Depth of crisis affirms SL needs new economic development model: WB

2 March 2023 03:23 am - 18 - {{hitsCtrl.values.hits}}

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Martin Raiser

WB VP points out road to recovery is challenging and fiscal adjustment measures can be painful
Stresses international community must help Sri Lanka to strike right balance
Asserts SL has a chance to reset its development model towards green, resilient and inclusive growth

As the economic collapse and political instability have devastated the lives and livelihood of the people of Sri Lanka, the island nation is in dire need of a new development model, the World Bank (WB) said.

However, the road to recovery is challenging and the necessary fiscal adjustment measures can be painful.

“Debt relief from Sri Lanka’s creditors and fresh financing from international financial institutions are thus urgent to ensure people don’t lose patience with reforms and the opportunity for a change isn’t lost,” pointed out WB Group Vice President South Asia Region Martin Raiser, in his latest blog.

Given that the country is visibly struggling to cope with the daily struggles, Raiser asserted that the international community must help Sri Lanka strike the right balance between pursuing critical reforms to get the economy back on track. Efforts are also needed to ensure that people have access to safety nets, better jobs and economic opportunities.

The economic crisis has left deep scars. Poverty nearly doubled in Sri Lanka between 2021 and 2022, climbing from 13 percent to a staggering 25 percent and is projected to increase by more than two percentage points in 2023. In the same time frame, urban poverty tripled from 5 to 15 percent.

People have been forced to quickly adapt to a new reality, where prospects for a good job are limited, incomes are lowered and eroded by inflation and opportunities for a better future are becoming increasingly rare.
In 2022, at least half a million people lost their jobs, most of which were in the industry and services sectors and employed women.

Those already classified as poor saw a 65 percent increase in their cost of living, while the increase was 57 percent for the non-poor, highlighting the significant loss of welfare for all Sri Lankans.

“As Sri Lanka recovers, it is essential not only to help people escape poverty and vulnerability but also to strengthen their resilience to future shocks in an increasingly volatile world, noted Raiser. The WB official added that linking cash transfer beneficiaries to economic opportunities and complementary measures—such as skill training, job coaching and access to finance—can make Sri Lankans more employable, enabling them to rebuild their assets and improve their economic well-being.

These interventions can be catalysed by measures that promote job creation through an improved business environment and access to finance, especially to support small and medium firms that are prevalent across Sri Lanka.

“With every crisis comes an opportunity. For Sri Lanka, this pivotal moment is a chance to reset its development model towards green, resilient and inclusive growth.

“What is important now is sustaining the reform momentum, rebuilding trust in public institutions through greater transparency and accountability and protecting the livelihoods of those most affected by the crisis. Such efforts deserve support from Sri Lanka’s international partners,” said Raiser.

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Comments - 18

Sunil Gamage Thursday, 02 March 2023 07:15 AM

Without reconciliation we can't think of a truly developed country in the future. Find out who was actually behind the ethnic war continued over 30 years which devastated our economy. Always petty politicians in Sri Lanka used ethnic problem created by themselves to remain in power at the expense of true development.

Robin Banks Thursday, 02 March 2023 07:18 AM

In other words STOP STEALING.

joshua Thursday, 02 March 2023 08:58 AM

First we need some good and honest politicians who are well educated. Just see the caliber we have now. How can a country move forward? They priority is to rob

Lank Thursday, 02 March 2023 09:01 AM

It is easy to lecture but is difficult to apply all those advice. It is bad Politics that has destroyed all this .

Iwazaru Thursday, 02 March 2023 09:28 AM

The model, stop corruption and the job is done.

Dilshan Perera Thursday, 02 March 2023 09:30 AM

Democracy has been the main cause of corruption and this mess.. we need to follow China's model..

N Surya Thursday, 02 March 2023 02:18 PM

It may end up as North Korean model.

Reformist Thursday, 02 March 2023 09:40 AM

There is one most important solution for SL. Political reforms and very harsh anti-corruption laws. SL Parliament should be reduced to a maximum of 100 MPS and Cabinet to maximum of 20 (including deputy Ministers). All ethnicity and religion based political parties should be banned. All duty free permits and other benefits given to the MPS and public servants MUST stop immediately. SL will never be a developed country with the likes of uneducated and vision-less MPs and unskilled chair-warming public servants it currently has. It should also stop its reliance on tourism lead recovery and instead, should promote a knowledge based economy. Otherwise, the country is gloomed forever.

Jude Thursday, 02 March 2023 09:44 AM

MORE THAN A NEW ECONOMIC DEVELOPMENT MODEL, COUNTRY NEEDS REGIME CHANGE !! THEREAFTER EVERYTHING WILL FALL IN PERSPECTIVE, YEAH!!

Jude Thursday, 02 March 2023 09:54 AM

Wait for couple of years the "Socialist" are becoming more and more Mainstream in SL, Yeah!!

Jude Thursday, 02 March 2023 10:00 AM

ONCE The socialist take over One thing assured NO GOVERNMENT CORRUPTION THEREBY SAVING BILLION OF RUPEES, yeah!!

Jude Thursday, 02 March 2023 10:06 AM

One new economic development model that guaranteed to save MORE THAN ONE TRILLION RUPEES ANNUALLY IS REDUCING NUMBER OF PARLIAMENT MEMBERS TO 100 OR LESS!! YEAH!! AND SCRAP LG MEMBERS AND PC COUNCILLORS!!

DOT Thursday, 02 March 2023 11:22 AM

We have plenty of Old wine Bottles!

SCRanjithA Thursday, 02 March 2023 11:45 AM

REFORMIST - I too contribute to the 'spirit' of your suggestions. Overnight nothing could be achieved. Basically our law-makers could not differ the LG elections until the Report of the Delimitation Commission to reduce the No. of Wards

Dee Thursday, 02 March 2023 12:56 PM

Most people are upset that this statement does not call for immediate general election!

Nuwan Thursday, 02 March 2023 02:23 PM

Harsh political decisions can't be made. 1.5 million government sector is holding other 7 million into ransom. Many seem to want to reduce income tax and tax more on goods and services. People don't seem to want to do surgery for a cure, but are looking to go after miracles as promised by typical politicians.

gamarala Thursday, 02 March 2023 03:33 PM

Yes. My opinion is 100 is also higher. 50 is more than enough. 10 cabinets ministers and no deputy or any sort of other. Pension and other benefits should be removed from MPs and former Presidents.

Sugee Gamagae Thursday, 02 March 2023 04:33 PM

We need a reconciliation, and external auditors to audit our government (eg. from UK or Norwegian government auditors )

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Depth of crisis affirms SL needs new economic development model: WB

Comments - 18

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