Sri Lanka’s economic conversation has become increasingly dominated by one question: when will the IMF programme end? It is a perfectly reasonable question, but perhaps not the right one. The more important question is what happens the day after.
There is no doubt that the International Monetary Fund has played a critical role in stabilising an economy that, only four years ago, was on the brink of complete collapse.
Inflation has fallen dramatically. Foreign reserves have recovered. Debt restructuring is progressing. The queues have disappeared, fuel is available and confidence, at least compared with the dark days of 2022, has returned. That is no small achievement.
But stabilisation is not prosperity.
It is one thing to stop an economy from bleeding. It is quite another to make it healthy enough to compete. The IMF can provide the discipline required to restore order to public finances. It cannot create entrepreneurs. It cannot persuade investors to bring capital into Sri Lanka. It cannot build industries, create innovation or generate the thousands of high-value jobs needed to prevent another generation of talented young Sri Lankans from leaving our shores.
That responsibility rests squarely with those who govern. There remains a tendency within Sri Lanka to measure economic success by macroeconomic indicators alone. Exchange rates stabilise, inflation falls and reserves rise, and understandably governments celebrate.
Yet none of those figures necessarily tells a small businessman whether sales are improving, a graduate whether meaningful employment is available or an investor whether the regulatory environment has become easier to navigate.
Growth comes from confidence. Confidence comes from consistency. Investors are remarkably patient with difficult economic conditions if they know the rules will remain stable. What they struggle to accept is uncertainty. Policy reversals, changing tax regimes, contradictory regulations and endless bureaucratic approvals have discouraged far more investment than economic downturns themselves.
Sri Lanka’s greatest competitive advantage has never been cheap labour or abundant natural resources. It has always been its people, its strategic location and its ability to serve as a gateway between East and West.
Those advantages remain intact. The question is whether we are creating an environment in which those strengths can flourish.
The IMF programme will eventually end. That is inevitable. What matters is whether Sri Lanka emerges merely with healthier accounts or with a genuinely stronger economy. There is a profound difference between recovering from a crisis and preparing for the future. One is about survival. The other is about ambition.
Be that as it may, history rarely remembers countries for successfully completing IMF programmes. It remembers those that no longer needed them.
