World Bank reassures support for Sri Lanka to build back better from COVID-19

World Bank Country Director for the Maldives, Nepal and Sri Lanka Faris Hadad-Zervos concluded a successful visit to Sri Lanka yesterday, where he reiterated the World Bank’s commitment to support Sri Lanka’s efforts towards recovery and to build back better from the COVID-19 shock.

Based in Kathmandu, Nepal, this latest mission followed Hadad-Zervos’ introductory visit to Sri Lanka last November, after assuming his new role in July 2020. Hadad-Zervos was joined by Country Manager for the Maldives and Sri Lanka Chiyo Kanda, based in Colombo.

“Sri Lanka’s economy is on the road to recovery after the worst downturn on record last year. The World Bank stands ready to support the Sri Lankan government as it strives to protect its people from the pandemic, while addressing the vulnerabilities in the macro-fiscal environment,” said Hadad-Zervos. 

“Recovery and resilience in the post-COVID era can be accelerated by an export-oriented growth model that taps the full potential of private investments and that increases competitiveness and growth.”

The visit coincided with the launch of the Sri Lanka Development Update: Economic and Poverty Impact of COVID-19, which was released on April 9. The report provides an update on Sri Lanka’s economy and outlook, highlighting the devastating impact of the pandemic. Sri Lanka’s economy contracted by 3.6 percent in 2020, the worst growth performance on record, as is the case in many countries fighting the pandemic but is expected to recover to 3.4 percent in 2021, mainly due to foreign investments as well as normalising tourism and other economic activities.

During the visit, the World Bank management team met with key government officials, including Plantation Minister Ramesh Pathirana, Water Supply Minister Vasudeva Nanayakkara, Highways Minister Johnston Fernando, Money and Capital Market and State Enterprise Reforms State Minister Ajith Nivard Cabraal, Special Presidential Task Force on Economic Revival and Poverty Alleviation Chairman Basil Rajapaksa, Secretary to President Dr. P.B. Jayasundera, Secretary to Treasury Sajith Attygalle, Technology Ministry Secretary Jayantha De Silva, Principal Advisor to President Lalith Weeratunga and Central Bank Governor Prof. W.D. Lakshman.

Meetings were also held with private sector representatives, development partners as well as thought leaders to better understand how the World Bank can add value to Sri Lanka’s inclusive growth and sustainable 
development story.

“The in-depth discussions we have had with government officials, private sector and development partners will help us focus on the priority areas – critical for building a greener and more resilient economy that benefits all Sri Lankans,” said Kanda.

“We explored many new, exciting avenues for collaboration, including harnessing the power of digital technologies to provide more and better opportunities for all Sri Lankans.”  

The visit also saw the signing of two important agreements between the World Bank and Sri Lankan government. A US $ 69.53 million credit will help improve dams and irrigation schemes, covering 165,000 hectares of agricultural land and improve the management of watersheds and water resources, benefitting 356,000 farming families. Under a second US $ 69.33 million loan, a modern transport terminal will be built in the Kandy city that will integrate rail, bus, three-wheeler and pedestrian traffic to make it safer and more efficient.

The World Bank responded to the COVID-19 outbreak in Sri Lanka by repurposing a large portion of its current portfolio to assist the government in reducing the pandemic’s effects. Supplying critical personal protective equipment (PPE), providing temporary cash assistance to vulnerable groups, strengthening COVID-19 security mechanisms on public transportation, promoting tele-education for students and providing technologies to enhance public service delivery are some of the initiatives supported by the World Bank. Further, support in managing the situation, especially through a speedy and efficient vaccination programme, is also on the table.

The current World Bank portfolio in Sri Lanka consists of 19 ongoing projects, with a total commitment value of US $ 2.33 billion in a variety of sectors, including transport, urban, agriculture, water, education and health.