SW News: Half a million jobs in industry and services have been lost in Sri Lanka. According to the World Bank's most recent study, "Sri Lanka Development Update 2022," the national poverty rate has increased by a factor of two to 25%. The rise in regional differences has been one of the results. In urban areas, poverty increased to 15%, while it exploded to 52% in rural areas.
This situation can be explained by a number of recent developments, chief among them being a trade regime that is restrictive, an unfavorable investment environment, and a negligent monetary policy, not to mention the COVID-19 pandemic.

In 2020, Sri Lanka lost access to the world's financial markets when its credit rating was cut. Its official reserves decreased as a result, going from $7.6 billion in 2019 to less than $500 million in December 2022.
In light of this, the World Bank has urged structural reforms that will boost development and debt restructuring, but these must be combined with initiatives to fight poverty.

According to experts, the current crisis is not a transient liquidity shock that can be alleviated by outside funding support. Instead, the crisis offers a rare chance to execute fundamental structural changes that could be challenging under normal conditions. Sri Lanka can take advantage of this chance to develop a robust and resilient economy.

On Tuesday, the Sri Lankan cabinet of ministers approved a proposal to begin negotiations with the World Bank in order to secure $200 million for social security programs. President Ranil Wickremesinghe had made the proposal in his capacity as the Finance Minister of the country.
As part of the 48-month Extended Fund Facility sponsored by the International Monetary Fund, Sri Lanka has promised to put in place a strong social security system to safeguard the most disadvantaged populations in the nation. The World Bank had already committed to lending $200 million to bolster social security programmes, and that the talks with the World Bank would be about finalizing the funds.

A proposal to give the finance ministry of Sri Lanka permission to pursue talks with the Asian Development Bank in search of a $350 million loan and an additional $1.5 million grant was also approved by the country's cabinet of ministers in April.