Colombo Sri Lanka (Commonwealth Union)_The International Finance Corporation (IFC) reiterated its commitment in continuing support for Sri Lanka to emerge from the economic crisis by providing a cross-county swap facility of USD 400 million to three leading national banks. With these banks dealing with over 30 percent of Sri Lanka’s remittances and exports, this critical financing supports the uninterrupted supply of essential services primarily food, medicine and fertilizer, contributing to the country’s urgent need to stabilize the economy.
In an exclusive interview with the Commonwealth Union, Country Manager for IFC Sri Lanka and the Maldives Alejandro Alvarez de la Campa affirmed seeing positive signs in Sri Lanka with the appreciation of the currency, inflation reducing and remittances increasing. “The currency swap is a novelty product we designed as a result of the crisis because one of the issues has been the lack of liquidity of US dollars which impacted businesses and the import of essential goods. This transaction also goes beyond the financial sector because it will have an impact on the ‘real’ sector, while sending a positive signal to the markets and international investors who will hopefully decide to return and infuse capital into the country.”
President Ranil Wickremesinghe articulated a vision that with strong economic measures being implemented, by 2050 which would be Sri Lanka’s independence centenary, the country can become an export-oriented First World Economic model led by a vibrant private sector. The IFC focuses on private sector development in emerging markets on the premise that the private sector is the most critical growth engine of any economy.
Having already invested over USD 1 billion in critical sectors in the last four years including the financial sector, digitalization, telecommunication, tourism, manufacturing and agribusiness, IFC has also augmented its assistance with a technical assistance advisory programme focusing on gender, PPPs and inclusion.
“With crisis comes opportunity,” says de la Campa, “and our mandate is to support countries in developing their private sector. In this crisis, the private sector is absolutely critical.” He explains that the IFC’s priorities in the next few years is to support both the government and private sectors find the right path to sustainable economic growth.
“To do this, the IFC is focusing on a few areas; financial sustainability because a healthy financial sector is critical to economic growth, continue supporting the real sector including exports in agri-business, food and manufacturing which will be a nucleus for job creation, foreign exchange and liquidity, supporting the government in maximizing the modernization of public assets adding our global experience in PPPs while augmenting private sector participation in the economy and the development of sustainable infrastructure via renewable energy.”
The two cross cutting themes which will be overarching in all these will be climate and gender which the IFC has been working on extensively and are critical to its strategy of moving Sri Lanka forward.
