Sri Lanka’s IMF programme aimed to succeed by improving governance. Will it?

9 June 2024 01:34 pm Views - {{hitsCtrl.values.hits}} 27

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Colombo, June 9 (Verité Research) - On June 12, the IMF board will approve Sri Lanka’s third disbursement under the current program. However, Sri Lanka is still falling short on the governance improvements that are foundational for its economic recovery.

According to the latest update of the ‘IMF Tracker’ by Verité Research, Sri Lanka verifiably failed to meet 25% of the commitments due by the end of May 2024 under the program renewed in December 2023. Of the 63 commitments due, 32 were classified as ‘met’, 16 as ‘not met’, and 15 as ‘unknown’ – meaning data was not available to verify their status.

The prognosis of failing on governance comes from examining the 16 commitments that were ‘not met’. Seven of them were on financial management, six on financial transparency, and three on anti-corruption measures. Sri Lanka is failing to comply with the IMF program precisely in the areas diagnosed as the root causes of the economic crisis – problems of financial transparency, management, and corruption. Many of the unmet commitments at the second disbursement were also related to actions on transparency and anti-corruption.

The governance diagnostic assessment (GDA) led by the IMF, published in September 2023, was the first-ever IMF-led GDA for an Asian country. It also aligned closely with a separate GDA published by Sri Lanka’s civil society. The hope was that this 17th IMF program would decisively solve Sri Lanka’s economic woes by addressing the root causes of corruption and mal-governance. However, the lack of progress on these actions – which are now being repeatedly glossed over in program renewal – suggests that the IMF is not giving adequate weight to compliance with the governance commitments.

The standard fiscal measures to which the IMF has given higher weight are those that were present in the 16 previous IMF programs as well. What is distinctive about the current program is the focus on meaningful measures to improve transparency and anti-corruption. If these measures do not become the foundation of Sri Lanka’s economic recovery, it will be a missed opportunity, potentially leading to another IMF program within five years of completing the previous one.

Comments - 27

Anil Fernando Sunday, 09 June 2024 02:07 PM

Verite Research is at it again. Always pointing how many commitments we have failed to achieve but still our tranche is approved.

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Not Uplifting The Living Standards of The People Sunday, 09 June 2024 03:00 PM

Tranche will eventually be approved to the delight of many so called politicians But most not doing their basic duty to ensure the living standards and infrastructures are uplifted and upgraded. Most will engage in maintaining theirs and future generations prosperity and luxury lifestyle.

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Tim Thursday, 13 June 2024 02:23 PM

May be you are expecting miracles. In a bankrupt country it it not possible to change everything overnight. Remember we were heading towards a precipice like a runaway train. We had no money pay for even our essentials. Fuel, Gas, Medicine...They had to stop that first. And some leftist politicians were urging our people abroad not to send money. Now things have changed. But still not normal.

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johan Sunday, 09 June 2024 09:01 PM

Major commitments cannot be fulfilled by the present Govt. as they are also part of it.A new Govt. is a must with people's mandate

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Financial Transparency and Corruption Sunday, 09 June 2024 02:27 PM

Those commentators on previous articles about IMF loans are confident Ranil and current morons are doing a good job! But IMF is saying otherwise as predicted by many others. The main areas are failing on financial transparency and on anti-corruption measures. These are paramount areas where funds can be manipulated.

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Sam Silva Sunday, 09 June 2024 07:52 PM

We don't have better morons. All are the same or worse.

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Tarakki Thursday, 13 June 2024 02:39 PM

Just read the IMF report and their comments. They would have never released the money if they had even an iota of doubt about the way the things are been handled or if we have not fulfilled the major conditions. Of course, there are some areas we have to look into but to fulfill all that we all have to think about our responsibilities too as citizens. This country has become a cesspit. For an example just see the on going strikes led by selfish politicians. We have to get rid of those parasites too if we are to prosper as a nation. Don't blame only the politicians.

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Ranjith Sunday, 09 June 2024 02:43 PM

With or without meeting commitments tranche will be approved IMF is also playing political games to keep the current government and President in power finally Srilanka will end up with total disaster and no economic recovery.

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Roba Sunday, 09 June 2024 02:46 PM

Governance improvement is vital for future prosperity. Otherwise SLPP would Rob again. SLPP did not have any vision to develop our country. They only borrowed and pocketed. In the name "highways" infrastructure development, they robbed. NEPOTISM is not at all suitable to our country.

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Mk Sunday, 09 June 2024 02:52 PM

IMF released a statement saying that Sri Lanka has made "Sufficientlx strong progress".. Varite Research seem to be upset lol

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A blank cheque Sunday, 09 June 2024 02:57 PM

IMF should include ethic reconciliation, governance on the disappeared, help given to war widows.

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Krish Sunday, 09 June 2024 03:56 PM

IMF doesn't consider human rights. That's part of there makeup. Strictly economic.

