Lanka welcomes new approach of ADB's Medium-Term Strategy II - Dr. Amunugama

Minister of Public Administration and Home Affairs Dr. Sarath Amunugama said the ADB has a unique role to play in the Asia-Pacific region. While growth in the regional economy last year attained a robust rate of 7.8%, significant ground remains to be covered for the timely attainment of the Millennium Development Goals.

Sri Lanka therefore welcomes the new approach of the ADB's Medium-Term Strategy II, aimed at meeting the development challenges facing the region. We also endorse the ADB's selection of regional cooperation and integration as one of its key priorities.

He was addrecing the 39th annual meeting of the Asian Development Bank and the South Asian Regional Finance Ministers Conference in Hyderabad.

Dr. Amunugama said the ADB has been a strong and continuous supporter of Sri Lanka's development efforts for more than three and half decades. The quantum of assistance given by ADB has increased substantially during the last three years.

In 2005, while the ADB approved loans totalling US$ 3.65 billion in the South Asian countries, Sri Lanka's share of the approved loans amounted to US$ 410 million. He acknowledged ADB's generous response following the tsunami disaster, by providing US$ 157 million for the recovery activities.

The value of the portfolio of ADB funded projects in Sri Lanka has now reached US$ 1.8 billion, including US$ 215 million in program loans. Many of these ADB-funded projects, including those related to recovery from the tsunami, have been successfully realised, he said.

For us, 2005 marked a year of encouraging progress in the conduct of fiscal policy and budget management, despite the tsunami shock and the sharp escalation of oil prices in the world market. The budget deficit excluding these externalities declined from 8.2 percent in 2004 to 7.2 percent in 2005, providing more resources to other development activities and contributing to overall economic growth.

The economic growth rate for the year 2005 was 6.2 percent, compared with 5.4 percent in 2004. The balance of payments improved with the deficit in the current account declining and a large overall surplus. The country's overall debt indicators also improved with the overall public debt to GDP ratio declining from 104 percent of GDP in 2004, to 92 percent at the end of 2005.

Under the Mahinda Chintana the 2006 budget gave greater clarity to the roles of the private and public sectors in our mixed economy, particularly with regard to the reform of the state owned enterprises.

The budget also emphasises the need to protect the vulnerable groups such as women and children, and to promote rural and small and medium enterprises. It seeks to accelerate infrastructure development to achieve faster and more equitable economic development in the country.