REALITY CHECK The latest pronouncements by the World Bank and Asian Development Bank (ADB) puts Sri Lanka’s economic plight in perspective – even though we are witnessing tepid growth amid continued hardships!
“Sri Lanka’s economy is projected to witness moderate growth of 2.2 percent this year, showing signs of stabilisation following the severe economic downturn in 2022,” the World Bank asserts, adding: “But the country still faces elevated poverty levels [nearly 25% of the population], income inequality and labour market concerns.”
What’s more, its projections for the next two years are only slightly higher at 2.5 percent and three percent respectively.
Meanwhile, in mid-April the ADB cautioned that “uncertainty over elections could risk Sri Lanka’s economic recovery.”
It explained that uncertainty over the impending elections could cause a downtrend in the economic outlook. Political uncertainty prevails as opposition parties have pledged to reverse the existing IMF-linked reforms – which have proved to be unpopular with the masses – and the possible implications for fiscal policy and reform implementation, it adds.
The bank’s South Asian chapter’s economic trends report notes that challenges remain; and it says that the upcoming electoral cycle should not delay the reforms aimed at addressing the economic crisis – and Sri Lanka needs to address vulnerability to poverty to ensure inclusive growth.
There’s also a dire warning that delays in completing the debt restructuring process and any barriers to passing key legislation could dampen sentiment and derail growth.
As for the so-called ‘election cycle,’ the sad reality is that the hustings will see a repeat of the musical chairs that our politicians play every four years, which merely serves old wine in new bottles – and that in turn serves as a paradox of where ‘democracy’ has led the nation and its people over the decades.
So an island with untold potential and a steely resilience finds itself in the midst of a watershed year – one in which we will either see ‘more of the same’ or a ‘system change’ that will eventually lead to ‘more of the same’ – or worse, as we have seen in recent years!