Donors give green light to massive development aid

US$ 9 billion envisaged in three years

[Wednesday, January 31, 2007 - 8.00 GMT]     

The Sri Lanka Development Forum has announced new development assistance for 2007-2009 in the region of US$ 4.5 billion. This was decided after reviewing the progress made in the disbursements and commitments of development assistance in 2006 and some of the implementation challenges.

With the existing funding in the pipeline, Sri Lanka's total development assistance will rise to around US$ 9 billion within the next three years. The renewed development initiatives in the Eastern and Northern provinces are expected to increase this further.

Announcing this at a press briefing immediately after the conclusion of the Sri Lanka Development Forum 2007 held on 29-30 January, 2007 in Galle, Dr Sarath Amunugama, Minister of Enterprise Development and Investment Promotion said that the decisions taken by the Forum are an endorsement of the development strategies under the Mahinda Chintana.

At the Forum was chaired by President Mahinda Rajapaksa, the government presented a detailed account of its ten year development framework and
related issues; the political economy, post tsunami recovery challenges, security, law and order, conflict, terrorism and peace, human rights, humanitarian and resettlement challenges, reconstruction of conflict
affected areas, the continuing role of civil society, infrastructure development, equity, donor assistance and implementation challenges.

During the deliberations, Dr. Sarath Amunugama expressed the Government's appreciation of the assistance afforded by the international community to
facilitate relief and recovery from the Tsunami of December 2004.

Among the donor representatives who made statements at the Forum were Mr. Frederick Lyons, United Nations Resident Coordinator, Shri Dinesh Kumar Jain, Ministry of External Affairs of India, H.E. Robert Blake Ambassador
for the USA in Sri Lanka, Mr. Reiichiro Takahashi, of the Ministry of Foreign Affairs of Japan, Mr. Liqun Jin, Vice President, Asian Development Bank and Mr. Praful Patel, Vice President, World Bank.

"Sri Lanka has all the possibilities to reach its Millennium Development Goals by 2015," said Mr. Praful Patel, Vice President, World Bank addressing the media at the conclusion of the Forum. He added that all the donors had a very positive mindset regarding the discussion as well as the development plan amidst the challenging environment existing in the island.  

"We can help to make a difference," said Mr. Liqun Jin, Vice President, Asian Development Bank (ADB). He said the ADB was committed to assist the Government to achieve the MDGs of Sri Lanka and they were already in the discussion process to provide aid for the Southern Transport Project and the Colombo Port Expansion Project.

The speakers welcomed the development process envisaged in the "Mahinda Chintana - Vision Towards a New Sri Lanka", and commended the government on
the comprehensive articulation of its vision and strategy, prepared with wide consultation involving development partners and all stakeholders. They
welcomed the focus on reducing regional and income disparities, and were of the view that though somewhat ambitious, the country has the potential to reach these goals, with the implementing of the Mahinda Chinthana
Development Programme, while pursuing a lasting solution to the country's conflict.

The development partners indicated the importance of harnessing the linkages among poverty reduction, governance, peace and equality, and the need for
addressing issues related to the implementation of the languages policy. They reiterated their willingness to be proactively involved in the peace building and development process based on the Ten Year Horizon.

The donors further appreciated the efforts of the Government of Sri Lanka to cope with Human Rights and humanitarian challenges and commended the Government for establishing a Commission of Inquiry under the initiative of the President to investigate cases of Human Rights violations, as well as the setting up of the International Independent Group of Eminent Persons (IIGEP) to observe the activities of the Commission.

Detailed Account

The government presented a detailed account of the ten year development framework and related issues; the political economy, post tsunami recovery
challenges, security, law and order, conflict, terrorism and peace, human rights, humanitarian and resettlement challenges, reconstruction of conflict
affected areas, the continuing role of civil society, infrastructure development, equity, donor assistance and implementation challenges.

The development partners welcomed the focus on reducing regional and income disparities. They were of the view that though somewhat ambitious, the country has the potential to reach these goals, with the implementation of the Mahinda Chinthana Development Programme, while pursuing a lasting solution to the conflict. In this regard, they commended H.E. the
President's commitment to find a negotiated solution to the conflict through a process of consensus building.

