By Sri Lanka Fails to Meet IMF Commitments, Governance Reforms Stalled
According to the February update of Verité Research’s ‘IMF Tracker’, Sri Lanka has failed to fulfill 33% of the commitments due by the end of February 2024 under its International Monetary Fund (IMF) program. The report reveals that many of these unmet commitments, particularly those concerning governance improvements, have hindered the country’s progress.
Verité Research pointed out that several commitments related to transparency and the passage of governance-enhancing legislation were among those not met. These commitments are crucial for addressing governance issues identified by the IMF as central to Sri Lanka’s economic crisis. It’s worth noting that Sri Lanka is the first Asian country to undergo an IMF-led Governance Diagnostic Assessment, highlighting the significance of governance reforms in addressing economic challenges.
The report also highlights that 36% of the commitments’ status remains classified as ‘unknown’ due to insufficient data, further complicating the assessment of progress. Only 31% of commitments were verifiably ‘met’ by the end of February, indicating a significant shortfall in meeting program targets.
The second round of IMF program funding, received in December 2023, required Sri Lanka to fulfill 45 commitments by the end of February. However, Verité Research’s ‘IMF Tracker’ dashboard reveals that only 31% of these commitments were met, with 33% classified as not met and 36% as unknown.
Among the unmet commitments are critical legislative actions aimed at governance improvements, such as obtaining parliamentary approval for the Banking Act and establishing a debt management agency. Despite being included in the IMF staff-level agreement since September 2022, these measures have remained unaddressed, underscoring the challenges Sri Lanka faces in implementing essential reforms to improve governance and address economic issues.
