May 22, Colombo: International Monetary Fund (IMF) Managing Director Kristalina Georgieva has expressed concern that without the correct government support the protests seen in Sri Lanka could be repeated in other countries.
Governments need to subsidize the cost of food and energy for the poorest members of society, the IMF Chief has told the BBC.
Sri Lanka’s economic crisis, exacerbated by rising prices, has led to deadly riots, a new prime minister and a first ever default on its debts.
Head of the IMF said such similar unrest before the pandemic, from France to Chile, was caused by "a sense of inequality growing" and decisions being made without the support of the people.
Russia’s invasion of Ukraine has precipitated serious economic and social consequences around the globe, Georgieva said in a statement following the publication of a Joint International Financial Institution (IFI) Plan to Address Food Insecurity on May 18.
“Among them, many countries are now facing dangerous food shortages and sharply higher prices for food, energy, and fertilizers,” she said.
The international financial bodies including the IMF and World Bank this week launched the Joint International Financial Institution (IFI) Plan to try and tackle food insecurity around the world.
Given serious rising food insecurity, together the IFIs will pursue actions to step up, surge, and scale their work to address food insecurity.
In Sri Lanka, ADB is repurposing and utilizing current sovereign projects of nearly $150 million for social protection programs which would include (i) expansion of the existing cash transfer programs; (ii) livelihood development program in relation to food and nutrition insecurity; and (iii) system strengthening and capacity development activities for the existing cash transfer and livelihood development programs.
Wherever possible, ADB’s trade finance guarantees will support the import of essential foods. For 2022, ADB’s trade and supply chain finance programs will provide guarantees to banks for food and agriculture trade transactions involving nearly 2,800 SMEs in 15 developing member countries (DMCs) including Sri Lanka.
ADB is also providing direct agribusiness lending of $420 million for staple food working capital and liquidity targeting nearly 300,000 smallholder farmers in 15 DMCs including Sri Lanka with significant food security needs.
Meanwhile, 22 countries including Sri Lanka will receive additional targeted support through International Fund for Agricultural Development (IFAD)’s new Crisis Response Initiative (CRI) to address short-term food security needs.