Sri Lanka takes u-turn and decides to remain middle-income country
Sri Lanka yesterday, 11th October, made a U-turn on an earlier announcement and decided to remain as a middle-income country.
Cabinet spokesman Bandula Gunawardena had said earlier that the Cabinet of Ministers had granted approval for a proposal to downgrade Sri Lanka’s status from a middle-income country to a ‘low-income country.
The President’s Office said that Sri Lanka will seek eligibility for International Development Association (IDA) loans while remaining as a middle-income country.
And the announcement said that Sri Lanka no longer qualifies for International Bank for Reconstruction and Development (IBRD) loans due to a downgrade of the country’s credit rating.
With that move, the Cabinet approved a proposal on Monday – 10the October, to request the World Bank to grant the country eligibility to obtain loans offered by the International Development Association (IDA).
According to the President’s Media Division, “This is with the aim of obtaining concessionary funding from the International Development Association (IDA) — an arm of the World Bank that helps the world’s vulnerable countries. This facility is called “Gap”.
“Twelve countries including Indonesia have availed themselves of this facility when they were facing an economic downturn similar to Sri Lanka. The Government is pursuing a “reverse graduation” policy for a limited period of time.” by saying, the President’s media unit justifies this step taken by the government.
