Announcement of Sri Lanka Aid Group Meeting held on June 20, 1983

FOR IMMEDIATE RELEASE World Bank PRESS RELEASE FOR IMMEDIATE PUBLICATION June 20, 1983 SRI LANKA AID GROUP MEETING The following announcement was issued at the World Bank's European office in Paris. The nineteenth meeting of the Sri Lanka Aid Group was held in Paris on June 16, 1983, under the chairmanship of the World Bank. The following countries were represented: Australia, Canada, Denmark, Finland, France, the Federal Republic of Germany, Japan, The Netherlands, Norway, Sweden, the United Kingdom and the United States. Representatives of the Asian Development Bank, the Commission of European Communities, the International Monetary Fund, the United Nations Development Programme, as well as observers from Belgium, India, Italy, Switzerland, DAC/OECD and the International Fund for Agricultural Development, attended. The Sri Lankan delegation was led by Mr. Ronnie de Mel, Minister of Finance and Planning. The meeting focused on the government's policies and programs to maintain the momentum of economic growth and on the 1983-87 public investment program. The leader of the Sri Lanka delegation noted that despite an adverse international economic climate and deterioration in the terms of trade, Sri Lanka had managed to attain an average economic growth rate of 6.2% during 1978-82. This achievement had been accompanied by significant gains in employment. The stabilization policies introduced during 1981 and 1982, following the emergence of large budgetary and balance-of-payments deficits in 1980, were gradually showing signs of success. During 1983, the government has taken additiona l measures to mobilize domestic resources and restrain expenditures. The government expects to reduce budgetary and balance-of-payments deficits and inflation in the , medium term. Its priorities during the coming years are to emphasize quick-yielding and export-oriented investments. Special emphasis will be placed on the development of exports, particularly in the private sector. The measures that are being taken for the promotion of these sectors include the provision of adequate incentives and infrastructure, implementation of a comprehensive investment program for the publicly-owned estates in the tree-crop subsector, provision of adequate financial resources, promotion of joint ventures with foreign investors, and over-all, the creation of a climate more conducive to dynamic private sector activity. I . ..  - 2 - Members of the Aid Group commended the Government of Sri Lanka on the successes of its development strategy during the last few years. However, members expressed concern that large deficits in the budget and balance-of-payments, and the growing debt burden could pose a threat to the gains already made, and encourged the government to pursue vigorously its policy initiatives to achieve a sustainable budgetary and balance-of-payments position in the medium term. It was agreed that furthe r efforts are needed to contain the growth of public expenditures and mobilize additional resources. Members welcomed the government's decision not to initiate unplanned new projects in 1983 and 1984. Several members emphasized the ueed to review the distributional impact of the government's stabilization and growth-oriented policy measures. t~mbers also stressed the importance of accelerating efforts to promote private sector development and the export sector. Donors agreed to explore the possibility of providing larger commodity and other quick-disbursing aid. The participants in the meeting reaffirmed their continued support for Sri Lanka's development efforts and provided indications of substantial aid for 1983. -0- 039-01 0272 nuces, Ms. Brisitte IMF 530