Announcement of Special Aid Initiative for Sri Lanka on August 11, 1987

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 88/S9 Contact: P.B. Sison (202) 477-4347 SPECIAL AID INITIATIVE FOR SRI LANKA I 1't 7 WASHINGTON, August 11 - In response to an appeal from the Government of Sri Lanka, following the signing of the Peace Accord on July 29, the World Bank today announced that it will convene a Special Aid Group Meeting to mobilize and coordinate resources for reconstruction and development in Sri Lanka. Mr. Attila Karaosmanoglu, the World Bank's Regional Vice President for Asia, said that Bank staff will re-evaluate the needs of Sri Lanka's economy and will help to draw up a program of high-priority reconstruction and longer-term development. "The World Bank will coordinate a cooperative effort of reconstruction and rehabilitation in Sri Lanka. We are taking steps now to contact other aid donors in preparation.for the special meeting, which we hope to convene at the earliest opportunity," Mr. Karaosmanoglu said. "There is much to be done, but Sri Lanka can draw from a growing reservoir of goodwill and the determination of the international aid community to be equal to the task," he noted. At a meeting of the Sri Lanka Aid Group in Paris on June 25, the World Bank indicated that it was willing to organize such a reconstruction effort and was prepared to join with governments and other aid donors in this endeavo~. Upon signing of the Peace Accord, the World Bank began discussions with the Government of Sri Lanka on plans for a reconstruction effort and a resumption of development, including resumption of disbursements on Bank projects in security-affected areas. The ethnic conflict has immensely slowed the pace of Sri Lanka's development. It has inflicted considerable damage to the country's transport, communication, and public capital stock. It has sharply reduced private economic activity. It has caused the suspension of most development efforts in the areas of conflict, including several World Bank-supported projects. Since 1954, the Bank and its concessionary lending affiliate, the International Development Association (IDA), have assisted 52 projects in Sri Lanka, with loans and credits totaling $1.083 billion. About 53 percent of this amount has been for agriculture, 17 percent for power, 10 percent for.transport, and the remaining 20 percent has supported development finance company operations; a program credit to provide raw material imports for industry; water supply; construction industry training; and telecommunications.