One of the largest pressures on the current government is their obligation to the International Monetary Fund’s proposed policy reforms. In 2023, the Sri Lankan government accepted a loan from the IMF for 2.9 billion USD, a lifeline to an economy still struggling to recover from the ravages of the 2022 economic crisis. However, one of the key stipulations needed to receive the loans is adherence to the IMF’s proposed comprehensive policy changes. The loan money is doled out in pieces over the course of 4 years, with the IMF evaluating Sri Lanka’s performance on meeting certain policy reform targets before releasing the promised money. Progress has been made towards many of the IMF initiatives, with the government having met or taken steps towards meeting a significant number of the proposed policy shifts. However, questions linger about whether the reforms will ever reach completion or be effective at solving the problems they were constructed to fix. This is an especially precinct question given the devastation left by Cyclone Ditwah.  Below is a quick spotlight on two key IMF proposed policy changes, assessing the progress that has been made, and the work that still needs to be done. 

State Owned Enterprises Reform

A key point on the IMF’s agenda is to reform the government’s management of State Owned Enterprises (SOEs). SOE is an umbrella term for the over 500 corporations that the Sri Lankan government has managing control over through partial or full ownership. Sri Lanka’s SOEs have been a point of consternation for years, due to the frequency with which they go into debt and allegations of systemic corruption and mismanagement. In order to combat this ongoing problem, the IMF pushed the Sri Lankan government to publish audited financial statements of the 52 major SOEs, which, after some delay, was implemented in November 2025. While this is a step in the right direction, the Sri Lankan government’s ability to continue this policy, as well as their compliance with several of the IMF’s other policy suggestions, is yet to be determined. These include the commitment to construct a plan to reform the notoriously financially challenged SOE Sri Lankan Airlines, as well as the IMF’s recent suggestions to prevent SOEs from taking additional foreign currency loans, and to ensure that future laws surrounding SOEs are compliant with the Public Financial Management Act, which was instituted to ensure that government institutions keep their finances transparent. The IMF still has its eye on SOE reform as an area of crucial importance, and it is important to keep a close eye on future developments regarding SOEs to ensure that the government continues its current trajectory. 

Public Procurement Law 

Another crucial IMF reform intended to curb government corruption is their push for the government to pass a Public Procurement Law. Procurement refers to the government’s process of purchasing goods and services needed for its operations, generally from third party contractors. Historically, Sri Lanka has had few guardrails on its procurement policies, with transactions involving billions of SLR with little transparency as to how funds are being allotted, and to whom they are being sent to.  The government has taken steps towards improving this, including creating a publicly accessible website displaying procurement transactions and requests, as well as gazetting new procurement guidelines. However, as many have been quick to point out, the website has only been used to display smaller transactions rather than the larger transactions that are ripe for government corruption. Crucially, the Public Procurement Law itself has been drafted but not submitted, with no explanation for the holdup. While the steps that the government has taken towards solving this problem are promising, they have still not met the primary IMF policy reform. Much work remains to be done before this policy initiative is fulfilled.