Sri Lanka’s Ministry of Digital Economy on Thursday (17) hosted a high‑level discussion with the World Bank Group on advancing the country’s digital transformation and modernising public sector systems.

Deputy Minister of Digital Economy Eranga Weeraratne met with a World Bank delegation led by Amy Doherty, Chief Information Officer and Senior Vice President of the World Bank Group. 

The talks focused on strengthening Digital Public Infrastructure (DPI), establishing integrated government communication systems, and supporting the local IT sector and innovation ecosystem.

Weeraratne underscored the importance of building technological capabilities and leadership skills among public officials through proposed Digital Transformation Units and the Public Impact Champions Network (PIC‑Net), aimed at enabling institutions to adopt digital technologies effectively.

Both sides also discussed the responsible adoption of Artificial Intelligence (AI) and emerging technologies, as well as enhancing cybersecurity readiness through Sri Lanka CERT and the National Cyber Security Operations Centre.

Doherty, drawing on her global experience in enterprise technology and cybersecurity, shared insights from her engagement with young entrepreneurs at TRACE City, highlighting the role of private‑sector innovation in Sri Lanka’s digital journey. (Newswire)

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A high‑level discussion was held this morning at the Presidential Secretariat between a World Bank delegation led by Gevorg Sargsyan, Country Manager for Sri Lanka and the Maldives, and Prabath Chandrakeerthi, Chief of Staff to the President, on the project to develop Colombo Fort as a tourist zone under World Bank loans and assistance.

The talks also reviewed matters raised during a previous meeting chaired by President Anura Kumara Dissanayake, which focused on developing Colombo Fort as a tourist hub while preserving its historical heritage.

World Bank representatives said they were prepared to extend support not only for tourism but also for achieving national targets in agriculture, ports and supply services, and energy.

Attention was further drawn to the potential contribution towards the Colombo Fort project, the promotion of nature‑based tourism, and the development of tourism in the Northern and Eastern provinces.

The meeting was also attended by Stephan Massing, Senior Operations Officer of the World Bank unit for Sri Lanka and the Maldives, and Asela Dissanayake, Senior Operations Officer of the World Bank delegation. (Newswire)

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The World Bank’s Board of Executive Directors has approved US$150 million in financing to support Sri Lanka’s reform agenda aimed at boosting investment, strengthening competitiveness, and creating jobs.

The Sri Lanka Reforms for Growth, Resilience and Openness Development Policy Operation (REGROW DPO) is the first in a proposed series of three operations and builds on the earlier support under the Resilience, Stability and Economic Turnaround (RESET) DPO series, shifting focus from stabilization to supporting long-term growth. 

The REGROW series supports the government’s efforts to strengthen economic governance and competitiveness, key to unlocking private sector-led growth and job creation.

The first operation provides budget support anchored in reforms to reduce trade barriers, improve the investment climate, strengthen the financial sector. It also supports measures to expand women’s employment, improve the performance and governance of state-owned enterprises (SOEs), and enhance power sector competitiveness to deliver better services and lower energy costs.

“Sri Lanka has made significant progress in stabilizing its economy, and now it is critical to advance reforms that can unlock private investment, facilitate high value export and create jobs,” said Gevorg Sargsyan, World Bank Group Country Manager for Sri Lanka. “The REGROW DPO supports the transition to a more competitive, transparent, and resilient economy – one that can deliver sustainable and inclusive growth for all Sri Lankans.”

The World Bank Group is committed to helping countries generate more and better jobs as a pathway to reducing poverty and expanding economic opportunities. In Sri Lanka, it has partnered with the country for over 70 years and currently supports 13 active projects totaling more than $1.5 billion across key sectors, including education, health, energy, transport, agriculture, and social protection. IFC, its private sector arm, has committed nearly $1.8 billion in long- and short-term financing to Sri Lanka’s private sector between 2021 and 2026. (Newswire)

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Sri Lanka’s Ministry of Industry on Monday (09 Feb) hosted the third round of talks with World Bank representatives Richard Walker and Anna Twum on the country’s upcoming tariff reform. 

Deputy Minister of Industries and Entrepreneurship Development Chathuranga Abeysinghe said the new policy, set for 2026, will remove para‑tariffs such as Cess and PAL and introduce a streamlined four‑tier import tariff framework.

“Sri Lanka is preparing for the largest and most decisive shift in its economic transformation, with a new tariff policy set to be implemented in 2026 to better integrate our economy into global value chains. Under this reform, para-tariffs such as Cess and PAL will be removed, and the country will transition to a new import tariff framework consisting of four main categories,” he said in a post on ‘X’. 

He further said that during the discussions with the World Bank representatives, who are providing technical assistance to Sri Lanka for this reform, the Ministry of Industry emphasized the need for strong institutional involvement in driving these critical transformational changes, the importance of implementing them gradually within a defined timeline, the establishment of national standards for imported goods, and the necessity of prohibiting the import of under-invoiced and low-quality products.

