By Rusiripala Tennakoon –
Today much of the ongoing discussions about the country’s economy are centered around the international financial institutions. In particular their response to our requests for assistance. The IMF and the World Bank are in the forefront. Both these institutions are serving the same member countries because a country has to first join the IMF to be eligible o join the World Bank Group. The World Bank Group has five different institutions under its umbrella sharing among them the responsibility of serving a common objective of reducing poverty, increasing shared prosperity, and promoting sustainable development. The IDA and the IBRD of the WB are the two agencies addressing these with the former(IDA) with a special focus on the world’s poorest countries, and the(latter) IBRD assisting middle-income and creditworthy poorer countries, respectively.
International Monetary Fund’s main focus is to stabilize the international monetary system and to act as a monitor of the world’s currencies, keeping a track of the global economy and the member countries. It lends to countries with balance of payments difficulties, and provides practical help to members.
In the current context of the present crisis, are we correctly focusing attention to these areas of available assistance and the programs, targeting exactly what we want to achieve?
Is the World Bank moving ahead of us?
In line with its common objective of reducing poverty, the principal focus of the World bank would be to address ways and means of alleviating the hardships of the poorest segments of the society. Our policy directions too should be so oriented with emphasis on this aspect. Let us therefore examine the role plays of both the WB and our own dedicated agencies towards this aim.
To make it more authentic and in order to ascertain the true position I thought it would be more appropriate to quote from the official announcements of the WB on the Sri Lanka situation;
World Bank Statement- JULY 28, 2022 on Sri Lanka
“The World Bank Group is deeply concerned about the dire economic situation and its impact on the people of Sri Lanka.
To help alleviate severe shortages of essential items such as medicines, cooking gas, fertilizer, meals for school children and cash transfers for poor and vulnerable households, we are repurposing resources under existing loans in our portfolio. To date, about US$160 million of these funds has been disbursed to meet urgent needs. In addition, other ongoing projects continue to support basic services, the delivery of medicine and medical supplies, school meals and tuition waivers.
We are working closely with implementing agencies to establish robust controls and fiduciary oversight to ensure these resources reach the poorest and most vulnerable. We will continue to monitor this closely. We are also coordinating closely with other development partners to maximize the impact of our support for the people of Sri Lanka.
Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka. This requires deep structural reforms that focus on economic stabilization, and also on addressing the root structural causes that created this crisis to ensure that Sri Lanka’s future recovery and development is resilient and inclusive.”
It is Sri Lanka that is in need of such assistance, hence the lead role for ensuring the required inflows to achieve this objective rests on our side. But where do we stand?
We only hear about harangues highlighting issues which always end up as accusations and allegations levelled against each other during parliamentary sessions. They include the following;
Acute shortages in medical supplies;
Deteriorating standards of malnutrition affecting children;
Shortages and unbearable cost of school amenities;
Every so often supply shortages of cooking gas;
Heartbreaking news items about starvations and resulting loss of human lives;
Aggravating day to day livelihood issues;
Ships waiting to unload supplies of essential commodities including fuel for want of foreign exchange;
Patients in Government hospitals asked to bear the cost of their lab tests from private sources;
Gross inadequacy of free social assistance to sustain family expenses among the poorest sectors;
Inflation (especially that of the Food Sector) increasing unprecedently;
Ironically these verbal battles have become ‘mere aerosol transmissions’ for casual conversations finally vaporizing into thin air without reaching any meaningful conclusions.
We neither see nor hear any agreement or understanding about any contemplated actions or at least a frank admission of the existence of such situations. Is this our role play in this calamitous critical situation?
Isn’t it the responsibility of our authorities at all levels to address these in a much more serious manner going beyond the concerns of the International Agencies? Country expects the participation and involvement of our authorities instead of this ‘talk shop’ audacity.
Food for Thought
If we look at the country overview by the Word Bank we need no further expertise to understand our failures, lapses and the areas where we should concentrate on with a special focus. Let us list those for easy reference;
The WB admits that they accept we are facing a dire economic situation with serious impact on the people; They also endorse there is an urgent necessity To help alleviate severe shortages of essential items such as medicines, cooking gas, fertilizer, meals for school children and cash transfers for poor and vulnerable households;
WB is ready to repurpose resources under existing loans in our portfolio. To date, about US$160 million of these funds has been disbursed to meet urgent needs.
* WB is also coordinating closely with other development partners to maximize the impact of their support for the people of Sri Lanka
* WB has agreed to work closely with implementing agencies to establish robust controls and fiduciary oversight to ensure their resources reach the poorest and most vulnerable.
* WB wants an adequate macroeconomic policy framework to be in place; they will not offer new financing to Sri Lanka until this is done. They expect deep structural reforms that focus on economic stabilization.
* They want us to address the root structural causes that created this crisis
These concerns open the avenue for addressing the need to fall inline with the World Bank objectives and support their action programs with a firm commitment. It is evident that the WB is working in close collaboration with other international agencies to ensure their support to reach the people of Sri Lanka in this hour of need.
We have to reorganize our internal mechanisms and the administrative machinery to help ensure the reaching of the resources to the vulnerable sectors of the society. They want us to establish a macroeconomic policy framework to be in place as a precondition to the World bank to provide any new financing to Sri Lanka. They insist on deep structural reforms with the objective of economic stabilization. The Government of Sri Lanka is also expected to PROBE into the causes that led to this crisis.
All these point towards a need for a serious commitment on the part of the Government to put the house in order to become eligible to obtain assistance. Paying lip service without any acceptable policy plan and framework will not pave the way to qualify for obtaining help and assistance in this highly crucial hour of need even from the few available resource bases.
It will be a prudent step to authentically ascertain how the 160 million USD grant already released has been utilized.
More importantly, it is compulsory for us to ascertain the true picture of the already committed project funds to divert them to more needy areas, under the present circumstances, with the agreement to repurpose such funds as a special humanitarian assistance program announced by the World Bank. If we can successfully conclude this task it would help us to have access to significant amounts to mitigate the serious economic hardships we are now facing until the IMF and other fund sourcing arrangements materialize.