Policy Defence

Sri Lanka’s top donors are waiting for the government to come up with a credible budget in November before talking about an economic programme to resume stalled programme loans to the country. Sri Lanka’s top donors are waiting for the government to come up with a credible budget in November before talking about an economic programme to resume stalled programme loans to the country. The IMF’s Poverty Reduction and Growth Facility (PRGF) which details the macro-reform agenda has been suspended for nearly a year, while the Marxist-backed government that came to power in April also threw out the World Bank’s Poverty Reduction Strategy Paper (PRSP).

Also known as the ‘Regaining Sri Lanka’ document, it was perceived as a product of the previous United National Front administration, in a nation where political rivalry routinely takes precedence over good sense.

Top donors say programme lending is unlikely to resume at least until the first quarter of 2005, but it may even be the second quarter before consensus is reached, based on at least an Interim PRSP document.

The Finance Ministry says project loans promised at the Tokyo donor conference, on the other hand are being negotiat