World Bank Director Commends Sri Lanka’s Recovery Efforts

Manik De Silva, Faris H. Hadad-Zervos and Feizal Samath

Maldives, Nepal and Sri Lanka World Bank Country Director Faris H. Hadad-Zervos

We estimate that poverty doubled from 13.1 to 25 percent between 2021 and 2022—an addition of 2.5 million poor people—and we expect this to increase by another 2.4 percent in 2023. Many more people are just one shock away from poverty

The World Bank Country Director praised the Sri Lankan government for achieving economic milestones and securing international financial support at an event focused on Sri Lanka’s recovery and development, emphasizing the need for inclusive and sustainable growth while highlighting the challenges of rising poverty and declining educational standards.
Maldives, Nepal and Sri Lanka World Bank Country Director Faris H. Hadad-Zervos congratulated the Sri Lankan Government on securing the International Monetary Fund Extended Fund Facility, the Parliamentary approval of the Domestic Debt Restructuring, and securing international financial support from the World Bank and the Asian Development Bank.
He made these observations while speaking on the title Towards Sri Lanka’s Recovery: Green Resilient and Inclusive Development at the Press Club event hosted by the Sri Lanka Press Institute (SLPI) held at The Blue of the Hilton Colombo on Tuesday, July 18, 2023.

The event commenced with the welcome address delivered by Senior Board Member of the SLPI Manik De Silva. The event was moderated by the Business Editor of The Sunday Times Feizal Samath.
During his speech Hadad- Zervos stated that the government has committed to an ambitious reform agenda and implemented some difficult and necessary reforms, including tax reforms, cost-reflective utility pricing, a stronger social safety net, and debt restructuring to stabilize the economy.
He stated that there have been some signs of stability in the past few months compared to 2022. Inflation is trending downwards from 69.8% in September 2022 to 12% in June 2023. Market interest rates are also declining as the uncertainty over domestic debt restructuring wanes and the foreign exchange liquidity picture has also improved.
“We estimate that poverty doubled from 13.1 to 25 percent between 2021 and 2022—an addition of 2.5 million poor people—and we expect this to increase by another 2.4 percent in 2023. Many more people are just one shock away from poverty,” Hadad- Zervos said.

“We estimate that 5.7 percent of the population lives less than 10 percent above the poverty line, and a further 5.6 percent between 10 and 20 percent above the poverty line. This dramatic increase in poverty and vulnerability has wiped-out decades-long human capital gains. For example, there is now a serious learning crisis in the country. Only 14% of Grade 3 students have acquired minimum competency in literacy and only 15% in numeracy”

He stated that the World Bank Group’s new Country Partnership Framework and US$700 million financing support through the RESET DPO and the Social Protection project is our commitment to the Sri Lankan people at this difficult time. In response to both COVID-19 and the economic crisis, the World Bank repurposed significant undisbursed funds from its existing portfolio to sustain institutions so they could continue to provide essential goods and services, protect the vulnerable, support livelihoods, and address food insecurity.
The PRESS CLUB is envisaged to be a place where media-related events concerning visiting dignitaries and local personalities on current topics of national and international interest take place. The Press Club functions under the SLPI whose constituent partners are the Newspaper Society of Sri Lanka (NSSL), The Editors’ Guild of Sri Lanka (TEGOSL), the Free Media Movement (FMM), the Sri Lanka Working Journalists Association (SLWJA) with its affiliated partners Federation of Media Employees Trade Union (FMETU), Sri Lanka Muslim Media Forum (MMF), Tamil Media Alliance (TMA), and South Asia Free Media Association (SAFMA).
The event was attended by journalists, diplomats and experts.