While managing the risks related to fiscal and trade policy reforms, public debt and contingent liabilities, the World Bank yesterday insisted that Sri Lanka should also focus on mitigating the impact from natural disasters, which have become more frequent with climate change.
“Natural disasters continue to be a drag on the economy. Growth prospects would have been better, had the impacts of natural disasters mitigated,” World Bank Senior Country Economist for Sri Lanka and Maldives Ralph Van Doorn, said.
He said this at the unveiling of the second Sri Lanka Development Update in Colombo, yesterday.
“Disaster risk management should be an integral part of Sri Lanka’s growth model,” Doorn added.
In recent times, Sri Lanka has been on the receiving end of the nature’s wrath by way of floods, landslides and is experiencing the worst drought in three decades.
Due to this, the country’s economic growth was mainly driven by construction and investment, while the agricultural sector recorded negative growth. About 30 percent of Sri Lanka’s labour force is employed in the agriculture sector.
During his presentation Van Doorn pointed out that natural disasters have widespread impact and the country’s poor is affected disproportionately.
He said that although Sri Lanka’s poverty rate has declined to 4.1 percent, the estimated poverty rate of those affected by the floods stands at 8.7 percent and those affected by the drought at 11.7 percent.
Due to supply side disruption caused by bad weather and demand pressures are keeping the country’s inflation at elevated levels, making people to pay more for the goods and services they consume. However the WB is of the opinion that inflation will moderate by the first quarter of next year.
Meanwhile, the World Bank stressed on the need to be better prepared to deal with future natural calamities. Sri Lanka disturbingly lags in that department and so far has been able to respond to such situations in a hap-hazard manner.
“Sri Lanka can become an upper-middle income country by maintaining macro-fiscal stability and increasing its preparedness for natural disasters,” Van Doorn added.