World Bank to Provide $600 Million to Assist Crash-Strapped Sri Lanka

A man waves a Sri Lankan national flag as he stands on a barricade blocking the entrance to president's office during a protest in Colombo, Sri Lanka, Monday, April 11, 2022. AP Photo/Eranga Jayawardena

The World Bank has agreed to provide Sri Lanka with $600 million in financial aid to help cover the cost of essential imports as the country’s economic crisis deepened, the Sri Lankan President’s Media Division said Tuesday.

The first tranche of $400 million would be released “shortly,” it stated, adding that the World Bank had expressed intention to continue helping Sri Lanka overcome its current economic crisis, local media Colombo Page reported.

Italy also stated Monday that it would make an “in-kind emergency contribution” of LKR125 million ($366,055) to Sri Lanka to assist with the procurement of medications and medical equipment.

According to the Italian Embassy in Colombo, the contribution will be channeled through the Italian Bilateral Emergency Fund at the World Health Organization and will allow payment to suppliers abroad directly.

“This emergency aid measure comes within the framework of the traditional strong partnership between Italy and Sri Lanka,” the embassy said in a statement.

“In the past, Italy has always been ready to support Sri Lanka whenever the country was in need, including in the aftermath of the 2004 tsunami,” it said, adding that Italy has also supported initiatives for Sri Lanka’s agriculture sector.

Sri Lanka is on the verge of bankruptcy, with its foreign exchange reserves plummeting by 70 percent in the past two years and $25 billion in foreign debt maturing in five years. The government said on April 12 that it was suspending foreign debt repayments.

To raise foreign currency, the government said Tuesday that it would allow foreigners who deposit a minimum of $100,000 in a commercial bank permission to live and work in Sri Lanka for 10 years under the “Golden Paradise Visa Program.”

It also approved the issuance of five-year residence visas to foreigners, including their spouses, who invest a minimum of $75,000 in Sri Lanka’s condominium properties.

Sri Lankans during a protest outside the president's office in Colombo, Sri Lanka, on April 11, 2022. Eranga Jayawardena/AP Photo

Thousands of Sri Lankans have taken to the streets in protest against the government’s mishandling of the country’s worst economic crisis in decades, while local doctors have reported a catastrophic scarcity of essential medicines in government hospitals.

The Sri Lanka Medical Association (SLMA) said on April 10 that doctors now have to choose which patients to treat as hospitals run out of essential medicines and medical equipment, AFP reported.

“If supplies are not restored within days, the casualties will be far worse than from the pandemic,” SLMA said, adding that all emergency surgeries may soon be suspended because of supply shortages.

On April 4, Human Rights Watch urged the International Monetary Fund (IMF) to ensure that its financial program with Sri Lanka protects “the human rights of low-income people and addresses corruption and entrenched obstacles to the rule of law.”

Sarah Saadoun, a senior researcher at Human Rights Watch, said the protests send “a clear message” about people’s economic situation in Sri Lanka.

“The IMF and the Sri Lankan government should come to an agreement that supports people’s ability to afford life necessities and addresses the problems underlying the current crisis,” Saadoun said in a statement.