President's address

Delivering the inaugural address on January 29, President Mahinda Rajapaksa appreciated the donor assistance in rebuilding the Tsunami affected areas to
near normalcy. He said the historic city of Galle had been rebuilt, and areas in the North and East too could have been rebuilt had the promised cooperation of the LTTE been received. The President referred to the gains
made in managing a complex economy, while facing a series of challenges during the first year of his administration, which was also the first year of the decade committed by Sri Lanka to realize the Millennium Development Goals. He highlighted the burdens imposed on the economy and people by escalating oil prices, natural disasters, intense competition faced by
export industries, and the deliberate escalation of terrorist attacks by the LTTE.

The President said the Government has accorded high priority to building a nation-wide infrastructure network to accelerate growth in lagging regions, under the "Jathika Saviya-Gama Naguma" Programme, and accelerated implementation of infrastructure projects under the "Randora" programme in key areas such as power, irrigation, roads and transport, seaports,
airports, and urban amenities. Equal importance was being placed on promoting human resources and a knowledge based economy by implementing "Nana Sala" and "E-villages" initiatives in the rural areas. The President explained that the non-cooperation of the LTTE to participate in the negotiation process and their refusal to allow other democratic parties to function prolonged the conflict and interrupted some of the development activities in the Northern and Eastern Provinces.

The President emphasized the need for development to be associated with a good value system, respect for human rights and democracy, culture and heritage for it to be wholesome and sustainable. While reiterating the need to defeat terrorism by working closely with the international community, the President expressed his determination to pursue political negotiations and
constitutional solutions. President Rajapaksa sought the cooperation of the development partners in building a new Sri Lanka based on "Mahinda Chinthana" the Ten Year Horizon, to help achieve the Millennium Development Goals (MDGs).

Achievements recognized

The development partners recognized the achievements of Sri Lanka on the road towards middle income status and towards reaching the MDGs. They noted the resilience of the economy in terms of economic growth, which is estimated to have exceeded 7 per cent in 2006, the reduction in unemployment to around 6 per cent, improved revenue performance and withstanding the budgetary and balance of payments pressures amidst difficult challenges. However, they expressed concerns about the high costs of renewed conflict
and its impact on achieving development goals. They also noted the continuing macroeconomic risks due to high inflation and debt dynamics, and welcomed the focus of the government medium-term macro economic strategy to address these concerns.

Terrorism

The Government and the development partners agreed that terrorism should be separated from finding a solution to the conflict and that a lasting solution should be found through a negotiated settlement. They recognized that such a solution, which would involve improved power sharing and development cooperation, could expand the development horizon for the country, with higher aid and private capital inflows, including for
accelerating the development of conflict affected and other lagging regions.

The Government explained the role of the security forces in protecting civilians, public property and economic centres while safeguarding the territorial integrity of Sri Lanka, and suppressing terrorism with minimum civilian casualties. Both the Government and the development partners recognized with serious concern the humanitarian suffering associated with
the violence and the need to provide fastest possible relief to the affected. The Government explained to the development partners the actions taken so far, the progress being made and remaining challenges due to
non-cooperation by the LTTE.

Humanitarian Assistance

The participants discussed the role of NGOs and INGOs in the process of humanitarian assistance and the delivery of development assistance in general. The Government and the development partners recognized the positive role that these organizations can play in Sri Lanka's development process and in the implementation of the ten year development strategy. The Government while noting the concerns expressed by some of the development partners about the difficulties that some of these NGOs and INGOs were facing, pointed out the need for transparency and accountability among these
NGOs and INGOs, and the need for them to work closely with government organizations.

The Forum reviewed the progress made in the disbursements and commitments of development assistance in 2006 and some of the implementation challenges. Based on ongoing negotiations, it is expected that the new development assistance over 2007-2009 would be in the region of US$ 4.5 billion. With the existing funding in the pipeline, Sri Lanka's total development assistance will rise to around US$ 9 billion within the next three years. With the renewed development initiatives in the Eastern and Northern
provinces, this is expected to increase further.

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Last Updated Date: January 31, 2007 - 8.00 GMT