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| Saturday, 11 September 2004 |
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Sri Lanka's prospects for growth and prosperity hinge on continued progress on peace in the country and on economic growth based on a concrete reform agenda, Alessandro Pio, the Asian Development Bank's new Country Director for Sri Lanka, said yesterday. Speaking at an introductory press conference, Pio, who assumed office in August having served as Principal Programs Economist in the ADB Vietnam Resident Mission in Hanoi, said Sri Lanka has significant economic potential. "Like Vietnam, Sri Lanka has strong social indicators and significant economic potential, but needs to improve the efficiency of the economy and accelerate the pace of growth in order to generate jobs and income," he said. "Only through additional economic growth and fiscal revenues will the country be able to target resources to poverty alleviation." He says it is important that the country continue to progress in the peace process and in defining a solid macroeconomic and policy framework, to counter the destabilizing impact of external oil price shocks. "Renewed impetus for economic growth will continue to hinge critically on the resumption in peace talks, and also on a concretized economic reform agenda and its implementation," he added. Pio replaces John Cooney, who returned to ADB headquarters in Manila, Philippines. An Italian, Pio has extensive experience in the development field, particularly with regard to ADB operations, combined with an academic background in economics. He recently completed 10 years of service with ADB. During this period he was also country economist for Sri Lanka during 1997-1998 and author of the previous ADB strategy for Sri Lanka. "In my new assignment, I will draw from the lessons on successful development of other countries I have worked in, and try to adapt them to the particular situation of Sri Lanka" he says. Under ADB's Country Strategy and Program (CSP) Update for Sri Lanka for 2005-2006, endorsed this week by the Board of Directors, the bank is planning to lend US$570 million to the country over the next two years. This includes annual commitments of $90 million from ADB's concessional Asian Development Fund (ADF), which assists ADB's poorest members, and a total of $390 million over two years from its ordinary capital resources (OCR). Final allocations will depend on country performance and resource availability. "Assuming continued economic growth and economic reforms, the program plans a gradual move toward increased OCR lending for power and major road projects, and retains ADF for education, remote provincial and rural roads, and urgent reconstruction and rehabilitation work in the north and east," says Pio. He stressed that ADB would continue its support to the reconstruction and normalisation of conflict affected areas. "Three loans totalling $121 million, including a $10 million loan approved in June 2004, are helping people in the North and East to return to lead normal lives by rehabilitating schools, hospitals and roads, and beginning institutional strengthening and capacity building," Pio said. Pio noted that Sri Lanka's economy has proven remarkably resilient in the past, and continued to grow an average of about 4 per cent per year despite two decades of civil war. Economic growth in the first quarter of the year of 2004 was solid, building on improving prospects for peace and stability in previous years. A stable macroeconomic environment encouraged domestic consumption and industrial production, and increased imports. |
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