World Bank refuses aid to Sri Lanka unless...

July 29, 2022 15:40

Lanka PM Renil Wickramsinghe

The World Bank does not plan to offer new financing to crisis-hit Sri Lanka until an "adequate" macroeconomic policy framework is in place, the global funding body has said.

The statement by the World Bank was released on Thursday, two days after the International Monetary Fund-- another financial lending body under the United Nations -- asked the cash-strapped Sri Lanka to begin debt restructuring talks with its creditors, including China, before it can hope of getting the bailout package.

The island nation of 22 million is in the midst of an unprecedented economic crisis that has led to severe shortages of fuel and other essentials. Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka, it said in a statement.

This requires deep structural reforms that focus on economic stabilisation, 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 statement added.

The World Bank said it was 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, fertiliser, meals for school children and cash transfers for poor and vulnerable households, we are repurposing resources under existing loans in our portfolio, the statement said.

The World Bank said till now about USD 160 million of funds has been disbursed to meet urgent needs.

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