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World Bank President James D.Wolfensohn has assured the fullest support of the Bank for Sri Lanka's development efforts under the more promising outlook for peace and economic progress.

Wolfensohn made this assurance during extensive talks with Minister of Economic Reform, Science and Technology Milinda Moragoda in Washington last week.

Minister Moragoda briefed him on the government's ongoing economic reforms and the progress of the peace process. The Minister explained that considerable progress has been made in the peace process and mentioned that the government was hopeful that this process would lead to longlasting peace, although there is no easy way forward.

Wolfensohn stressed the importance of timely implementation of economic reforms to help speed up development assistance. He said he was personally aware that prospects for lasting peace is more real now than in the past.

The minister mentioned that the government has renegotiated and realigned the Stand-By Arrangement (SBA) taking into account the recent developments in both external and domestic circumstances.

He said that the government is planning to move on to a Poverty Reduction and Growth Facility Arrangement during this year. He further said he is fully aware that the successful implementation of the SBA would provide a strong basis for this.

When Mr. Wolfensohn asked about the status of the preparation of the government's basic medium-term development strategy document which, according to the World Bank and the Fund terminology, is named as "Poverty Reduction Strategy Paper (PRSP)", the Secretary, Ministry of Finance, Charitha Ratwatte mentioned that the document was being prepared and would be finalised in June this year.

The Minister explained that the government's medium-term development strategy would be a holistic approach taking also into account the entire country's development needs. The reconstruction and rehabilitation of the North and East was one of the essential components of a comprehensive program and the development of infrastructure and other facilities of the rest of the country would also be looked after. The minister requested World Bank involvement and assistance in this regard. Minister Moragoda also highlighted the need for further development in the Information Technology and education sectors.

Among the participants were World Bank's Managing Director, Shengman Zhahg, Vice President for South Asia Mieko Nishimizu and Sri Lanka Country Director Mariana Todorawa, Executive Director B. P. Singh, Governor Central Bank, A. S. Jayawardena, Alternate Executive Director of the IMF R. A. Jayatissa and Director General Fiscal Policy of the Ministry of Finance M. A. R. C. Cooray.

Before the meeting with Mr. Wolfensohn, the Minister along with the Sri Lanka delegation including Dr. A. G. Karunasena met Micko Nishimizu and her key officials working on Sri Lanka to discuss World Bank Assistance to Sri Lanka, where the Minister was also briefed about the current status of the expected Private Sector Development Credit Facility.

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