This new tariff policy is considered a fundamental prerequisite for enhancing Sri Lanka’s competitiveness in the export sector and for enabling the country to enter into international trade agreements, he noted. (Newswire)

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Growth in Sri Lanka is expected to decelerate to 3.5 per cent in 2026 and 3.1 per cent in 2027, according to the World Bank’s Global Economic Outlook 2026.

The report cites reflecting structural impediments to growth, including factor and product market inefficiencies, the scarring effects of the economic crisis, and global economic uncertainty, hurting demand for exports.

The report further states that current account deficits in the region are projected to remain moderate, but in contrast, Sri Lanka is forecast to run current account surpluses, primarily reflecting lower global oil prices and resilient remittance inflows, particularly from member countries of the Gulf Cooperation Council, where activity is anticipated to remain robust.

Poverty is expected to decline in the region over the forecast horizon, supported by steady per capita income growth amid slowing population growth, moderate inflationary pressures, and solid remittance inflows.

In several economies, including Sri Lanka, emigration pressures are projected to remain heightened, especially among the young and highly skilled population.

Risks to the regional outlook are tilted to the downside, the report states, pointing out that a further rise in tariffs or other trade restrictions, or heightened uncertainty about global trade policies, could dampen export demand and economic activity in the region.

Although openness to global trade is relatively limited in the region’s economies, the risk is higher in those with larger exposure to the United States, including Bangladesh and Sri Lanka, than in other regional economies.

Increases in tariffs, including through the removal of exemptions relating, for example, to electronics, or extensions to services, could directly weaken growth, it added.

Full report: https://documents1.worldbank.org/curated/en/099710001132613726/pdf/IDU-56669726-de15-4ce7-9acc-19c4c9dbd25e.pdf (Newswire)

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Sri Lanka has moved to activate emergency response components within ongoing World Bank–financed projects to accelerate post-disaster recovery following the widespread destruction caused by Cyclone Ditwah, the government said.

Severe flooding and landslides triggered by the cyclone resulted in extensive damage to agricultural land, critical infrastructure, public facilities and livelihoods, while also causing deaths and mass displacement of communities. 

Officials said the scale of the disaster has made it necessary to prioritise rapid rebuilding and shift from immediate emergency response to longer-term recovery planning.

The Cabinet of Ministers has therefore approved a proposal by the President, in his capacity as Minister of Finance, to activate emergency response elements already built into existing foreign-funded investment projects and to obtain between USD 92 million and USD 112 million from the World Bank Cluster to finance the effort.

Separately, Sri Lanka will receive a USD 3 million grant from the Asia Pacific Disaster Response Fund of the Asian Development Bank to support relief and rehabilitation activities for communities affected by Cyclone Ditwah. 

The Cabinet approved the proposal to enter into the required agreements with the ADB to secure the grant, which will help provide essential materials and life-security services in the aftermath of the disaster. (Newswire)

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Senior officials of the World Bank and the StAR institution, which operates under the United Nations Office on Drugs and Crime, have expressed agreement to provide the necessary technical and expert assistance for the process of re‑assigning assets existing in foreign countries that are considered to have been earned through crime. 

A special discussion on this matter was held last afternoon (02) at the Ministry of Justice and National Integration, under the patronage of Minister of Justice Harshana Nanayakkara.

The World Bank and the StAR institution under the United Nations Office on Drugs and Crime have expressed agreement to provide the necessary support to the Commission to Investigate Allegations of Bribery or Corruption, the Ministry of Justice and National Integration, the Police Division for the Recovery of Proceeds of Crime, the Attorney General’s Department, the Police Department, and the Financial Intelligence Unit, for the process of re‑assigning assets produced by crime.

Senior Economic Specialist of the StAR Initiative, Laura Pop, Secretary of the Ministry of Justice and National Integration, President’s Counsel Ayesha Jinasena, Director General of the Commission to Investigate Allegations of Bribery or Corruption, High Court Judge Ranga Dissanayake, World Bank Specialist on Governance in Sri Lanka Till Hartmann, StAR Initiative Advisor Dmytro Kotlyar, StAR Initiative Specialist Karen Greenaway, and senior officials of the Ministry of Justice participated in this discussion. (Newswire)

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President Anura Kumara Dissanayake says the government has begun discussions with the World Bank to prepare a detailed assessment of the damage caused across sectors due to adverse weather and the financial requirements for reconstruction. 

The President revealed that the World Bank has already been commissioned to conduct the Global Rapid Post-Disaster Damage Estimation (GRADE) and that the government expects to receive the GRADE assessment within approximately two weeks.

He further said that the government has decided to initiate a medium and long term recovery programme, integrating both the public and private sectors, to mobilize resources for rebuilding the country’s essential infrastructure such as highways and irrigation systems damaged by the recent disaster.

Accordingly, President Anura Kumara Dissanayake stated that it is intended to establish a fund with contributions from all sectors and to appoint a Joint Management Committee, comprising both public and private sector representatives, with Cabinet approval, to oversee the management of the fund.

