World Bank has no new financing plans for crisis-hit Sri Lanka

FILE PHOTO: People stand next to their empty cylinders as they wait in a queue to buy domestic cooking gas, amid the country’s economic crisis, in Colombo, Sri Lanka, on  July 23, 2022. REUTERS/Adnan Abidi

The World Bank does not plan to offer new financing to Sri Lanka, which is battling its worst economic crisis in decades until the Indian Ocean nation has an adequate macroeconomic policy framework in place, the lender said Thursday.

In a statement, the World Bank said Sri Lanka needed to adopt structural reforms that focus on economic stabilization and tackle the root causes of its crisis, which has starved it of foreign exchange and led to shortages of food, fuel, and medicines.

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

The bank is repurposing resources under existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertilizer, meals for children, and cash for vulnerable households, it added.

The bank said it was working closely to establish control and fiduciary oversight to ensure fair distribution.

Former president Gotabaya Rajapaksa said in June that the World Bank would restructure 17 existing projects and more assistance would follow after negotiations with the International Monetary Fund on a financing loan.

Sri Lanka has been in a state of emergency since July 13 after popular protests forced Rajapaksa to flee the nation, first to the Maldives and then Singapore.

READ: Sri Lankans won’t welcome ex-president Gotabaya Rajapaksa if he returns

He has been replaced as president by Ranil Wickremesinghe, who was the prime minister.

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