Announcement of Sri Lanka Receives 4.5 Million Dollars for Industry and Tourism on June 30, 1975

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET.NW WASHINGTON D C 20433 TELEPHONE: EXECUTIVE: 3-6360 IDA NEWS RELEASE NO. 75/48 JUNE 30, 1975 SRI LANKA RECEIVES $4.5 MILLION FOR INDUSTRY & TOURISM Development of industry and tourism in Sri Lanka will be assisted by a credit of $4.5 million from the International Development Association (IDA), an affiliate of the World Bank. The credit will meet the estimated foreign exchange requirements of the Development Finance Corporation of Ceylon (DFCC) over the next two· years for lending. mainly to export-oriented industries and tourism. These sectors have high priority because of their foreign ex- change earning potential. Sri Lanka's industrial sector contributes about 13% of GDP and • provides employment for about 410,000 people or about 11% of total employment . The Government places primary emphasis on reorienting industrial activity towards exports, promoting labor-intensive projects and encouraging small- scale enterprises. The tourism sector in Sri Lanka has achieved a rapid growth since mid-1960s. Tourist arrivals increased from 19,000 in 1966 to 78,000 in 1973, an average annual growth of 22%. Although growth is expected to slow down some, prospects of tourism in Sri Lanka remain good. DFCC was established in 1955 with World Bank assistance. It has financed about 177 projects involving a total investment of some $23 million. About half of this amount had gone to food processinf<i chemicals, textiles and tourism projects. DFCC expects to cormnit about $7 million (including $4.5 million in foreign exchange) during the next two years. The IDA credit will be used mainly to cover the direct cost of capital goods imported for projects financed by DFCC. The IDA credit to Sri ~anka will be for a term of 50 years, including 10 years of grace. It will be interest-free, except for a service charge of 3/4 of 1% to meet IDA's administrative costs. The Government will relend • the pr~ceeds to DFCC at 8.5% per annum . Note: Money figures are expressed in US dollar equivalents.