on improving the country’s competitiveness, transparency and macroeconomic stability. A recent World Bank study, the Systematic Country Diagnostic, highlighted the need for Sri Lanka to move from a largely inward looking and public sector driven economy to one that is capable of unleashing the potential of the private sector – leading to post-conflict economic growth and creating more and better jobs for Sri Lankans.
The Sri Lanka Competitiveness, Transparency and Fiscal Sustainability Development Policy Financing (DPF), which is only the second DPF to Sri Lanka in a decade, aims to support the government’s reform agenda by reducing obstacles to private sector competitiveness, establishing transparent and well managed public institutions and improving fiscal sustainability.
“The breadth and depth of the actions implemented signal the comprehensive approach and commitment of the Government to tackle difficult reforms aimed at making growth sustainable and creating jobs,” said Françoise Clottes, outgoing World Bank Country Director for Sri Lanka and the Maldives. “The specific actions in this DPF operation will help improve fiscal sustainability and create the fiscal space for delivery of public services, social spending and capital investment, which are integral to the country’s competitiveness”
The Ministry of National Policies and Economic Affairs will be responsible for overall implementation and coordination of the proposed operation. Other agencies involved include the Ministry of Development Strategies and International Trade, the Ministry of Finance, the Ministry of Parliamentary Reforms and Mass Media, the Auditor General’s Department, the Board of Investment and the Central Bank of Sri Lanka.
Meanwhile, the World Bank Group’s Board of Directors last week endorsed a new four-year strategy aimed at achieving greater prosperity for Sri Lanka and its people. The strategy emphasizes greater macro-economic stability, improving Sri Lanka’s global competitiveness, investing in under-served people and areas, and promoting green growth.
The World Bank Group’s Country Partnership Framework (CPF) for Sri Lanka for the period ending June 2020, reflects the development vision of the government.