The International Finance Corporation has sent Sri Lanka 400 million dollars in aid. The aid comes during Sri Lanka’s most significant economic crisis of the century. Sri Lanka’s economy collapsed in 2019 due to a massive shortage of currency, corruption, and poor spending by the government. The IMF, the WTO, and the World Bank warned the state about its spending but did not heed the warnings. Covid-19 brought further chaos to their economy as global trade and spending came to a standstill. This relief package was geared toward 3 central banks that manage 1/3rd of the state’s trade products. This boost in exchangeable currency is intended to increase investment and confidence from firms within and outside of the Sri Lankan domestic economy. Sri Lanka is currently waiting on a 2.9 billion dollar bailout but needs to get control of debt before the IFC will release the funds to major firms in the county. I am skeptical about this initial round of aid to Sri Lanka. corruption is widespread throughout the upper levels of government and the private sector. If Sri Lanka wants to continue to see aid and prevent its economy from shrinking another 6%-9% this year, it will need to ensure these funds are truly handed to the firms and economic sectors in a meaningful manner. Only more time will tell if the Sri Lankan government is willing to put aside its lust for wealth to support its dying economy or if this aid will find itself back in the pockets of the officials that lead to the crisis in 2019.

https://www.reuters.com/world/asia-pacific/world-banks-ifc-provide-sri-lanka-with-400-mln-financing-2023-02-27/