Sri Lanka Resilience, Stability and Economic Turnaround Development Policy Operation

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The development objective of the Resilience, Stability, and Economic Turnaround (RESET) Development Policy Operation (DPO) for Sri Lanka is to support foundational reforms that restore macroeconomic stability and sustainability, mitigate the impact of current and future shocks on the poor and vulnerable, and support an inclusive and private-sector-led recovery and growth path. This plan aims to restore stability through a macroeconomic adjustment in the short run, help the poor cope with the current shock, and address structural causes of the current crisis to help restart growth. The programmatic DPO series seeks to address some of the root causes of the crisis and introduce measures to avoid a repetition of such a crisis through three pillars: (i) improving economic governance through better fiscal and debt management, improving tax policy and administration, and addressing financial sector risks; (ii) enhancing growth and competitiveness through state-owned enterprise (SOE) reforms and divestment, streamlining trade and investment policies, and mobilizing private capital and competition in the broadband market; and (iii) protecting the poor and vulnerable through the rolling out of a new Welfare Benefit Payment Scheme (WBPS) and reducing gender discrimination in the labor market.