In a bid to alleviate the economic challenges faced by Sri Lanka, the Asian Development Bank (ADB) has committed to providing $600 million in budget support on a staggered basis.
This financial assistance comes in conjunction with the International Monetary Fund’s (IMF) ongoing $2.9 billion bailout for the crisis-stricken country.
According to Reuters, Sri Lanka Resident Mission Country Director Takafumi Kadono, the budget support is contingent on the successful implementation of policy actions and reforms outlined in the IMF program.
Kadono emphasized that this financial aid, totaling $500 million to $600 million for 2024, is not without conditions and necessitates Sri Lanka’s commitment to structural economic reforms.
The initial tranche of $200 million is slated for ADB Board support on December 8, pending approval from the IMF’s first review on December 12. Additional allocations include $200 million for power sector reforms in 2024, $100 million for the water sector, and $50-$70 million earmarked for the tourism sector.
Moreover, ADB has allocated $100 million to enhance access to financing for small- and medium-sized enterprises and another $100 million to bolster public finance and debt management. Sri Lanka’s adherence to the reform agenda outlined in the IMF program is crucial, encompassing the restructuring of state enterprises, deficit reduction, and improvements in governance.
Kadono emphasized that these measures go beyond mere short-term solutions, emphasizing the need for Sri Lanka to address fundamental economic issues and institutional weaknesses. As the country strives for economic recovery, the ADB’s financial support aims to underpin lasting reforms and stability. (NewsWire)