Highlighting the extent of the devastation caused by floods and landslides, the President noted that the damage is far greater than what is visible on the surface. He emphasized that the Treasury alone cannot bear the full financial burden of recovery.

President Dissanayake further noted that funds for reconstruction could be mobilized through multiple channels, including local contributions, the Sri Lankan expatriates, foreign governments, international organizations and business associations. The coordination and management of these efforts will primarily be entrusted to the appointed committee.

He further pointed out that houses, farmlands, plantations, highways, bridges, government buildings, schools and even electricity poles have been destroyed as a result of the disaster. Landslides have caused extensive damage to road networks, which will require major rehabilitation, the President added. 

President Anura Kumara Dissanayake made these remarks during a meeting held last night (30) at the Presidential Secretariat with a group of private sector investors. (Newswire)

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Minister Samantha Vidyarathna named several individuals and companies that allegedly received funds allocated for entrepreneurs under a World Bank loan program during what he called were previous “green” and “blue” governments.

Speaking in Parliament, Vidyarathna said the project was intended to support agriculture sector development, with a portion earmarked for entrepreneurs and industry-related initiatives.

“This list is long, so I’ll name a few,” he said.

Among those named was a company reportedly linked to Anoma Gamage, wife of former Minister Daya Gamage, which received Rs. 14.95 million. “There is no company and no repayment,” the minister alleged.

Vidyarathna also claimed that the son of former Ministry Secretary Bandula Wickramarachchi, who served under Minister Daya Gamage, received Rs. 8.2 million.

Asahi Construction Pvt. Ltd., said to be owned by the wife of former Minister Roshan Ranasinghe, received Rs. 18 million. Former Navy Commander Wasantha Karannagoda was also listed as having received Rs. 18 million.

A company linked to the son of former Minister Lakshman Senevirathna received Rs. 37.5 million, while another company reportedly connected to the brother of former Minister Mahinda Amaraweera received Rs. 48.1 million, according to the minister.

Vidyarathna noted that in June 2025, a Cabinet paper was submitted seeking Treasury funds to repay the amount owed to the World Bank.

He also criticized opposition lawmakers, saying, “The ones who took state money are now questioning why the government is giving a Rs. 200 incentive to estate workers.” (Newswire)

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The World Bank’s Vice President for South Asia, Johannes Zutt, concluded his first official visit to Sri Lanka yesterday.

During his two-day visit, he met with President Anura Kumara Dissanayake, Central Bank Governor Dr. Nandalal Weerasinghe, Secretary to the Treasury Dr. Harshana Suriyapperuma, and other senior officials.

The visit built on World Bank Group (WBG) President Ajay Banga’s visit in May, when the Bank pledged over US$1 billion in financing for the country over the next three years. 

Since then, the WBG and Sri Lanka have partnered on two programs: a renewable energy program targeting 1 GW with private investment (US$150 million) and an agriculture project (US$100 million). 

Additional operations are planned over the next 12 months in tourism, regional development with a focus on the Northern and Eastern provinces, digital development, and ports and logistics.

In their discussions, Zutt commended President Dissanayake for Sri Lanka’s hard-won economic stabilization and committed to continue supporting the government in implementing reforms that create jobs, attract private investment, and modernize key sectors. 

“It was a privilege to visit Sri Lanka and meet with President Dissanayake to learn about his government’s vision for growth,” Zutt said. “The groundwork for recovery has been laid. Now is the time to focus on jobs, investment, and inclusive development. The World Bank Group is ready to support Sri Lanka in this journey, prioritizing mobilization of private capital and attracting foreign direct investment to expand services and create jobs.”

With nearly one million young people expected to enter Sri Lanka’s workforce over the next decade, but only 300,000 new jobs projected, Zutt stressed that unlocking private sector growth for job creation will be essential. 

The World Bank Group assures that it will continue working in partnership with the government to attract private capital, strengthen competitiveness, and expand service delivery and job opportunities across the country. (Newswire)

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The World Bank Group says Sri Lanka’s fiscal adjustment, nearly 8 per cent of gross domestic product (GDP) since 2021, has been exceptionally large by both historical and international standards. 

Releasing its latest report titled ‘Sri Lanka Public Finance Review: Towards a Balanced Fiscal Adjustment’, the World Bank said Sri Lanka has been critical in stabilizing the economy, reducing fiscal imbalances, and restoring macroeconomic stability. 

With macroeconomic stability largely restored, Sri Lanka can now consider a more balanced fiscal strategy. The sharp fiscal adjustment adversely impacted households through higher indirect taxes and substantially lower real public sector wages and contributed to slower economic growth due to the decline in public investment. 

Given various combinations of primary balance and real GDP growth that achieve key debt targets, Sri Lanka can consider carefully recalibrating fiscal policy to manage the trade-offs between stronger fiscal buffers and growth, equity, and sustainability, it said. 

