The International Monetary Fund asked cash-strapped Sri Lanka on Thursday to strengthen its anti-corruption agency and accelerate prosecutions after a review of a bailout that began in 2023.
The IMF said Sri Lanka’s reforms were paying off, but the South Asian nation should maintain the momentum amid the “heightened downside risks” posed by global trade uncertainties.
The Washington-based lender said it had concluded the fifth review of Sri Lanka’s economy since granting a $2.9 billion, four-year bailout loan in March 2023.
The island had suffered its worst economic meltdown the previous year that led to political turmoil.
Sri Lanka should be able to draw down the next tranche of $347 million once the IMF board approves an agreement reached in Colombo on Thursday.
IMF mission chief Evan Papageorgiou said Sri Lanka must increase staffing at the independent Commission to Investigate Allegations of Bribery or Corruption (CIABOC) to tackle a backlog of complaints.
“Recruitment at CIABOC should be accelerated and its independence safeguarded in line with the Anti-Corruption Act,” he said in a statement.
“Structural reforms will be key to lifting Sri Lanka’s potential growth.”
CIABOC has said it needs five times its current staff of 169 to effectively pursue politicians and handle high-profile corruption cases.
The leftist government of President Anura Kumara Dissanayake came to power a year ago on a pledge to tackle endemic corruption blamed for the unprecedented 2022 economic crisis.
Sri Lanka ran out of foreign exchange to finance even the most essential imports, such as food, fuel and medicines, leading to months of street protests that eventually toppled then-president Gotabaya Rajapaksa.
The IMF said it expected Sri Lanka’s growth to remain strong and noted that revenues had improved thanks to taxes on imported motor vehicles, which were allowed into the country in February after a five-year ban.
The World Bank announced two days ago that Sri Lanka’s recovery was “uneven and incomplete”, with many households yet to regain livelihoods lost during the 2022 crisis.
(AFP)
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