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| Sunday, 17 March 2002 |
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ADB President predicts above 5% growth for Sri Lanka by SUREKHA GALAGODA The President of Asian Development Bank (ADB) Tadao Chino expressed confidence that Sri Lanka could achieve a growth rate of five per cent or more in 2002 with the peace process and economic reforms. Chino made these comments after signing a landmark Poverty Reduction Partnership Agreement (PRPA) in Colombo on March 8 with the Government of Sri Lanka. He said that several factors such as the attack on the airport, slowdown of the international economy, bad weather and the September 11 attack on USA led to the country achieving minus one per cent growth last year. But in the longer perspective, during the 1990s, the country achieved an average growth rate of five per cent even with the conflict in the North and the East. "Therefore, we are confident that Sri Lanka can achieve a growth rate of five per cent or more this year with the initiating of the financial sector reforms, the privatisation programme and most importantly by redirecting resources for social development as a result of the peace process," said Chino. Expressing his views on the agreement, Chino said: "The ADB has reaffirmed its shared commitment to reduce poverty in Sri Lanka by signing the agreement. Under the programme, ADB has given a loan of US$ 200 million while similar amounts will be allocated annually". He described the agreement as a major milestone in ADB's development partnership with the people of Sri Lanka. Mr Chino said the agreement sets specific time-bound targets and includes detailed mechanisms to monitor progress. It represents ADB's long-term commitment to Sri Lanka's future economic development. The agreement commits both parties to work towards reducing the level of poverty to 20 per cent of the population by 2015 from the present 40 per cent and six to seven per cent of GDP growth from 2002 and reducing the budget deficit to five per cent by 2005 from 12 per cent in 2001. The ADB will assist the government in creating an environment for sustainable economic growth to effectively reduce poverty. Almost 40 per cent of Sri Lanka's population is poor while the benefits of growth are not evenly distributed. The agreement will also support the government's Framework for Poverty Reduction 2000. The strategic focus will include creating opportunities for pro-poor growth, strengthening the social protection system and empowering the poor and strengthening governance. In the medium term, the Government and the ADB will aim to achieve sustainable poverty reduction by promoting broad-based pro-poor growth to generate employment opportunities and increase rural income. When Chino met Prime Minister Ranil Wickremesinghe, he has reaffirmed his commitment to a negotiated settlement to bring peace. The Prime Minister has requested the ADB to look into the possibility of extending help to restore transport services in the North and East specially rail services and highways. He said that ADB assistance to the conflict areas was absolutely essential. It is necessary to work with the Government to carefully plan the rehabilitation programme for the North and East. "Our North-East Community Restoration and Development Project approved in October last year is moving ahead and the ADB is also planning projects for water supply and community development in the East," said Chino. Minister of Finance K.N. Choksy, addressing the gathering, said that when the UNF government assumed office, there were two priority areas: endeavour to settle the North-East conflict and enhance economic activities to reduce poverty and achieve higher growth. He said the Government has been successful to some extent at resolving the North-East conflict. It is necessary to improve the economy to achieve a high growth rate. In our endeavour to reduce poverty, the ADB will be a partner. ADB Country Director John R. Cooney said that the agreement would be reviewed separately under the ADB's medium strategy covering 2002-2007 on an annual basis. Last year the ADB granted US$ 146 million to support six projects while assistance worth around US$200 million is in the pipeline for this year. The ADB has given US$ 1 billion as aid for ongoing and approved projects. It has provided a total of US$2.7 billion to Sri Lanka since commencing operations in 1968. |
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