According to the World Bank Group, this public finance review (PFR) analyzes how to make Sri Lanka’s ongoing fiscal adjustment more sustainable, equitable, and growth-friendly. 

The PFR finds that this balance can be achieved as Sri Lanka can (i) raise an additional 1.5-2.0 per cent of GDP in revenue by 2029 without hurting equity and growth, and (ii) improve efficiency and equity of spending within the current spending envelope, since further spending cuts or increases are not feasible. 

On the revenue side, this will entail increasing reliance on direct taxes, modernizing and digitizing tax administration, and improving tax morale; and on the expenditure side, improving wage bill management, reorienting capital spending towards infrastructure gaps, and improving targeting of social assistance. 

The report identifies three core areas for reform for sustainable and equitable revenue mobilization: (i) increasing reliance on direct taxes, (ii) modernizing and digitizing tax administration, and (iii) focusing on taxpayer engagement to improve tax morale.

Following is the full report of the World Bank; https://openknowledge.worldbank.org/server/api/core/bitstreams/1a1c9063-09b1-40e3-aa30-27d1e7e606a8/content (Newswire)

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The Government of Sri Lanka and the World Bank Group have entered into a new US$100 million partnership aimed at strengthening rural livelihoods, creating jobs, and building climate resilience in the agri-food sector.

More than 380,000 people across Sri Lanka are set to benefit from the Integrated “Rurban” (Rural and Urban) Development and Climate Resilience Project. 

The project will directly support 8,000 agri-food producers, improve irrigation and drainage services on 71,000 hectares of land, and help smallholder farmers adopt modern, climate-smart agricultural practices that increase harvests and reduce losses.

It also aims to generate new jobs in rural areas, particularly for youth and women, by strengthening agribusiness value chains and expanding market access.

“The National Policy Framework of the Government, ‘A Thriving Nation – A Beautiful Life’ has given utmost priority in attaining sustainable economic growth and development through a robust production economy,” said Dr. Harshana Suriyapperuma, Secretary to the Treasury and the Ministry of Finance, Planning and Economic Development. “This project financed by the World Bank, one of Sri Lanka’s prominent development partners, will complement the Government’s vision through enhancing agricultural productivity, stimulating rural development, and contribute towards safeguarding food security.”

Smallholder farmers, who produce 80% of Sri Lanka’s food, are at the center of this initiative. As climate change leads to more unpredictable rainfall, rising temperatures, and extreme weather events like floods and droughts, the project will focus on upgrading irrigation systems to help farmers manage water more effectively. It will also promote the use of modern technologies to boost crop yields and reduce losses, expand access to crop insurance, and invest in climate-resilient infrastructure to help farmers better cope with climate-related challenges.

It will also upgrade agriculture data systems and improve food safety standards to help farmers compete in global markets and unlock export opportunities.

“This project is about people, government, and the private sector working together to make real improvements on the ground,” said David Sislen, World Bank Division Director for the Maldives, Nepal and Sri Lanka. “By combining climate-smart farming with access to markets and private finance, we are not just helping farmers adapt to climate change—we’re helping them succeed in spite of it.”

The project also aims to attract up to US$17 million in private investment by linking farmers to financial institutions, unlocking loans for agribusinesses, and creating new income opportunities in processing, storage, logistics, and marketing.

The project builds on over a decade of World Bank Group support to Sri Lanka’s agriculture sector. Past projects led to the creation of 141 farmer organizations and farmer-owned businesses, boosting average farmer sales by 44%. The International Finance Corporation (IFC), the World Bank Group’s private sector arm, has also helped strengthen key export industries like cinnamon and coconut with technical expertise, financial tools, and digital support for small and medium-sized enterprises.

Aligned with Sri Lanka’s national development goals and the World Bank Group’s Country Partnership Framework, the project reflects a shared commitment to build a stronger, more inclusive, and climate-resilient rural economy. (Newswire)

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The Chairman of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) of Sri Lanka, Justice Neil Iddawala, today met with Laura Pop, Neha Maryam Zaigham, and Emile van der Does de Willebois of the World Bank. 

The meeting took place at the UN Secretariat in Vienna, on the sidelines of the Second Resumed Sixteenth Session of the Implementation Review Group of UNCAC, which is currently in progress in Vienna.

According to the Embassy and Permanent Mission of Sri Lanka in Vienna, CIABOC Chairman, Justice Neil Iddawela is leading the Sri Lanka delegation to this session. 

The discussions with the World Bank officials focused on the effective implementation of Sri Lanka’s Proceeds of Crime Act No. 5 of 2025 (POCA), a landmark piece of legislation providing for the tracing, freezing, confiscation, management, and disposal of proceeds of crime, including corruption. 

The World Bank expressed its willingness to explore avenues of technical assistance to support the practical enforcement of POCA provisions. 

