The World Bank on Thursday said it does not plan to offer Sri Lanka any new financing amid the ongoing economic crisis, citing inadequate macroeconomic policy framework. The international financing institution said that it was ‘deeply concerned’ about the impact of the crippling crisis on the people of Sri Lanka.
In a statement, the world finance body further said the island nation of 22 million needed to adopt structural reforms that focus on economic stabilisation and tackle the root causes of its situation, which has starved the government of foreign exchange and led to shortages of food, fuel and medicines for people.
“World Bank Group is deeply concerned about the dire economic situation and its impact on the people of 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 international lender said.
The bank noted that it was repurposing resources under existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertiliser, meals for children and cash for vulnerable households.
It was working closely to establish control and fiduciary oversight to ensure fair distribution.
Sri Lanka has been witnessing massive protests for months as former president Gotabaya Rajapaksa-led government failed to resolve the financial crunch it was facing.
The country’s new president – Ranil Wickremesinghe, who was the prime minister – has imposed a state of emergency since July 13 after the protests forced Rajapaksa to flee the nation, first to the Maldives and then Singapore. The emergency has now been extended.
In June, Rajapaksa said the World Bank would restructure 17 existing projects and more assistance would follow after negotiations with the International Monetary Fund on a financing loan.