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IMF measure will fail, they do not understand the level of crookedness here Monday, 10 June 2024 12:25 AM

Everywhere there is scams or attempts at scams of the public purse. During British rule they had all manner of tricks and deceit to scam all in the name of culture and religion. The British had to bring in people from overseas to do hard work like in the Tea Estates. Recently the Central Bank Governor tried to get massive pay rise, something near 75% pay increase while the harder working lower level staff got much smaller. The whole attitude here of most working in government is the scam and do little as possible, with no little regard to actually doing any work. All lip service, just like the MPs.

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IMF are weak minded and will give out funds Monday, 10 June 2024 12:27 AM

IMF will be tricked, and Sri Lanka will be no better than when Gota was President. Only a full Revolution ousting the current Parliament and President can hope to rid the country of the very deep corruption throughout.

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FredSnR Monday, 10 June 2024 03:47 AM

Just politics. For real change to occur, the group that governs has to go. That's what happens in a company when things go fundamentally wrong, that's what must happen in a country. Otherwise where is the accountability. Must have elections.

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Indra Dasa Monday, 10 June 2024 04:13 AM

All Of those information proved that still current government's inability of good governance in Sri Lanka . Especially current government failed to bring political and government sponsored corruption on to hold as required by IMF conditions .

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Gunadasa Monday, 10 June 2024 05:30 AM

Verite' is focusing only on negatives but Sri Lanka has achieved 75% of the requirements. If you achieve 75% in an exam you have passed with a distinction!

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Anil Fernando Monday, 10 June 2024 06:47 AM

The MD of Verite research is on the SJB National list.

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Sambo Monday, 10 June 2024 06:54 AM

Never heard of good governance in Sri Lanka. All work for a quick buck.

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DAR Monday, 10 June 2024 07:45 AM

IMF is financial institution which oversee large scale bankruptcies. Its not a charity that hand over donations. If Sri Lanka is doing okay with IMF plan, then its time to have more stringent conditions and penalties to keep the ship on its course without running aground again. System is engulfed with laziness

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Bandu Monday, 10 June 2024 07:58 AM

IMF can't govern Sri lanka. Its up to Sri Lankans. There is still too much corruption, incompetent in government. Ranil don't want corruption laws and implementation of it to work. Too many crooks in government.

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Wera Monday, 10 June 2024 08:13 AM

It is not the IMF that has the problem with the recovery and reforms but Verite. They have done this before every tranch is released. Sour grapes?

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Terrence K Monday, 10 June 2024 08:30 AM

@Anil Fernando - We need a watchdog like the IMF to point out the unfulfilled commitments. Among the other commitments Transparency and anti-corruption are sine qua non for good governance. The tranches are released for the benefit of the public based that there is a clear recovery of the economy not for the benefit of politicians who have squandered the government purse and driven this country to bankruptcy. Unless there is a dedicated commitment to address these issues the country will have to face a monumental problem in the future with the public down the ladder being affected in their livelihoods whilst the rich will be super rich piggy backing on the poor which could impact with many "ARAGALAYA" and the whole country in chaos. Look at the present scenario of strikes of the Teachers, Grama Sevakayas, Railways.Universities, Mercantile Sector, Nurses, Doctors etc. What we need today are politicians who do not have a blemish in any way to steer this economy!!!!!!!!!

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Sugathaloana Monday, 10 June 2024 08:50 AM

Good governance with this constitution covered with the sinning Cheevaraya and the politicians, officials dancing inside it? only a joke.

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Lucky Monday, 10 June 2024 11:07 AM

We Sri Lankans must know to Govern ourselves --- We Don't. We are not only corrupt to the core we are downright Lazy and don't work; we want payment for NOT working, if we don't get paid for not working ,THEN WE STRIKE,HENCE THE STRIKES TODAY,AT THE DROP OF A HAT. Do these strikers get paid when on strike ? When my Unionized workers, around 1000 of them, struck work I did not pay them for the 3 weeks, After that they NEVER went on strike !

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Lucky Monday, 10 June 2024 11:07 AM

We Sri Lankans must know to Govern ourselves --- We Don't. We are not only corrupt to the core we are downright Lazy and don't work; we want payment for NOT working, if we don't get paid for not working ,THEN WE STRIKE,HENCE THE STRIKES TODAY,AT THE DROP OF A HAT. Do these strikers get paid when on strike ? When my Unionized workers, around 1000 of them, struck work I did not pay them for the 3 weeks, After that they NEVER went on strike !

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Volker Metzger Tuesday, 11 June 2024 09:45 AM

The main finding of the IMF Tracker give rise to hope for a fundamental and lasting restructuringthrough urgent policies that could lead to an end to corruption and mismanagement, the two cardinal errors of the country !!! In summery, Wickremesinghe policies have failed spectacularly because they lack independence, courage and a well-founded strategy plan to eliminate the real causes of the fundamental evils of this society !!! The candidates now running for election, AKD and Premadasa, will also fail largely without the polical, especially economic, programs and strategies ! Only a man like Fonseka, with leadership qualities, analytic- strategic thinking and political foresight, can bring about fundamental social change !!!

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