Government to boost economic stability and green growth
Sri Lanka’s new government is set to adhere to the Asian Development Bank’s (ADB) latest country partnership strategy for 2024-2028.
This strategy aims to build on the existing support provided to help the country restore macroeconomic stability and achieve environmentally sustainable, long-term growth.
This will pave the way toward unlocking the bank’s US$100 million support.
This strategy announced recently responded to the country’s economic situation by tailoring ADB assistance to address long-standing macroeconomic imbalances and structural impediments through knowledge solutions, policy advisory support, and priority investments, Finance Ministry sources said.
The ADB programme will be strengthening public expenditure management, enhancing revenue collection, and improving the governance and efficiency of state-owned enterprises (SOEs), public–private partnerships (PPPs), and the Employees’ Provident Fund.
A central component of the programme is the promotion of transparency in public finances to build trust in public institutions.
The programme is strictly aligned with the government’s reform agenda set out in the Memorandum of Economic and Financial Policies submitted to the International Monetary Fund (IMF), the Climate Prosperity Plan 2022, the ADB emphasised.
It is consistent with the strategic objective of improving public financial management (PFM) and governance central to Asian Development Bank’s (ADB) country partnership strategy for Sri Lanka, 2024–2028.
ADB’s assistance under the new CPS will focus on three strategic objectives: strengthening public financial management and governance; fostering private sector development promoting green growth; and improving access to climate-smart public services and deepening inclusion.
Three thematic priorities—climate action, disaster resilience, and environmental sustainability; gender equality and social inclusion; and governance, capacity development, and digitalisation—will be integrated into the CPS objectives. The new CPS will support the country’s efforts to tackle the key underlying causes of the economic crisis. ADB will focus on reforming public financial management system, strengthening governance, accelerating domestic resource mobilisation, and improving fiscal and debt sustainability, as well as measures to improve the performance of state-owned enterprises.
The strategy recognizes the critical role of the private sector in the country’s recovery and long-term economic growth. Structural reforms to promote greater private sector participation in the economy and diversify the economy with emphasis on green and sustainable growth will be supported under the new strategy.
ADB will continue to support financial inclusion and small and medium-sized enterprises development, especially those managed by women, and provide advisory and capacity building support to promote trade and investment.
The strategy aims to improve access to climate-smart public services and deepen inclusion through strengthening social protection and human capital development and fostering agriculture modernisation. As of the end of December 2023, ADB had committed more than $3.7 billion in 45 public sector loans and grants in Sri Lanka, as well as $25.6 million in private sector investments.
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