The International Monetary Fund’s (IMF) Extended Fund Facility (EFF) program in Sri Lanka, initiated in the wake of the nation’s unprecedented economic collapse, is a necessary, yet deeply contentious, intervention. Its stated goals—to restore macroeconomic stability, ensure debt sustainability, and mitigate the economic impact on the poor—are clear. However, the critical question remains: Is the IMF policy, in its current implementation, truly making the poor happy in Sri Lanka? A rigorous analysis, informed by the latest data and the lived experience of the most vulnerable, suggests a complex paradox where macroeconomic stabilization has been achieved at a significant, and perhaps unsustainable, social cost.
As a development economist with experience navigating the complexities of government policy and international financial institutions, I recognize the imperative of fiscal discipline. Yet, I must also contend with the ethical and developmental mandate that any economic recovery must be equitable. The evidence, particularly the persistent and elevated poverty statistics, compels a critical examination of the policy mix, especially the sequencing and distributional effects of the IMF-mandated reforms.
