Introduction and Historical Background (cont...)

 

Introduction and Historical Background

Introduction and Historical Background

4.2.3 Good Governance and Law

·       Good Governance: Improving government transparency and public financial management.

·       Anti-corruption measures: Strictly implementing laws and procedures that reduce corruption.

4.2.4 Environment and Sustainability

• Environmental protection: Projects to protect water, air and groundwater resources.

• Green growth: Development of innovative energy resources such as solar and wind power.

 

4.3 Long-term impacts of the IMF program

1. Economic stability: Inflation will be controlled and foreign exchange reserves will be rebuilt.

2. Debt sustainability: The debt burden will be reduced and the country's financial position will improve.

3. Good governance: The credibility and transparency of the government will increase.

4. Social welfare: The low-income population will be provided with protection.

5. Development path: The foundation for long-term growth will be laid.

 

Part 5: Full Results and Recommendations of the IMF Program

 

5.1 Full Results of the IMF Extended Fund Facility (EFF) Program

5.1.1 Economic Recovery and Stability

The Sri Lankan economy has made a significant recovery through the IMF EFF program. Inflation has been contained and is expected to reach single-digit inflation by 2025. Foreign exchange reserves have risen again to the equivalent of 4.5 months of import costs. This helps meet the country’s import needs.

 

5.1.2 Debt Sustainability and Restructuring

Debt restructuring negotiations have progressed. Agreements have been reached with some major bilateral creditors. Negotiations with private creditors are ongoing. The plan target is to bring public debt below 95% of GDP by 2032.

 

5.1.3 Social Protection and Welfare

Social protection programs have been expanded and direct assistance has been provided to low-income people. This has preserved social peace and balance.

 

5.1.4 Good Governance and Transparency

The government’s financial management and anti-corruption measures have been strengthened. This has helped increase the confidence of international investors.

 

5.2 Role of the IMF Program in Sri Lanka’s Economic Reform

The IMF EFF Program plays a key role in Sri Lanka’s economic reform. It:

1. Fiscal Support: Helps address the fiscal deficit.

2. Debt Restructuring: Reduces the debt burden and ensures the country’s fiscal sustainability.

3. Economic Policy Changes: Advances tax, monetary, and structural reforms.

4. Social Protection: Reduces social vulnerabilities and protects vulnerable populations.

5. Improving Good Governance: Improves government transparency and public credibility.

 

5.3 Recommendations

5.3.1 Political stability and unity

• Political leaders and all parties should fully support economic reforms.

• Ensure political stability and smooth implementation of the project.

 

5.3.2 Accelerate debt restructuring

·       Negotiations with bilateral and private creditors should be concluded expeditiously.

·       Long-term agreements should be secured to reduce the debt burden.

 

5.3.3 Expansion of social protection

·       Social protection schemes should be further expanded to low-income groups.

·       Measures should be taken to mitigate the effects of changes in order to maintain social peace.

 

5.3.4 Innovation and development in economic sectors

·       Investment in tourism, exports and technology sectors should be encouraged.

·       Training to improve the skills of workers should be increased.

 

5.3.5 Promotion of good governance and transparency

·       Anti-corruption measures should be strictly enforced.

·       Transparency and accounting systems in public financial management should be improved.

 

5.3 Recommendations

5.3.1 Political stability and unity

• Political leaders and all parties should fully support economic reforms.

• Ensure political stability and smooth implementation of the project.

 

5.3.2 Accelerate debt restructuring

·       Negotiations with bilateral and private creditors should be concluded expeditiously.

·       Long-term agreements should be secured to reduce the debt burden.

 

5.3.3 Expansion of social protection

·       Social protection schemes should be further expanded to low-income groups.

·       Measures should be taken to mitigate the effects of changes in order to maintain social peace.

 

5.3.4 Innovation and development in economic sectors

·       Investment in tourism, exports and technology sectors should be encouraged.

·       Training to improve the skills of workers should be increased.

 

5.3.5 Promotion of good governance and transparency

·       Anti-corruption measures should be strictly enforced.

·         Transparency and accounting systems in public financial management should be improved.

 

5.4 Conclusion

The IMF Extended Fund Facility (EFF) program is crucial to Sri Lanka’s economic recovery. It not only provides financial support, but also promotes economic and structural reforms, laying the foundation for the country’s long-term development.

 

The success of the program lies in political stability, debt restructuring, social protection, and the promotion of good governance. With proper implementation and cooperation from all stakeholders, the Sri Lankan economy can achieve stability and growth.

Introduction and Historical Background (cont...)