IMF warns reforms process in Sri Lanka falls short of timelines

“The mission encourages the Central Bank of Sri Lanka (CBSL) to remain vigilant in monitoring inflation pressures and stand ready to tighten monetary policy if inflation or credit growth does not abate. In light of mounting external pressures, the mission encourages the CBSL to take stronger actions towards rebuilding international reserves and maintaining exchange rate flexibility. In this regard, the mission and the authorities discussed IMF technical assistance to facilitate transition to flexible inflation targeting framework. The mission also encourages the government to accelerate implementation of structural reforms in public financial management and state owned enterprises (SOEs), building on the substantial technical assistance received so far. In this regard, finalizing and publishing Statements of Corporate Intents for large SOEs is the first necessary step for enhancing transparency and accountability in the reform process. The mission also supports the ongoing work to design reforms in the business environment and competitiveness which are supported by a number of development partners.”The mission met with Prime Minister Wickremesinghe, Finance Minister Karunanayake, Governor of the Central Bank of Sri Lanka Coomaraswamy, parliamentarians, other public officials, and representatives of the business community, civil society and international partners. (Colombo Gazette) “The mission made significant progress toward reaching a staff level agreement with the government on completion of the second review. Discussions will continue in April in Washington D.C. during the Spring Meetings of the IMF and World Bank. Overall, macroeconomic performance in the second half of 2016 was mixed with gradually recovering growth and an uptick in inflation due to the impact of drought and the VAT increase. The current account remained stable, but the financial account weakened with the resumption of capital outflows. A more prolonged drought could raise food and oil imports with adverse impact on growth, inflation, and the balance of payment,” Jaewoo Lee said. Lee said the mission commends the authorities for strong efforts in implementing their IMF-supported economic reform program with all fiscal quantitative targets through end-December being met. “Substantial progress has been made in stepping up revenue collections and automating revenue administration, which has been the basis for meeting fiscal targets. However, net international reserves fell short of the target and progress on implementing structural benchmarks was somewhat uneven with some of the reforms lagging behind intended timelines. Accordingly, the mission and the authorities have discussed decisive actions to maintain the reform momentum in light of uncertain external environment. To this end, it is important for the government to continue on the revenue based fiscal consolidation and generate adequate resources to support its social and development objectives while maintaining debt sustainability,” IMF said.The IMF noted that advancing the legislative process for the new Inland Revenue Act, with effective public consultations, is a critical step towards rebalancing the tax system toward a more predictable, efficient and equitable structure. The International Monetary Fund (IMF) has warned that progress on implementing structural benchmarks in Sri Lanka was somewhat uneven with some of the reforms lagging behind intended timelines.A staff team from the IMF led by Jaewoo Lee visited Colombo during February 21-March 7, 2017 to hold discussions on the second review of the Sri Lankan authorities’ economic program that is being supported by a three-year Extended Fund Facility (EFF). The program aims to support the authorities’ ambitious reform agenda to put public finances on a sustainable footing and create space for its social and development program. read more

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Ban urges international support to prevent relapse of horrific Central African Republic

The country has recently witnessed an upsurge in violence in the capital, Bangui, that has left more than 30 people dead and over 100 wounded and forced thousands to flee their homes in search of safety, following the murder of a young Muslim man last week. “As developments over the last days have demonstrated, the importance of international support, and the need to bridge religious and communal divisions and find common ground, has never been more critical,” Mr. Ban said at a high-level meeting on CAR, held on the margins of the General Assembly’s annual debate.“Major challenges remain, beyond the immediate security concerns. Rebuilding, reconciling and reforming a country that has been exposed to years of violent crises takes time. And the humanitarian needs remain significant,” he noted. Mr. Ban called on all parties to end the fighting and lay down their arms, stating that it is clear that the latest violence in Bangui is designed to destabilise the country and jeopardise the transition process. “We cannot allow forces to undermine achievements over the past year and deny the aspirations of the vast majority of Central Africans for peace and a better life,” he stressed.“All those who perpetrate or instigate crimes – including human rights violations – or incite violence must be held accountable. We must work together to ensure against a relapse of the horrific violence that tore the country apart. The United Nations will continue to provide steadfast support.” He recalled the way the international community came together two years ago and showed its commitment to end violence, protect civilians and find a sustainable solution. “One year ago, we encouraged broad-based dialogue, supported by regional and international partners. Local consultations culminated in the Bangui Forum on National Reconciliation. Central Africans agreed on the need for security sector reform, justice for those responsible for serious crimes, and the rebuilding of their State for social and economic recovery.” He cited progress on the political front, particularly the ongoing preparations for the elections later this year. “Today, we are here to express our firm support to a peaceful end of the Transition but also look beyond, and focus on priority actions identified during the Bangui Forum that can be achieved within 18 months or less,” he stated. “At the same time, we are mindful of the most pressing priority to fill the funding gap in support of the election process.” While thanking those that have already contributed, the Secretary-General noted that many programmes remain underfunded. “Without the resources to help address security and stabilization needs and ensure human rights for all, the country risks sliding back into protracted conflict and suffering,” he warned.“More than anything, Central Africans urgently need concrete reassurance that peace and stability in their country remain high on the international community’s agenda.“Today, I am calling on you to mobilize the necessary support for the speedy implementation of the outcomes of the Bangui Forum, the successful conclusion of the Transition, and the building blocks for long-term peace and development that the people of the Central African Republic demand and deserve.”President of the Transition Catherine Samba-Panza, who was in New York this week to address the General Assembly but was forced to return to Bangui amid the latest developments, addressed the meeting via video teleconference.She said that recent tragic events highlighted the numerous challenges that exist in the country, which is months away from the end of the transition period. The challenges basically have to do with implementing the recommendations of the Bangui Forum on National Reconciliation; the disarmament, demobilization and reintegration programme; and security sector reform. The Government estimates that the three priorities of disarming and demobilizing ex-combatants; promoting justice and reconciliation; and good governance and economic development, will cost $202 million over the next 18 months. Around $85 million remain unfunded.“The will of the Transitional Government is to give the new authorities that will emerge from the elections a country that can be governed and which is endowed with the necessary tools,” she stated. “The new government must be operational in the security area. This must be its top priority.” Stating that “your duty is to stand by us,” Ms. Samba-Panza called for concrete commitments from the country’s partners and donors “to help the people of the Central African Republic get out of the spiral of conflict and suffering that they have been victims of.” read more

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