IMF bailout package uplifts pro-poor programmes; unlocks stalled projects

With the International Monetary Fund’s announcement of a US$ 3 billion bailout package for Sri Lanka sending positive signals to lending agencies and investors, hopes are high for a resumption of stalled projects and programmes that are expected to help vulnerable sections of society.

On Wednesday, President Ranil Wickremesinghe told Parliament that the establishment of a social security system for the most vulnerable sections of society would be prioritised.

This has also been recognised by the IMF. Article 7 of the IMF document states: “The authorities also launched the Food Security and Livelihood Restoration Emergency Assistance in August 2022 to improve access to food and protect livelihoods of the poor and vulnerable”.

The IMF document also says the Fund extends support for major “Social Safety Nets (SSN) programmes” such as Samurdhi cash transfers, support for the elderly, disabled people, and kidney patients, and the COVID-19 relief to mitigate the adverse impact of the economic crisis on the poor”.

When asked about these programmes, Transport and Highways and Media Minister Bandula Gunawardena said the Government was currently collecting statistics on poverty-stricken people.

The collection of data using electronic means would be completed by March 31 and the required money would be allocated accordingly, the minister said.

B. Wijayaratne, the chairman of the Welfare Benefit Board and Commissioner of the Food Security and Livelihood Restoration Emergency Assistance, described the ongoing SSN programmes as the structural benchmark of the IMF’s Extended Fund Facility programme.

Explaining the ongoing survey, he said the people are expected to give details such as education, health, economic situation, condition of the house, and the number of dependents. The data collection is being carried out by youth who possessed the minimum education qualification of the GCE Ordinary Level examination.

The data collected transparently and objectively would be entered into a computer system to identify the vulnerable people who require help. In case of an objection, it would be referred to a committee appointed by respective district secretaries, Mr Wijeratne said.

Social Empowerment State Minister Anupa Pasqual told the Sunday Times that the vulnerable sections of society would be the focus of all SSN programmes.

As regards the revival of stalled projects, Transport Minister Gunawardena said talks had already begun to resume the Integrated Road (iRoad) Investment Programme funded by the Asian Development Board.

Work on the stalled Central Expressway construction would be resumed soon as the ministry had completed talks with the ADB in this regard, he said.

The construction work on the abandoned Kohuwala flyover project had also begun after successful talks with the Hungarian Government.

Talks were being held to resume the Getambe flyover project also, the minister said.

Water Supply and Estate Infrastructure Development Ministry Secretary R.M.W.S. Samaradiwakara expressed confidence that they would be able to resume the Water Supply and Sanitation Improvement Project (WaSSIP) funded by the World Bank. The project involves building toilets and providing water supply to the estate sector.

The project was halted but now that the

IMF had sent a positive signal, talks could be restarted with the lending agency to revive it.

Urban Development Ministry Secretary W. S. Satyananda said the IMF facilities would provide a “cushion” for the Treasury to release funds allocated in the 2023 Budget for their projects.

However, their main problem was the price increases of building materials as they had swelled the bills the ministry had to pay contractors.

He said the ministry would make payments for the bills in instalments as and when the Treasury released the money. The bills to be paid amounted to a staggering Rs. 12 billion, and of this about Rs. 4 billion were to be paid by next month, the secretary said.

He also said the Ministry had signed an agreement for housing schemes in Colombo under a Chinese grant and he expected that the IMF would support the programme.

Most of these projects were stalled in keeping with the government’s instruction to scale down ministry expenses. Accordingly, several projects were terminated or stalled with the consent of funders, Mr Satyananda said. He added the IMF bailout package had now enabled them to resume the projects.

“Previously, we could only pay the salaries, pensions and other day-to-day expenses. Now we will be able to commit to projects as well,” he said.

Environment Ministry Secretary Dr Anil Jasinghe said he believed that with the IMF facility, it would now be easier for them to obtain local funds for their projects.

The projects include climate investment, carbon trading and introducing renewable energy. Further, they are also planning to expand eco-tourism and the “greening the economy” programme.

He said agreements were to be signed with several countries to obtain green technology and increase capacity building.

Previously, we could only pay the salaries, pensions and other day-today expenses. Now we will be able to commit to projects as well