‘Sri Lanka’s Road to Recovery: Debt and Governance’ conference recaps successes and challenges

• Central Bank of Sri Lanka, Ministry of Finance, and International Monetary Fund co-host key discourse with global and local experts 

The Central Bank of Sri Lanka (CBSL), in collaboration with the Ministry of Finance and the International Monetary Fund (IMF), co-hosted the high-level conference on ‘Sri Lanka’s Road to Recovery: Debt and Governance’ on 16 June at the Shangri-La Colombo. 

The event brought together key policymakers, global stakeholders, as well as private sector and civil society representatives, to deliberate on Sri Lanka’s recovery under the IMF-supported reform program. Conference proceedings commenced with welcome remarks delivered by the CBSL Governor Dr. Nandalal Weerasinghe, followed by opening remarks delivered by the President of Sri Lanka, Anura Kumara Disanayake. IMF First Deputy Managing Director Dr. Gita Gopinath, was the guest of honour of the event and delivered opening remarks representing the IMF. 

The conference provided an opportunity to reflect on Sri Lanka’s macroeconomic recovery and governance transformation since the 2022 crisis, and to assess the country’s progress at the mid-point of the IMF-supported Extended Fund Facility (EFF) program. 

The agenda comprised four panel discussions, namely: a preamble on the overview of the lead-up to the crisis and the contours of the IMF-supported program, followed by two sessions on the road to debt sustainability and road to credibility, and a closing panel on the challenges ahead.

Delivering the keynote, President Anura Kumara Disanayake underscored that although stability is achieved following the crisis, the scars of the economic crisis are still visible. Therefore, it is imperative to implement necessary reforms to improve economic conditions and achieve lasting stability. 

Further, the President asserted that the ultimate goal is to restore national sovereignty through economic stability and self-reliance so that this will be the last IMF program of the country. 

Dr. Gita Gopinath commended the Government on the progress made under the EFF program and highlighted the multiple challenges Sri Lanka’s debt restructuring had to deal with. While acknowledging the courage and sacrifices of the Sri Lankan people, she underscored the importance of staying the course with the reform agenda to ensure sustainable recovery. 

CBSL Governor Dr. Nandalal Weerasinghe, highlighted the significant progress achieved in preserving macroeconomic stability. However, the Governor asserted that lasting transformation must be led within, and the country should take ownership of reforms. 

He further mentioned that key pieces of legislation such as the Central Bank of Sri Lanka Act, Public Financial Management Act, and Anti-Corruption Act have strengthened institutional and regulatory framework related to macroeconomic management.

The preamble session was moderated by CBSL Assistant Governor Dr. Chandranath Amarasekara, who framed the discussion within the context of Sri Lanka’s unprecedented crisis in 2022 and its subsequent recovery efforts. The distinguished panel featured Secretary to the Treasury Mahinda Siriwardana, IMF Director, Asia and Pacific Department Dr. Krishna Srinivasan, Centre for Poverty Analysis Executive Director Prof. Sirimal Abeyratne, and Sri Lanka Banks’ Association Chairman Sanath Manatunge . The panel noted that the reform pace had been extraordinary, driven by strong political will and institutional coordination, while acknowledging ongoing challenges such as ensuring inclusive outcomes and maintaining the reform momentum.

Session 1: The Road to Debt Sustainability was moderated by IMF Division Chief at the Asia and Pacific Department and former IMF Mission Chief of Sri Lanka Dr. Peter Breuer. The session featured Paris Club Co-Chair William Roos, Ministry of Finance Former Economic Advisor Deshal de Mel, Citibank Head of Emerging Markets Johanna Chua, and Clifford Chance Partner in Capital Markets Deborah Zandstra. The discussion explored Sri Lanka’s experience of debt restructuring within its complex creditor landscape, the implications of that on shaping global debt architecture, and lessons for future debt sustainability. The panel emphasised the importance of transparency and equitable burden-sharing, as well as the important role of the IMF and debt advisors during Sri Lanka’s debt restructuring process.

IMF Legal Department Deputy Division Chief Joel Turkewitz moderated Session 2: The Road to Credibility. Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma, Commission to Investigate Allegations of Bribery or Corruption – CIABOC Commissioner K.B. Rajapakse, Advocata Institute Chair Murtaza Jafferjee, and University of Peradeniya Professor of English Arjuna Parakrama shared their experience and insights during this panel discussion. The panel noted that governance is a cornerstone of sustainable reforms and highlighted the importance of the Governance Diagnostic exercise of Sri Lanka, which was the first involving an Asian country. While participants acknowledged the legal and institutional reforms introduced, they called for consistent enforcement and public consultation to strengthen public trust and support for the reform agenda and ensure the equitability of the reforms.

The conference concluded with the Closing Panel: The Challenges Ahead, moderated by IMF Director of the Asia and Pacific Department Dr. Krishna Srinivasan. The distinguished panel comprised IMF First Deputy Managing Director Dr. Gita Gopinath, Minister of Labour and Deputy Minister of Economic Development Prof. Anil Jayantha Fernando, CBSL Governor Dr. Nandalal Weerasinghe, CBSL Former Governor Dr. Indrajit Coomaraswamy, and Institute of Policy Studies Executive Director and Central Bank Monetary Policy Board Appointed Member Dr. Dushni Weerakoon. Dr. Gopinath cautioned that there is no room for policy errors, stressing the importance of maintaining reform momentum and guarding against program fatigue. Prof. Fernando reaffirmed the Government’s commitment to fostering a more equitable society and underscored the importance of continued collaboration with development partners to support Sri Lanka’s recovery and development objectives. Governor Dr. Weerasinghe emphasised the critical role of private sector development, along with the continuation of structural and institutional reforms, consolidating recent economic gains. Meanwhile, Dr. Coomaraswamy highlighted the importance of sustaining an export-led growth strategy as a cornerstone of long-term macroeconomic stability. The need for deep institutional reform to strengthen public confidence and reinforce the credibility of the reform agenda was underscored by Dr. Weerakoon. 

The event marked a significant milestone in Sri Lanka’s recovery journey, underscoring the shared commitment of the Government of Sri Lanka, the Central Bank and the International Monetary Fund to foster macroeconomic stability and institutional governance to support inclusive development.