Sri Lanka has previously benefited from World Bank support through the Stolen Asset Recovery (StAR) Initiative, including assistance in developing the legal framework on asset declarations, drafting terms of reference for the electronic assets declaration system, expertise sharing at UNODC workshops, and technical assistance for the development of the Proceeds of Crime Policy. 

Looking ahead, the CIABOC and the World Bank discussed possible areas of cooperation, including capacity building for investigators and prosecutors, technical tools for asset tracing and management, guidance on electronic platforms, and a long-term partnership to institutionalize asset recovery mechanisms.

This engagement reaffirms Sri Lanka’s commitment to international cooperation in asset recovery and the fight against corruption, while leveraging global expertise to ensure that illicit gains are returned to the people. (Newswire)

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The World Bank has appointed Johannes Zutt as the new Vice President for the South Asia Region, succeeding Martin Raiser. His appointment is effective from July 1, 2025.

According to the World Bank Group, as the regional Vice President for South Asia, Zutt will manage World Bank relations with Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka, and oversee a portfolio of projects, technical assistance and financial resources worth $39 billion.

Under Zutt’s leadership, the World Bank will continue to support the South Asia region to address job creation, climate and disaster resilience, human capital development and private capital mobilization.

A Dutch national, Zutt joined the World Bank in 1999 and has taken positions of increasing responsibility. He has most recently served as the World Bank’s Country Director for Brazil. Before this, he was the Director for Strategy, Results, Risk and Learning in the Operational Policy and Country Services (OPCS) Vice Presidency. He has also served as Country Director for Bangladesh, Bhutan and Nepal, as well as for Türkiye, Comoros, Eritrea, Kenya, Rwanda, Seychelles and Somalia.

“I am delighted to see the strong development progress that South Asia has achieved in the 10 years since I last worked in the region,” said Zutt. “I look forward to this new opportunity to contribute and to once again experience the warmth of the region’s people and the richness of its cultures.” 

Zutt has a B.A. and M.A. in Philosophy from the University of Toronto, a Law degree from Harvard University, and a Doctorate in Philosophy from the University of Oxford.

He will be based in New Delhi, India, which will serve as the new regional hub for the South Asia region, in line with the World Bank’s decentralization to be closer to clients and enhance service delivery. (Newswire)

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Heightened trade tensions and policy uncertainty are expected to drive global growth down this year to its slowest pace since 2008 outside of outright global recessions, according to the World Bank’s latest Global Economic Prospects report. 

The World Bank Group says the turmoil has resulted in growth forecasts being cut in nearly 70% of all economies, across all regions and income groups.

Global growth is projected to slow to 2.3 per cent in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year. A global recession is not expected. Nevertheless, if forecasts for the next two years materialize, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s.

“Outside of Asia, the developing world is becoming a development-free zone. said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades—from 6 per cent annually in the 2000s to 5 per cent in the 2010s—to less than 4 per cent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 per cent in the 2000s to about 4.5 per cent in the 2010s, to less than 3 per cent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.”

Growth is expected to slow in nearly 60 per cent of all developing economies this year, averaging 3.8 per cent in 2025 before edging up to an average of 3.9 per cent over 2026 and 2027. That is more than a percentage point lower than the average of the 2010s. Low-income countries are expected to grow 5.3 per cent this year—a downgrade of 0.4 percentage point from the forecast at the start of 2025. Tariff increases and tight labour markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 per cent in 2025, remains above pre-pandemic levels.

Slowing growth will impede developing economies in their efforts to spur job creation, reduce extreme poverty, and close per capita income gaps with advanced economies. Per capita income growth in developing economies is projected to be 2.9 per cent in 2025, 1.1 percentage points below the average between 2000 and 2019. Assuming developing economies other than China are able to sustain an overall GDP growth of 4 per cent—the rate forecast for 2027—it would take them about two decades to return to their pre-pandemic trajectory with respect to economic output.

Global growth could rebound faster than expected if major economies are able to mitigate trade tensions, which would reduce overall policy uncertainty and financial volatility. The analysis finds that if today’s trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 percentage points stronger on average over the course of 2025 and 2026.

“Emerging-market and developing economies reaped the rewards of trade integration but now find themselves on the frontlines of a global trade conflict,” said M. Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. “The smartest way to respond is to redouble efforts on integration with new partners, advance pro-growth reforms, and shore up fiscal resilience to weather the storm. With trade barriers rising and uncertainty mounting, renewed global dialogue and cooperation can chart a more stable and prosperous path forward.”

The report argues that in the face of rising trade barriers, developing economies should seek to liberalize more broadly by pursuing strategic trade and investment partnerships with other economies and diversifying trade—including through regional agreements. Given limited government resources and rising development needs, policymakers should focus on mobilizing domestic revenues, prioritizing fiscal spending for the most vulnerable households, and strengthening fiscal frameworks.

