Sri Lanka and the Asian Development Bank (ADB) have agreed on a new Country Partnership Strategy (CPS) for the next four years targeting economic growth and development.

The new Country Partnership Strategy for 2012 to 2016 targets to reduce regional disparities, catalyze private sector participation in development, and remove human resource constraints, the ADB said in a statement yesterday.

The CPS builds on the priorities of government's Development Policy Framework and ADB's Strategy 2020, and also refines the focus of the previous CPS from 2009- 2011.

The ADB says with the restoration of political and economic stability following the end of the war in 2009, the country has good opportunity for rapid economic growth and development but the poor quality infrastructure is a major constraint to sustaining rapid economic growth.

The lending agency expects Sri Lanka's economy to grow at around 8% in the medium term.

According to the Lead Economist in ADB's Sri Lanka Resident Mission Narhari Rao, the aim of the CPS is to assist the Sri Lankan government to address major constraints to sustaining inclusive growth in the country.

"To be effective, ADB's operations will be strategically focused on a few sectors. ADB will support infrastructure development that improves connectivity and service delivery to lagging regions, including the former conflict-affected regions of the country," Rao said.

To increase the effectiveness of public investment and catalyze private investment, ADB will support the environment for Public-Private Partnerships (PPPs) and early identification of PPP candidate projects.
Under the CPS, the ADB will also provide non-sovereign loans to reforming state-owned enterprises to expose them to alternate sources of finance.

As demand grows for an educated and skilled labor force, the agency will support skills development with a focus on reducing gender disparities, by expanding and improving the quality of technical and vocational institutes and related infrastructure to remove human resources constraints.

The CPS will focus on improving environmental sustainability by strengthening country safeguard systems, and providing support for climate change adaptation and also to promote multimodal transport systems to ease road congestion and reduce pollution.

Public financial management and public procurement will be strengthened by introducing stringent anticorruption measures and mainstreaming accountability and transparency in ADB's operations.

Gender equity will be promoted by designing projects that are gender-inclusive, especially in the education, health, water and sanitation, and infrastructure sectors.

Opportunities to foster regional cooperation will be explored in all interventions especially in the transport and energy sectors, and in climate change initiatives.