At least half a million people in Sri Lanka lost their jobs in 2022, the majority of them being employed women and those in the industry and services sectors, the World Bank says.

According to the Vice President for the South Asia Region of the World Bank Group, those already classified as poor in Sri Lanka have seen a 65% increase in their cost of living, while the increase was 57% for the non-poor, highlighting the significant loss of welfare for all Sri Lankans.

In a piece of writing on the island’s crisis situation, Raiser attributed Sri Lanka’s economic adversity to years of economic mismanagement, weak governance, poor policy choices and the impacts of external shocks such as the Covid-19 pandemic and Russia’s invasion of Ukraine.

Raiser noted that the depth of the crisis has made it clear that Sri Lanka needs a new development model. However, the road to recovery is challenging and the necessary fiscal adjustment measures can be painful, he added.

According to Raiser, debt relief from Sri Lanka’s creditors and fresh financing from international financial institutions are thus urgent to ensure people don’t lose patience with reforms and the opportunity for a change is not lost.

Stating that the economic crisis has left deep scars, Raiser raised concerns about poverty in Sri Lanka, which nearly doubled in Sri Lanka between 2021 and 2022, climbing from 13 to a staggering 25% (using a poverty line of $ 3.65 per person per day), and is projected to increase by more than 2 percentage points in 2023. “In the same timeframe, urban poverty tripled from 5 to 15%. Sri Lanka’s people have been forced to quickly adapt to a new reality where prospects for a good job are limited, incomes are lowered and eroded by inflation, and opportunities for a better future are becoming increasingly rare.”

Raiser urged the international community to help Sri Lanka strike the right balance between pursuing critical reforms to get the economy back on track and ensuring that people have access to safety nets, better jobs, and economic opportunities.

As Sri Lanka recovers, Raiser said it is essential not only to help people escape poverty and vulnerability, but also to strengthen their resilience to future shocks in an increasingly volatile world.

Further, Raiser called this pivotal moment Sri Lanka is facing at present a chance to reset its development model towards green, resilient, and inclusive growth.