Announcement of Sri Lanka Consortium on June 22, 1984

- ·t=oR IMMEDIATE RELEASE ·world Bank 1818 H Street, N.W ., Was hington, D.C. 20433 , U.S.A.• Telephone : (202 ) 477-1234 BANK NEWS RELEASE Contact: Pushpa N. Schwartz June 22, 1984 (202) 477-3651 SRI LANKA CONSORTIUM The following announcement was issued by the World Bank's European Office in Paris: The twelfth meeting of the Sri Lanka Aid Group was held in Paris on June 21, 1984, 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 the European Communities, the Inter nat i onal Monetary Fund, the United Nations Development Programme, as well as observers from Belgium, Switzerland, DAC/OECD and the International Fund for Agricultural Developemnt also attended. The Sri Lanka delegation was led by Mr. Ronnie de Mel, Minister of Finance and Planning. The discussion focussed on the economic gains made by Sri Lanka over the past six years, the accompanying strains on the budget and balance of payments and the ~dium-term outlook. The leader of the Sri Lanka delegation noted that during the period ahead the country intends to consolidate and build on recent gains. The government's current stabilization policies are producing resutls and are expected to lead to a substantial surplus in the balance of payments in 1984. Sri Lanka is helped in its stabilization efforts by the prevailing high tea prices and the government is determined to use these favorable export prices to build up reserves so as to be able to support structural change in the coming years. In order to accomplish this, resource allocation will be based on clear priorities. No project will be undertaken by the state sector if it can be handled better by the private sector. Operation and mmaintenance expenditures are to take preference over new investments. The center-piece of the public investment program will be the rehabilitation of the public plantation sector. Other high priority areas will be road rehabilitation and maintenance, agricultural diversification and energy development. The participants in the aid group meeting commended Sri Lanka on its achievements over the last few years. They were encouraged by the government's recent measures to bring about tighter fiscal discipline and to establish criteria for improved public sector spending. They urged the government to move ahead dynamically implementing appropriate policy measures to correct the structural weaknesses of the economy, enhance the growth of exports and promote private sector industrial development. They reaffirmed their continued support to Sri Lanka's development efforts.