INSUBCONTINENT EXCLUSIVE:
Sri Lanka will seek World Bank assistance to stave off a severe economic crisis in addition to an International Monetary Fund (IMF) rescue
plan to be discussed next month, two sources said.A 70% drop in foreign exchange reserves since January 2020 has left Sri Lanka struggling
to pay for essential imports, including food and fuel, leading to growing unrest and even military deployments at gasoline stations.Holding
paltry reserves of $2.31 billion as of February, the country must repay about $4 billion in debt over the rest of this year, including a $1
billion international sovereign bond that matures in July.To seek a way out of the crisis, Finance Minister Basil Rajapaksa will fly to
Washington DC next month to hold talks with the IMF and also officials from the World Bank, two sources with direct knowledge of the plans
government will ask the World Bank for.The source was unable to provide the size of World Bank assistance that Sri Lanka could seek.The
World Bank typically extends support to boost exports, improve economic competitiveness and aid growth, analysts said.In heavily indebted
Argentina, for example, the World Bank is working on approving a $2 billion loan package for 2022 that includes support for infrastructure,
health, social inclusion and environment projects.Both sources, who declined to be named, since discussions were confidential, said such
assistance would likely come after Sri Lanka entered into an IMF-supported loan programme.In response to questions from Reuters, the World
greater exchange-rate flexibility and better-targeted subsidies, which may hit the poor, analysts said.Transparent energy pricing is also
likely to drive up fuel and electricity costs.The World Bank could promote direct subsidy transfer, push green energy and develop human
capital through improvements in health, education, and social protection, the second source said.Source: Reuters-Agencies
This article first appeared/also appeared in https://adaderana.lk
