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Being the only Asian to be invited to the Consultation on World Bank Group Strategy in Middle Income Countries, Constitutional Affairs and Industrial Development Minister Prof.G.L. Peiris said that a strong case could be made out for continued assistance from the Bretton Woods institutions for middle-income countries. In his presentation, the Minister focused on three obstacles Sri Lanka is facing today. The major problem facing the island is the ongoing-armed conflict bringing the planned expenditure from Rs.51 billion to Rs.83 billion. This colossal amount places a strain on the economy and every effort was being made to contain the budget deficit at 9% of G.D.P. Secondly, Prof. Peiris said the effect of exogenous shocks such as Asian capital market crisis and the rising world oil prices also placed a considerable burden on the nation's economy. Thirdly, with the gaining of Middle Income status, which Sri Lanka is on the threshold of attaining, there were heavy costs entailed by having to undertake structural adjustments which were necessary to restructure financial and other systems and institutions. This placed an additional fiscal burden on the economy, he added. The challenged posed to the country are that much more complex and demand greater attention, Prof. Peiris said. Structural adjustments had to be made to facilitate the transformation and the reorganisation of banking and financial institutions in particular becomes a priority in the new environment. At the same time efforts must be made to preserve social tranquillity by ensuring equitable sharing of resources and in this context the provision of a safety net by way of poverty alleviation programmes and efforts to raise income levels have to be undertaken. Several middle-income countries of the world are now being gathered in Washington D.C. to discuss the future role of the World Bank in their future. This occasion is organised under the patronage of the World Bank.
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