ADB Chief optimistic of Sri Lanka’s path to recovery

ADB President Masatsugu Asakawa (right) addresses the global media at the opening press conference of the 56th Annual Meeting of the ADB Board of Governors in Incheon, Republic of Korea yesterday  

• Says prospects to overcome crisis via reforms to bolster socio-economic development will depend on meaningful, transparent external debt process
• Welcomes GoSL’s initial policies toward stabilisation
• Insists all bilateral and private creditors be included in equitable manner in debt restructuring process
• Highlights ADB is actively preparing for Budgetary support programs for Sri Lanka
•  Meets Foreign Affairs Minister Ali Sabry heading Lankan delegation for ADB Annual Meeting in South Korea
• ADB coordinating with IMF to extend $ 350 m Special Policy Based Loan to support areas of banking, power, trade and investment, agriculture, urban development and water tourism and climate change

By Charumini de Silva in Republic of Korea

The Asian Develo-pment Bank President Masatsugu Asakawa yesterday expressed optimism over steps taken for Sri Lanka’s path to recovery with the four-year Extended Fund Facility program secured from the International Monetary Fund (IMF).

He said future prospects to overcome the economic crisis and reforms to bolster socio-economic development will be in the hands of meaningful restructuring of external debt via a full transparent process.

“The Government of Sri Lanka has already taken some initial policy steps towards stabilisation. 

However, external debt restructuring is another issue,” he said.

Although the ADB will not be part of the debt restructuring exercise itself, he however said it is important that all bilateral and private creditors be included in an equitable manner throughout the debt restructuring process.

 “ADB continues to maintain our close cooperation with the IMF, World Bank and other development partners. Our team in Sri Lanka has been intensifying the policy dialogues for support and for the development agenda, including the renewable energy sector,” the ADB President told the Daily FT on the sidelines of the Bank’s 56th Annual Meeting in Incheon, Republic of Korea after a three-year hiatus due to the COVID-19 pandemic.

Asakawa who yesterday met Foreign Affairs Minister Ali Sabry who is leading the Sri Lankan delegation at Annual Meeting in South Korea, also said that the ADB is actively preparing for Budgetary support programs for Sri Lanka.

“For example, we are coordinating with the IMF and preparing a Special Policy Based Loan (SPBL) up to $ 350 million and we are also preparing a Policy Based Loan (PBL), a monetary loan to support reforms and finance. This include; banking, power, trade and investment, agriculture, urban development and water tourism and climate change,” he added. 

Last month the Cabinet of Ministers approved plans to obtain new financial and technical support from the Asian Development Bank (ADB) to aid the on-going recovery from the economic crisis.

The Government said parallel to the comprehensive funding facility approved by the IMF, the ADB has agreed to provide a special loan facility of $ 350 million based on policies and another loan grant of $ 1.5 million as technical assistance in order to strengthen the stability and administration.

As a key development partner, the ADB has worked closely with Sri Lanka since 1966. Sri Lanka is also a founding member of the ADB. To date, ADB has committed 482 public sector loans, grants, and technical assistance totalling $ 11.2 billion.

Drawing nearly 5,000 delegates, the 56th Annual Meeting of the ADB is hosted by the Government of the Republic of Korea. Themed ‘Rebounding Asia: Recover, Reconnect, and Reform’ the four-day meeting will discuss economic and development issues affecting Asia and the Pacific.