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New Instrument for Financing Sri Lankan Development: For the Attention of Bankers and Financiers

Sri Lanka, which was a low-income country (per capita income below $2,000) until a few years ago, has now reached lower-middle-income country status ($2,840). Of course, while Sri Lanka can be proud of this achievement, middle-income country status requires it to operate within a new paradigm. In the 80’s and to a lesser extent in the 90’s Sri Lanka was the ‘Darling’ of donor agencies who were generous in providing concessionary financing to poor countries which had liberal economies and polities. However, as a lower-middle-income country Sri Lanka is no longer entitled to such finance. The country is now more dependent on international capital markets to finance its development work.

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