Announcement of Ceylon Aid Group Meeting on February 25, 1970

LNTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 181,8 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 February 25, 1970 Subject: Ceylon Aid Group Meet,ing The following announcement was issued today at the World Bank's European Office ih Par1.s: "The sixth meeting of the Ceylon Aid Group was held in Paris on February 24 t: and 25 under the chairman"ship of' the World. Bank. The following" countries were represented: Australia, Canada, France, G~rmany, Japan, the United Kingdom and the United States. Representatives' of the International Monetary Fund, t~e Asian Development Bank, the United Nations Development·Programme, the Organi~ zation for Economic Cooperation and Development and observers from Denmark, • India and Ital:y al'sb attended. As in past years the C~eylon delegation, was led by D~. Gamani Corea, Permanent Secretary of the Ministry of Planning and Bconomic Affairs. t "The Group, reviewing the development of Ceylon's economy since its forma.- t'ion in 1965, noted with satisfaction the acceleration of economic growtn and l; ,.·· .--~- t.he expansion in investment activity that had beerioachieved. (fr-' It concluded that '/ on the whole the development strategy adopted in '.1965 had been remarkably suc- cessful, considering the condition of the economy in 1965 and the very tight foreign exchange situatior1 which prevailed throughout the latter half of· the 1960 1 s, largely because of the sharp decline in the international price of tea, Ceylon's major exchange earne~t:• It attributed this achievement mainly to the Government's efforts to improve the management of the economy, creating conditions conducive to economic growth, in which increased assistance from the Group could be effective. /more  ··, Ii I\ Ii /1 Unn. Bk. p.r~' - Ceylon Aid Group Meeting - 2 .. "In the light of these achievements, the Group viewed favorably Ceylon's • I capacity for sustaining the momentum of economic growth in future, if suitable economic policies are followed. While noting that substantial scope still existedt. for increasing production for the dome~tic market in agriculture and manufacturing, it agr~ed with the Government's evaluation that Ceylon's balance of payments ou~look requi'red increasing ~mphasis o~ exports, including the development of new products for sale abroad, and ·tourism. In this conno.c- tion, the Group welcomed the Government's initiative in seeking an agreement among tea-producing countries to stabilize the price of tea. It reaffirmed its support of Ceylon in the difficult task of st;rengthening the country's economy in the years ahead. "Commitments signed by the Group in 1969 amounted to about $95 million and disbursements were about $65 million, the highest levels since the Aid • Group was formed. On the basis of indications by member countries of their intentions for 1970 and taking.into account undisbursed commitments from prior years, disbursements in 1970 are expected to be larger than in 1969. Several delegations emphasized that in establishing the terms of assist,~ce account, should be taken of Ceylon's need to avoid an excessive debt service burden. The Group recognized the need for substantial external assistance to Ceylon in the future with continued emphasis upon commodity aid. "It was agreed provisionally to meet again early in 1971." - 0 - •