EXPERTS FLAG DELAYS, PUSH FOR REFORMS IN MDB PROJECTS

The World Bank (WB) last week announced that Sri Lanka has made remarkable strides in stabilising its economy, undertaking one of the largest fiscal adjustments in its history, equal to nearly 8% of the Gross Domestic Product (GDP) over three years, and doing so faster than most countries. While this signals remarkable economic progress, development and public finance experts caution that the effectiveness of Multilateral Development Bank (MDBs) projects can vary.

- By Mirudhula Thambiah

Projects aligned with national priorities and backed by strong feasibility studies are approved quickly, but initiatives driven primarily by MDBs may face delays if government prioritisation is weak.

Principal Project Fellow, Development and Public Finance from ODI Global in the United Kingdom, Dr Annalisa Prizzon, noted that the delays in the project approval phase in Sri Lanka serve as a cautionary example. She emphasised that while MDBs are taking steps to streamline their procedures, much depends on the quality of project preparation at the national level.

This was highlighted at a session organised by the Centre for Poverty Analysis (CEPA) last week, which brought together researchers, representatives from international financial institutions, the media and other stakeholders to discuss the role of MDBs in enhancing economic growth and reducing poverty in developing countries.

Dr Prizzon’s visit to Sri Lanka was driven by the motivation to understand how MDBs—such as the World Bank, Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank—can operate more effectively in supporting countries like Sri Lanka. The focus was on how these institutions, individually and collectively, can help advance economic transformation

She pointed out that having a clear checklist and timelines is essential, adding that in some countries, projects not implemented within a set period are returned to the initial pipeline to maintain efficiency. Dr Prizzon also observed that the removal of commitment fees by the WB may have reduced urgency in project implementation.

She further explained that MDB reforms are being driven by the need to reduce the length of project cycles, delegate authority to country offices and improve collaboration. She cited the WB’s success in reducing project cycle approval times from two years to 12 months as an example of progress.