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New country assistance strategy formulated

World Bank pledges US$ 800 m for 'Regaining Lanka' 

The World Bank will channel US$ 800 million to meet development targets in Sri Lanka over the next four years, the Bank announced yesterday in Washington. The funds will be disbursed under the new Sri Lanka Country Assistance Strategy (CAS) to support the government's development objectives outlined in "Regaining Sri Lanka: Vision and Strategy for Accelerated Development."

The assistance will be in the form of grants and interest-free loans from the World Bank's International Development Association (IDA). This amount is significantly higher than IDA lending to Sri Lanka over the last five years - which averaged about US $60 million per year, the Bank said.

"Sri Lanka now has the opportunity to embark on a path of sustained peace, more rapid economic growth, and poverty reduction that will benefit the entire population," said World Bank Country Director Peter Harrold in Colombo.

"This new strategy is an expression of the World Bank's confidence in the country's progress so far, and we are pleased to offer this support at such a crucial time."

"The Sri Lanka Country Assistance Strategy is special in that it explicitly focuses on achieving results," said Debbie Bateman, the World Bank Country Coordinator for Sri Lanka.

The World Bank aid is organised around three central themes: Peace, Growth, and Equity. The Bank has identified peace and restoration of domestic security as the basis for the future of the Sri Lankan economy.

The strategy builds upon work the Bank is already doing to support resettlement and revival in the North and East of the country, through restoration of health services, irrigation, and water supply, as well as payments to displaced people returning home. The Bank will support the government's efforts to create an environment conducive to healthy growth of the private sector. Much of this support would be in the form of budgetary assistance, to help finance the implementation of "Regaining Sri Lanka."

The Country Assistance Strategy will support Lanka's efforts to improve access to and quality of public services in education, health, and water supply. These efforts will help meet the Millennium Development Goals (MDGs), internationally supported development goals to which Sri Lanka has also committed.

The last World Bank Country Assistance Strategy for Sri Lanka was presented in June 1996. For a number of years, the momentum for structural reforms slowed in Sri Lanka, while the security situation worsened as a result of the civil conflict. In the last year strong commitment to both lasting peace and economic reforms, backed by actions, have significantly increased development prospects and paved the way for the very large increase in assistance, the World Bank said.

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