Deputy Managing Director Kenji Okamura stresses hard-won gains of reforms-supportive Sri Lankan people can only be safeguarded by good governance
Emphasises it is imperative to protect poor and most vulnerable disproportionately affected by crisis
Says economic recovery remains challenging and more than ever, it is essential to continue reform momentum under strong ownership by both authorities and Sri Lankan people
Reiterates IMF’s commitment to support Sri Lanka’s efforts to surmount challenges
Looks forward to SL negotiating a debt strategy in a timely and transparent manner and restore debt sustainability
Stresses safeguarding stability of financial sector is of utmost importance in this process
The International Monetary Fund on Friday said hard-won gains of reforms-supportive Sri Lankan people can only be safeguarded by good governance.
The emphasis by the IMF was following the conclusion of the visit of its Deputy Managing Director Kenji Okamura and multiple discussions with the Government and other stakeholders.
In a statement, Okamura said he had the privilege to visit the Parliament and during the meeting with the Parliamentarians, discussed the importance of strengthening governance, which is a central pillar of the program.
“The hard-won gains of Sri Lankan people who have relentlessly supported the reform effort can only be safeguarded by good governance,” the IMF Deputy MD emphasised.
“As Sri Lanka navigates its way through the economic crisis, it remains imperative to protect the poor and the most vulnerable that have been disproportionately affected by the crisis. I was heartened to see that the authorities’ have stepped up efforts to increase public spending on social safety nets while improving targeting and coverage for those who need it,” he added.
The IMF official was in Sri Lanka to review the progress of the on-going 48-month arrangements of $ 3 billion under the Extended Fund Facility (EFF) with Sri Lanka.
Meeting were held with the President and Minister of Finance Wickremesinghe, CBSL Governor Weerasinghe, Speaker of Parliament Mahinda Yapa Abeywardhana, Foreign Affairs Minister Ali Sabry, Justice Minister Wijeyadasa Rajapakshe, State Minister of Finance Shehan Semasinghe, State Minister of Investment Promotion Dilum Amunugama, Secretary to the Treasury Mahinda Siriwardana, senior government officials as well as private sector representatives.
“I very much appreciated the constructive discussions I had during my visit, which allowed me to deepen my understanding of the challenges Sri Lanka is facing and to reiterate the IMF’s commitment to support Sri Lanka’s efforts to surmount these challenges,” the Deputy MD said.
He welcomed the authorities’ strong commitment to implement their ambitious economic program which is supported by the IMF.
“The economic reform program aims to achieve macroeconomic stabilisation, restore debt sustainability, safeguard financial stability, strengthen governance, and protect the vulnerable. Sri Lanka’s economy is showing tentative signs of improvement, in part due to the implementation of critical policy actions. But the economic recovery remains challenging. Now, more than ever, it is essential to continue the reform momentum under strong ownership by both the authorities and the Sri Lankan people,” Okamura emphasised.
According to him the current economic crisis has its genesis in policy missteps aggravated by external shocks.
“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability. I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner. Continued open dialogue with the creditors will help to reach restructuring agreements to restore debt sustainability in line with the program targets. Undoubtedly, safeguarding the stability of the financial sector is of utmost importance in this process,” he said.
Okamura also visited the Colombo Dockyard, the South Asia Gateway Terminal of the Colombo Port and the Colombo Port City. “I was impressed to see continued economic activity which is a testament to the resiliency of the Sri Lankan economy. I underscored the importance of decisive implementation of structural reforms which can attract investment and boost growth,” he pointed out.
The IMF Deputy MD also said that he very much appreciates the excellent, long-standing relations between Sri Lanka and the IMF, and looks forward to continued partnership through the EFF-supported economic program. “I will leave Colombo with fond memories of the country and its welcoming people,” Okamura added.