ISLAMABAD, July 31 (Alliance News): The World Bank said it would not offer new financial aid to Sri Lanka until the bankrupt country undertakes ‘deep structural reforms’ to stabilize its battered economy.
According to foreign media, Sri Lanka is suffering from an unprecedented crisis where its 22 million citizens have been enduring months of food and fuel shortages, blackouts and soaring inflation.
The South Asian nation defaulted on its $51 billion foreign debt in April, and earlier this month violent protests forced former President Gotabaya Rajapaksa to flee the country.
The World Bank has said it is concerned about the impact of the crisis on the people of Sri Lanka but is unwilling to provide funds until the government makes the necessary reforms.
The lender said in a statement that the World Bank “does not intend to offer new financial assistance to Sri Lanka until an appropriate macroeconomic policy framework is in place”.
This requires deep structural reforms that focus on economic stability and also address the underlying structural causes of the crisis, the statement added.
The World Bank said it had already diverted $160 million of existing loans to finance urgently needed medicines, cooking gas and school meals.
Sri Lanka is currently negotiating a bailout with the International Monetary Fund, but officials say the process could take months.
The South Asian country has run out of foreign exchange even for much-needed imports, and chronic shortages have fueled public anger.