Govt follows broad agenda to raise economic growth - Patel

The Rata Perata program of July 2004 set out a broad agenda intended to raise economic growth while taking measures to ensure that the poor could participate in the growth process and the international community is looking forward to a renewed focus on a poverty reduction strategy centred on accelerating economic growth for all Sri Lankans, especially those living in rural areas, Praful Patel, Vice President, World Bank said yesterday.

Addressing the Sri Lanka Development Forum in Kandy, Patel said: "It is of course only right that we focus on tsunami recovery as this continues to consume so much of our collective energy.

It remains a formidable challenge. It now appears to be the case that financing the recovery will not be difficult. We perhaps already have all the pledges we need. We hope that we will not concern ourselves with tsunami fund-raising. The challenge before us now-and on which we can use this valuable time together to focus our minds sharply is implementation."

The text of his speech: "Here in Kandy, this lush and historic hill capital of Sri Lanka's last kingdom, we are a long way from the sea. But not a single Sri Lankan was untouched on December 26 when the island's waters turned on the land so unexpectedly.

The world mourned with you and let me begin today by expressing the deepest sympathy of the entire international community to all the citizens of Sri Lanka. For whether you were at the coast or on higher ground this tragic event reached into every community across the island. Our condolences to all who lost family, friends and colleagues. We too at the World Bank mourn the loss of a dear colleagues from our Colombo Office and staff across our global institution mourn loved ones, showing the reach of this island nation across the world.

I am honoured to be addressing this opening session of the 2005 Sri Lanka Development Forum on behalf of your Development Partners. This is the first time that the full Development Forum is being held in Sri Lanka, and that it is being chaired by the Minister of Finance.

Strong ownership of processes like these by the Government marks significant progress in Sri Lanka's relationship with the international community.

We have before us an important and packed agenda. What do we hope to achieve in this Forum? Permit me to address some of the key themes, and our aspirations for what may emerge from our deliberations.

* Getting people back into homes is perhaps the biggest challenge of all. I hope we can have a good debate on

* Transition housing needs and approaches;

* On the question of acquisition and allocation of land for resettlement- housing;

* On the challenge of the buffer zone and how to apply it with practicality and humanity; and

* On how to involve the affected population in their own future.

* Consultation arrangements with local populations are a key challenge, as is the question of subsidiarity and the role of local levels of government.

* Coordination at the central and local levels remains a core element of our joint preoccupations. Increasingly, we must find ways to involve donors, NGOs and the private sector collectively in discussions and planning with government at all levels. The factor that distinguishes this disaster from all previous ones is that private financing of the recovery may account for up to half of the total. We must ensure that the allocation of funds is driven by needs, and needs alone, and takes account of the difficult factors in Sri Lanka that complicate this, notably the conflict and ethnic balances.

* Accountability remains an area where we will together have to rise to higher standards. Extraordinary sums have been made available from extraordinary sources touched by the scale of the tragedy. The challenge is to think of innovative ways of ensuring the good governance of these funds.

Many of these factors are embedded in the Guiding Principles we have adopted together to govern our approach to the implementation of the recovery program. It is our hope that by the end of our deliberations here we will have agreed how we move forward together in these key areas.

As your development partners, we look to the government to provide a sound macroeconomic framework into which we provide our financial support. Your Budget for 2005 recognised the key challenges that you are facing: raising revenue to more reasonable levels to permit you to address your development needs; and increasing the productivity and impact of your public expenditure with a medium-term policy framework.

The Rebuilding of Sri Lanka and a successful attack on poverty require economic stability. Clearly, the tsunami has had a deep impact on your plans. The development partners hope to learn more about your economic policy plans, and how you will tackle some difficult challenges, notably the fiscal deficit and inflationary pressures.

Sri Lanka has had an enviable record in human development since Independence. It is a concern then that not all the Millennium Development Goals, which Sri Lanka has adopted, are on track to be achieved. Most important, the growing inequality in Sri Lanka deriving from the concentration of economic growth in the Western Province has left many far behind. While the level of poverty in urban areas has been falling sharply, there has essentially been no change in the situation of the rural poor over the last 12 years - no change.

We look forward to learning more about the specifics of such a program and about a consultation framework that will ensure its acceptability to the population.

The final topic for our deliberations is partnership and the peace process. For many development partners, the peace process is at the core of their interest in Sri Lanka. For others, such as the international financial institutions, our deep interest in the peace process is because it is only through a sustainable peace that we can hope to see the prospects of development and poverty reduction for all Sri Lankans. Let me make two key points in this regard.

First, we congratulate all parties for the maintenance of the Ceasefire Agreement for more than three years, and for continued efforts, however imperfect, to implement the Action Plan for Children for the last two years. These are two cornerstones that must be protected.

Second, we have all noted the efforts of the parties to the conflict to reach agreement on a Joint Mechanism for managing tsunami assistance in Sri Lanka. The Development partners are supportive of these efforts and wish the parties success as you go forward.

The Muslim, Sinhalese and Tamil communities have all suffered terribly, and it is only right that ways be found for the representatives of the three ethnic communities to co-operate in this important work. It is the fervent hope of the international community that any such agreement will create an environment conducive to the deepening of the peace process over time.

When we get to our discussions, I hope that they will be open and fruitful; that they will be in the spirit of friends sharing thoughts on core and fundamental issues. We are not here to read statements to each other, but to express our views and exchange ideas.

Let us resolve that we will emerge from these two days with a clear understanding and agreement on the way forward on these four critical areas: on tsunami recovery, on economic policy, on poverty strategy and on partnership and peace.

From such a common platform we can then move boldly to implementation and action, and in so doing, offer hope that tomorrow will be better than yesterday for all the citizens of Sri Lanka."