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Sri lanka News – Sri Lanka has started talks for a budget support loan from the World Bank linked to a series of public finance reforms, boosting competitiveness and social protection, the President’s media office said.

The development policy loan will aim at improving economic governance, boosting competitiveness and protecting the poor.

The policy matrix discussed at the first meeting included improving public debt management, budgeting, tax administration, state enterprises, public procurement, state enterprises, severing a sovereign-financial sector nexus, improving stewardship of the financial sector and reducing systemic risk.

Also on the table were cutting tariffs to reduce “anti-export bias and elite capture”, eliminating barriers to foreign investment, reducing dependence on imported fuels.

A development policy loan will disburse funds as a series of reforms are made as prior actions.

the country to stabilize economically, to have a solid policy framework and to go into the road map that is needed

Senior Advisor to the President on National Security and Chief of Staff of the President Sagala Ratnayake who met the World Bank team and country manager Chiyo Kanda had said this was the best opportunity to have a solid policy framework with a roadmap.

The World Bank is one of the agencies that is expected to provide co-financing when the International Monetary Fund’s Executive Board approves a 2.9 billion US dollar loan, after Sri Lanka re-structures its debt.

At the moment the World Bank cannot give loans after Sri Lanka defaulted and its debt was labelled unsustainable.

Sri Lanka, a market access country which borrowed from the International Bank for Reconstruction and Development arm of the lender before the default has asked to be reverse graduated to a country that qualifies for concessional International Development Association loans. (Colombo/Nov09/2022)

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