Friday, April 12

World Bank refuses new funding for bankrupt Sri Lanka

Online Desk :

The World Bank said Friday it would not

offer new funding to Sri Lanka unless the bankrupt island nation carried out
“deep structural reforms” to stabilise its crashing economy.

Sri Lanka has suffered an unprecedented downturn with its 22 million people
enduring months of food and fuel shortages, rolling blackouts and rampant

The South Asian nation defaulted on its $51-billion foreign debt in April and
huge protests earlier this month forced then president Gotabaya Rajapaksa to
flee the country and resign.

The World Bank said it was concerned about the impact of the crisis on Sri
Lanka’s people but was not ready to give funds until the government had
bedded down necessary reforms.

“Until an adequate macroeconomic policy framework is in place, the World Bank
does not plan to offer new financing to Sri Lanka,” the lender said in a

“This requires deep structural reforms that focus on economic stabilisation,
and also on addressing the root structural causes that created this crisis.”

The World Bank said it had already diverted $160 million from existing loans
to finance urgently needed medicines, cooking gas and school meals.

Sri Lanka is currently in bailout talks with the International Monetary Fund
but officials say the process could take months.

The island nation has run out of foreign exchange to finance even the most
essential imports, and chronic shortages have inflamed public anger.

Motorists stay in long queues for days to get rationed petrol and government
officials have been told to work from home to reduce commuting and save fuel.

The UN World Food Programme estimates the crisis has forced five out of every
six Sri Lankan families to buy lower-quality food, eat less or in some cases
skip meals altogether.

The crisis came to a head on July 9, when tens of thousands of protesters
stormed Rajapaksa’s residence, forcing the president to flee to Singapore and

His successor, Ranil Wickremesinghe, has declared a state of emergency and
vowed a tough line against “trouble-makers”, with several activists who
helped lead the mass demonstrations arrested this week.

Info : AFP

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