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| Sunday, 22 June 2003 |
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US$ 125m from World Bank for poverty reduction The World Bank has approved US$ 125 million of Poverty Reduction Support Credit (PRSC) for Sri Lanka, building upon the country's poverty reduction strategy outlined in 'Regaining Sri Lanka, Vision and Strategy for Accelerated Development'. The Government strategy is designed to move the country along the path of economic growth to reduce poverty by improving governance in the public sector, creating a safe and secure investment climate for greater private sector participation and by investing in human development and empowering the poor. The challenge of securing lasting peace will require a sustained reduction of conflict-related poverty throughout Sri Lanka. The main targets of the strategy are increasing the GDP growth rate to seven per cent within the next three years and reducing national poverty rates from 25 per cent to 20 per cent and rural rates from 27 to 22 per cent by 2006. The Government has indicated that it will work with the World Bank to strengthen the economic environment with private sector participation to create growth opportunities for the rural sector where 90 per cent of the poor reside. Reforms in labour, financial and land markets and the power sector will focus on accelerating economic growth and supporting a greater role for the private sector. These are the key reforms that have been shown by surveys to be the main obstacles to increased private investments. "We are committed to supporting poverty reduction in Sri Lanka which can only come through economic development. It requires sound economic and social policies which this credit supports. It also requires peace," Peter Harrold, Country Director World Bank said in a news release. "Our contribution to the peace process is primarily to support the reconstruction of conflict-affected areas and rebuilding capacity. It is also vital to restore and improve public services in the North and East. A significant proportion of the resources provided under the credit are designed to facilitate this," he said. The release further said the Government has made significant progress in the implementation of the strategy and the achievements include better government expenditure targeting and revenue augmentation, resulting in reduced budget deficit and the need to borrow, new Welfare Reforms Act, insurance industry regulatory authority, pro-competition reforms in telecommunication, energy and other utilities and re-establishing the Independent Public Services Commission to de-politicise recruitment and promotions in the public sector. |
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