World Bank takes conflict sensitive approach

$ 900m under Country Assistance Strategy:

by Gamini WARUSHAMANA

[email protected]

The World Bank has taken a more conflict sensitive approach in the new Country Assistance Strategy (CAS) of the Bank for the next three years (2009-2012).

The Bank has pledged US$ 900 million development assistance for the three years and has specially focused on development issues in the North and East provinces.

WB Country Director Naoko Ishii said that roughly 30% of the Bank’s financial assistance would be allocated for the development of the conflict affected North and East.

The CAS focuses on three key objectives; Expand economic opportunity in lagging regions, improve the investment climate and competitiveness and enhance the quality, efficiency, effectiveness and accountability of the service delivery by government institutions. Ishii said that these objectives are fully aligned with the government’s development strategy.

She said that the ongoing conflict is a major obstacle to the longer term development of the country and the development pace can only be truly secured by a political solution.

As the conflict permeates our day-to-day life we have to think of how to insulate development work from the distortions of the conflict while finding a way for the WB to address the needs, driven by the conflict. Therefore, across the three objectives we have emphasised the importance of an approach that is sensitive to conflict. This keeps us ever alert to potential distortions and risks, she said.

The WB is strict on money allocated to the North and East provinces. The CAS report stressed that the WB will not allow resources committed for the North and East at the program level to be reprogrammed to other parts of the country even if a deteriorating situation on the ground makes it impossible to implement activities there. The money unspent due to the escalation of the conflict will not be available to Sri Lanka.

The CAS has introduced a concept called ‘Conflict filter’ at the project level with greater conflict sensitivity in designing, implementation and monitoring and evaluation in all lending operations of the Bank.

Accordingly, the projects will have to transparently distribute the benefits based on the objective criteria and mitigate potential tensions through broadbased consultations and a credible grievance redress mechanism.

The first strategic objective of the CAS targets to address the imbalanced economic development skewed to the western province and relatively low growth in the other regions. The report said that the growth of these regions is hindered by poor market access as a result of poor infrastructure. Poor transportation coupled with poor access to finance has impeded the transition from agriculture to non farm economic activities in rural areas.

Referring to objective two, the report said that higher investment and higher productivity are required to accelerate economic growth. The average investment to the GDP ratio of 26.2% in the past five years is low compared to South Asia’s average. Policy uncertainity, (in particular on account of the conflict), macroeconomic instability, cost of finance, poor infrastructure, (including unreliable and expensive electricity supply) and rigid labour market are the constraints to private business, the report said.

Under the third strategic objective, the CAS has mainly focused on the education and health services. Recognising significant achievements in these sectors, the report said, that delivery of basic public services faces a number of challenges that have their roots in emerging economic, social and demographic changes.