Steady progress in power sector reforms
Reforms in the power sector have seen steady progress but we
understand the difficulty in proceeding with the power sector reforms,
said Director Loan Aid Division, Economic Cooperation Bureau, Japanese
Ministry of Foreign Affairs Koichi Aiboshi.
He led a six-member Official Development Assistance (ODA) delegation
to the country to appraise the government of Japan's ODA to Sri Lanka
especially the yen loan projects.
Aiboshi said that he was happy that some reforms were taking place at
the People' Bank too. Tax collection has been revised and we are happy
with the progress as the government is planning to achieve a tax income
of 18 percent of GDP in four years.
"We are happy with the government's Macro policy management and are
closely following the medium term budget sustainability. We also
discussed the government's borrowing policy as we are concerned whether
it will undermine the medium term debt sustainability of the
government", he said.
Once the development plan based on the Mahinda Chinthanaya is
finalised within the next few months there will be another round of
discussions between the line ministries, JICA, JBIC and JETRO to get an
understanding of what projects needs funding before we come to Sri Lanka
During their meeting with donor agencies such as IMF and ADB they
noted that these organisations were more positive towards the Sri Lankan
economy though they are not fully satisfied.
Aiboshi said "Sri Lanka is providing some cooperation although it is
not satisfactory." He said that Sri Lanka has done a good job managing
its economy despite facing a host of difficulties such as rising oil
prices, impact of the tsunami, phasing out of Textile quotas and
troubles in the peace process.
Last year Sri Lanka received Rs. 19.4 billion as assistance under the
ODA which was allocated for the first phase of the Galle port
development project, pro poor eastern infrastructure project and the
Tourism resources improvement project.
This year we have still not decided how much we are lending as this
will be based on the Sri Lankan government's requirements and several
He said that in the event a project is not completed within the
scheduled timeframe we only consider the option of extending the loans'