Finally, to accelerate economic growth, countries will need to improve business climates and promote productive employment by equipping workers with the necessary skills and creating the conditions for labour markets to efficiently match workers and firms. Global collaboration will be crucial in supporting the most vulnerable developing economies, including through multilateral interventions, concessional financing, and, for countries embroiled in active conflicts, emergency relief and support. 

Full report: https://www.worldbank.org/en/publication/global-economic-prospects (Newswire)

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South Asia is facing a sharp rise in extreme weather, with nearly 90 per cent of the population expected to be exposed to intense heat and more than one in five people at risk of severe flooding by 2030, according to a new World Bank report.

The report, which lays out policy reforms that would help households and firms adapt to increasingly frequent and damaging weather events, further states that with public budgets under pressure, much of the adaptation effort will need to come from the private sector. 

Released today, From Risk to Resilience: Helping People and Firms Adapt in South Asia, finds that awareness of climate risk is high. More than 60 per cent of households and firms have experienced extreme weather in the last five years, and more than 75 per cent expect it for the next decade. Many households and businesses are already taking steps to adapt to climate risks. Around 80 per cent of households and 63 per cent of firms have taken some measures to adapt. However, most of these measures are basic, such as raising house foundations or installing fans. More advanced options, like using climate-resilient seeds or relocating from high-risk areas, remain less common.

“The urgency is growing. People and firms are already adapting, but they are doing so with limited tools and few resources,” said Martin Raiser, World Bank Vice President for South Asia. “Governments must act quickly to remove the barriers that prevent more effective adaptation. This includes removing distortions in land and labour markets, expanding access to finance and investing in public infrastructure to support people and businesses as they respond to climate risks.”

The report finds that market barriers and income constraints are holding back stronger adaptation. Households with more education or access to formal finance are more likely to adopt advanced strategies. Similarly, better-managed firms with fewer regulatory barriers tend to be more adaptive. Removing these barriers would enable more effective adaptation by households and firms.

“Private sector adaptation could reduce one-third of the region’s projected climate damage, but this requires governments to strengthen enabling environments,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia. “Adaptation is most effective when markets function well and when essential services like transport, water, healthcare, and digital connectivity are widely accessible.”

The report calls for both targeted adaptation efforts and broader development measures that also build climate resilience. Governments have a critical role to play, even with limited fiscal space. They can expand access to localised climate information, promote weather-indexed insurance, and support the use of resilient technologies such as energy-efficient cooling systems. Public investments in infrastructure that keep people safe and connected, such as roads, drainage, power supply, and mobile networks, are also essential.

In Bangladesh, investments in early warning systems and cyclone shelters have helped reduce fatalities during major storms. In India, cities like Ahmedabad are leading with heat action plans to protect urban populations from rising temperatures. They demonstrate how targeted investments and effective institutions can help scale up local adaptation successfully.

The report calls for policy action guided by three core principles. First, implement a comprehensive package of adaptation measures. Second, prioritize solutions that support both development and climate resilience. Third, align adaptation strategies with long-term development goals to ensure lasting progress. Governments in South Asia can best build resilience by creating the conditions that empower households and firms to adapt. (Newswire)

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In a significant step towards enhancing digital resilience and national service continuity, the Government of the Maldives has entered into a strategic agreement with KBSL Information Technologies Limited, a top tier Sri Lankan IT solutions provider operating under the Agility Innovations Group, to design and implement a national-level Business Continuity and Disaster Recovery (BCDR) Plan. Agility Innovation Group’s involvement signals a coordinated regional approach to delivering future-proof digital infrastructure. Through its subsidiaries and partners, the Group has consistently enabled public and private sector clients to modernize mission-critical systems while ensuring operational continuity in complex environments.

The initiative is being carried out in partnership with KBSL’s joint venture collaborators, Nextbizz and Valiant Technologies India, combining regional expertise in infrastructure planning, cybersecurity, and risk management. This high impact engagement is a flagship component of the World Bank funded Digital Maldives for Adaptation, Decentralization, and Diversification (DMED) program, underscoring the Maldives’ commitment to safeguarding its critical digital infrastructure.

The BCDR project will be developed for the National Centre for Information Technology (NCIT), the primary body overseeing the country’s digital transformation efforts. Once completed, the plan will ensure that vital public services and digital systems remain operational during national emergencies or cyber disruptions a milestone in the Maldives’ pursuit of technological sovereignty and disaster readiness.

The agreement was officially signed by:

Dr. Mohamed Kinaanath, Minister of State for Homeland Security & Technology and Head of NCIT, the National Cybersecurity Agency, and the Communication Authority of Maldives. A decorated national technologist, Dr. Kinaanath plays a pivotal role in shaping the nation’s digital security architecture.

Ibrahim Waheed, Digital Development Strategist, Project Manager of the DMED Program, and Chair of its Steering Committee, who is instrumental in aligning the project with the Maldives’ broader digital transformation agenda.

