Sri Lanka’s Anti-Corruption Bill is set to come into force today. The legislation is part of the preconditions for an
Sri Lanka’s Anti-Corruption Bill is set to come into force today.
The legislation is part of the preconditions for an International Monetary Fund rescue package approved in March, whereby $3 billion in government budgetary aid will be disbursed in stages to the island nation.
Sri Lanka has been dealing with an historic economic crisis since 2022. A shortage of foreign currency forced the country to default on its foreign debt, causing rampant inflation and a rapid depreciation of its currency. With Gotabaya Rajapaksa’s government unable to import fuel and other necessities, the economy came to a standstill. The economic collapse sparked a popular revolt that led President Rajapaksa to flee the country and six-time Prime Minister Ranil Wickremesinghe become the new president. A year later, economic activity is tentatively gathering pace driven by the tourism industry, the country’s main source of foreign currency.
Expect Sri Lanka’s Anti-Corruption Law to boost foreign investors’ and international financial institutions’ confidence in the island nation in the short and medium term. Despite the gradual return of economic activity, many difficult restructuring measures still lie ahead; but if Sri Lanka can achieve rapid and meaningful restructuring with its external creditors, long-term economic recovery could look more positive.