Representing the KBSL led consortium at the signing and project launch were:

• Krishan Perera, Assistant Vice President – International Business, KBSL
• Winu Peththawadu, Account Manager – International Business, KBSL
• Sahan Weerasekara, Lead Consultant and BCDR Expert, KBSL
• Ganesh Kandasamy, Consultant and Representative from Valiant Technologies India

“”We are honored to partner with the Government of the Maldives in this pioneering endeavor,” said Krishan Perera, AVP – International Business at KBSL. “Together with our JV partners – Nextbizz and Valiant Technologies India – and under the Agility Innovations Group umbrella, we are proud to strengthen the country’s digital foundations as part of the ambitious #DigitalMaldives vision.”

This engagement adds to Agility Innovations Group’s growing portfolio of initiatives that strengthen digital resilience in emerging economies. From strategic planning to operational delivery, the Group fosters collaboration across borders to build robust technology ecosystems capable of withstanding disruptions and enabling long-term service delivery.

The project marks another milestone in regional cooperation in digital security, reinforcing South Asia’s collective momentum toward resilient, secure, and adaptive digital ecosystems. With the DMED program serving as the catalyst, the Maldives is positioning itself as a leader in proactive digital governance among island nations.

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A discussion was held between Western Province Governor Hanif Yusoof and World Bank representatives today (23 Apr), during which four key tourism projects were finalized. 

According to the Western Province Governor’s Office, the four key tourism projects are as follows;

1) Restoration of Colombo’s Colonial Heritage – Revitalizing historic buildings and tramway systems to create a cultural tourism hub.

2) River Cruise Along the Bentara River to Yagirala Rainforest – A 40-kilometer eco-tourism experience connecting river tourism with forest conservation.

3) Developing the Negombo Lagoon and Muthurajawela Wetlands  – Creating a nature-focused tourism corridor with environmental safeguards

4) Wreck Diving in Colombo – Developing shipwreck sites to attract high-value diving tourism while supporting marine conservation.

The Western Province Governor’s Office further said that the initiatives aim to drive sustainable tourism growth in the Western Province through a blend of history, culture, and biodiversity. 

It was also revealed that the next steps include establishing a joint working group, conducting feasibility assessments, and forming public-private partnerships. 

A heritage site walk-through in Colombo will soon be held to identify locations with historical importance, the Western Province Governor’s Office added. (Newswire)

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The Secretary to the Prime Minister, Pradeep Saputhanthri has expressed the Sri Lankan Government’s commitment to meeting the forthcoming Extended Fund Facility (EFF) review milestones while participating in the World Bank Group’s Global Digital Summit 2025.

According to the Prime Minister’s Office, Pradeep Saputhanthri attended the event held from 17-20 March at the World Bank headquarters in Washington, D.C. 

Under the theme “Digital Pathways for All,” the summit brought together global authorities, development partners, private sector leaders, and key stakeholders to explore innovative digital solutions and their role in advancing economic and social development.

The summit provided valuable insights into Sri Lanka’s ongoing digitalization initiatives, which are being spearheaded under the leadership of the President, Anura Kumara Dissanayake. During the high-level discussions, Saputhanthri engaged with global experts to examine emerging digital technologies and strategies that can drive inclusive and sustainable digital transformation in Sri Lanka.

On the sidelines of the Global Digital Summit, Saputhanthri held discussions with key officials from the International Monetary Fund (IMF) and the World Bank. He met with Mr. Kenji Okamura, Deputy Managing Director of the IMF, Dr. Krishnamoorthy Subramanian, Executive Director of the IMF, Dr. Krishna Srinivasan, Director of the Asia and Pacific Department of the IMF, and Dr. PKG Harischandra, Alternate Executive Director at the IMF.

During these meetings, Saputhanthri provided an update on the progress of Sri Lanka’s Extended Fund Facility (EFF) and expressed appreciation for the continued support of the IMF Executive Board, Senior Management, and Staff following the successful completion of the Third Review under the EFF in February 2025. He reaffirmed the Government of Sri Lanka’s commitment to meeting the forthcoming EFF review milestones. Discussions also covered the government’s ongoing digitalization efforts, aimed at supporting vulnerable communities, improving tax system efficiency, and enhancing overall economic productivity.

Saputhanthri also held a meeting with Mr. Martin Raiser, Vice President for the South Asia Region at the World Bank, to convey appreciation for the World Bank’s extensive support to Sri Lanka. Mr. Raiser reaffirmed the World Bank’s steadfast commitment to assisting Sri Lanka’s economic recovery and development. The discussions focused on future collaborations to ensure continued financial and technical support for the country’s long-term stability and growth. (Newswire)

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Earlier this month, the World Bank (WB) board approved a USD 20 billion loan package for Pakistan. Nonetheless, the framework document indicated that there would be significant challenges to its successful implementation due to political divisions and a deteriorating security situation in the two provinces – Balochistan and Khyber Pakhtunkhwa.

While Pakistan has celebrated the new loan package, many commentators suggest that its implementation may fail. The World Bank has already identified nine risks associated with the USD 20 billion loan facility for Pakistan under the 10-year Country Partnership Framework (CPF), recognizing six of these risks as substantial, including political, governance, and macroeconomic vulnerabilities.

Notably, Pakistan’s struggling economy took a hit last month as the World Bank canceled a USD 500 million loan for a clean energy program. Originally intended to support sustainable energy initiatives, the loan was revoked after Pakistan failed to meet key conditions tied to the agreement, including revisions to power purchase agreements under the China-Pakistan Economic Corridor (CPEC).

Similarly, in November 2024, the International Monetary Fund (IMF) highlighted Pakistan’s tax shortfall and delays in securing foreign loans, among other issues, as challenges in implementing the three-year USD 7 billion program approved in July. Given Pakistan’s poor track record of fulfilling the conditions of various loan packages, there is a consensus that the new World Bank loan will likely encounter delays, revisions, or possible cancellation in the coming months.

In its recent findings, the World Bank noted its experiences from previous Country Partnership Frameworks (CPF) for Pakistan covering the period from 2015 to 2024. It acknowledged that resources should be strategically and selectively allocated with long-term objectives in mind, avoiding narrow, short-term engagements without consistent programming. Furthermore, frequent reversals of reforms have underscored the necessity of utilizing suitable instruments that combine policy reforms with long-term, largely irreversible investments to sustain those reforms.

 While the World Bank has proposed a “whole-of-country approach” that includes various federating tiers and sectors, Pakistan faces significant political and governance risks that may impede the program’s implementation and lead to a lack of continuity in policy direction.

The risk of this track record continuing is high. New episodes of heightened political tensions could lead to fiscally unsustainable policy decisions, particularly concerning energy subsidies and tax exemptions. Difficult coordination and often incoherent policy positions between the federal government and the provinces exacerbate these risks.

Moreover, under the current coalition government led by Shehbaz Sharif in Islamabad, the gap between the center and the provinces has significantly deepened. What is more concerning is the increasing involvement of Pakistan’s military establishment in supporting this biased approach, which favors Punjab in reaping the most benefits from the federal government’s policies than border provinces like Balochistan and Khyber Pakhtunkhwa.

In April 2024, the WB’s biannual Pakistan Development Outlook report underscored significant long-term challenges, noting that over 10 million individuals risk falling into poverty amidst sluggish economic growth and soaring inflation. The international financial organization has predicted that Pakistan’s real GDP growth may reach 2.8 percent in the fiscal year 2025.

However, this growth level is insufficient to bring down poverty rates in the country, which increased from 40.2 percent in FY23 to 40.5 percent in FY24. Before approving the new loan program for Pakistan, the WB projected economic growth of just 3.8 percent in 2029, a budget deficit of 6 percent of GDP, and a debt-to-GDP ratio of 73 percent — three key indicators of economic health.In October last year, the World Bank also projected foreign direct investment at a mere 0.6 percent of GDP by 2029.

The CPF for Pakistan (2025-2035) identifies several risks across six areas: macroeconomic, sector strategies and policies, technical design, institutional capacity for implementation and sustainability, fiduciary, environmental and social issues, as well as fragility, conflict, and violence, and risks affecting key stakeholders. Najy Benhassine, World Bank Country Director for Pakistan, expressed his concerns, stating, “Our new decade-long partnership framework for Pakistan serves as a long-term anchor for our joint commitment with the government to tackle some of the most pressing development challenges the country faces: child stunting, learning poverty, its remarkable vulnerability to the impacts of climate change, and the sustainability of its energy sector.”

The WB press statement noted, “Pakistan’s per capita income has long stagnated, while high rates of child mortality, child stunting, fertility, and learning poverty continue to persist. This illustrates decades of underinvestment in health, education, water, sanitation, and other public services.”

Furthermore, the assessment has highlighted a growing fragility, particularly in Balochistan and Khyber Pakhtunkhwa. Violence has escalated in these regions over the past year, intensifying what was once a low-intensity conflict.

These areas face the worst human development, poverty, and economic conditions in Pakistan, especially for women, and operating here will become increasingly challenging due to security risks. The World Bank’s assessment of rising instability in these provinces clearly indicates that international organizations are concerned about the detrimental effects of the ongoing security conflict in Pakistan. As a result, the World Bank may proceed with caution in approving the full amount of the new loan package.

Of the USD 20 billion, the World Bank plans to provide USD 14 billion in concessional loans, with the remaining USD 6 billion offered at relatively higher interest rates. This suggests that the global financial institution lacks confidence in Pakistan’s ability to effectively utilize the loan to alleviate poverty and enhance economic indicators. Like the IMF, the World Bank is also concerned that Pakistan might use the funds to repay Chinese loans or invest in CPEC projects. Amid the declining economy, escalating security instability, and rising political and governance risks, the new World Bank loan program may struggle in the coming months as the 10-year CPF for Pakistan faces significant obstacles in the long term. (Times of Oman)

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