Commends Progress in Peace Negotiations Funds to Support Government’s Economic Program Based On “Regaining Sri Lanka”The International Monetary Fund’s (IMF) Executive Board approved today, a US$567 million credit equivalent to one hundred percent of quota for Sri Lanka, to support the government’s economic program for 2003-2006. Effective immediately, the Sri Lankan government will receive US$81 million. The IMF also commended the significant progress of the government’s peace negotiations and emphasized the need for donor financing to support economic initiatives to strengthen the peace process. This IMF decision was the first contribution to the country right after the seminar hosted by the U.S. Deputy Secretary of State Richard Armitage at the Department of State, ahead of the Tokyo Conference on Reconstruction and Development of Sri Lanka scheduled for June 9 and 10, 2003. At this seminar, the IMF and other donors supported the peace process and expressed strong support for providing Sri Lanka with increased international financial assistance. Shigemitsu Sugisaki, Deputy Managing Director and Acting Chairman of the Executive Board of the IMF said: “Sri Lanka today stands at a pivotal point in its history. Over the past 20 years, a long civil conflict has beleaguered the country, which not only disrupted economic activity, but also hampered the sustained implementation of economic reforms. The current environment, in which peace negotiations are progressing well and economic activity is picking up, provides an excellent opportunity for Sri Lanka to implement deeper economic reforms and put the economy on a path of sustained high growth.” Sri Lankan Ambassador to the U.S., Devinda Subasinghe welcomed the decision and said: “The decision of the IMF today, the largest ever IMF commitment to Sri Lanka, is a testimony of actual support the international community is giving to Sri Lanka as the government pursues the path of peace and economic growth. This credit, the first commitment of financial support following the U.S. government hosted seminar earlier this week, reinforces the international statements of support for the gains we have achieved by providing the economic foundations for peace.” The credit arrangement, under the IMF’s Poverty Reduction and Growth Facility (PRGF) seeks to increase economic growth and reduce poverty by supporting the government’s economic program based on “Regaining Sri Lanka”. Sugisaki also praised the government’s efforts towards economic reconstruction and decreasing poverty and pointed out: “The government’s attention to reducing conflict-related and rural poverty is well placed. The implementation of plans to strengthen rural infrastructure and improve access of the poor to quality education and health services are appropriate and necessary steps.” Sugisaki also noted as well the government’s economic reforms: “To fully realize the program’s medium-term objectives for growth and poverty reduction, lasting peace is necessary. The authorities are fully committed to the program and have embarked on difficult reforms, while making strong efforts to preserve public support for the peace process.” He also emphasized the need for donor financing and said: “…continued donor financing is required to support reforms and reconstruction, as well as the momentum of the peace process”. Embassy of Sri Lanka Washington DC USA 18 April 2003
Meeting Reinforces U.S. - Sri Lanka Economic and Trade RelationsU.S. Commerce Secretary Donald Evans and Deputy Secretary Samuel Bodman met with Sri Lankan Minister for Economic Reform Milinda Moragoda to discuss the progress of the peace process and the pace of economic reforms in Sri Lanka, in Washington, D.C. on Wednesday, April 14. Secretary Evans commended the Sri Lankan government for the significant progress achieved in opening the economy, implementing economic reforms, and in the negotiations on the Trade and Investment Framework Agreement (TIFA) between the U.S. and Sri Lanka. The TIFA provides an arrangement for expanded economic relations between the two countries and is usually the first step towards a Free Trade Agreement. U.S. Secretary of Commerce Don Evans pledged the support to the U.S. government to enhance closer commercial and business ties between the two countries. During the meeting, Moragoda emphasized Sri Lanka's desire to strengthen bilateral trade relations between the U.S. and Sri Lanka, and underscored the country's eagerness to attract U.S. investments in sectors such as infrastructure, in the Information Communication Technology (ICT) industry, shared services/call centers and back office operations. In addition, Moragoda stressed the importance of economic development as a critical factor for the success of the Sri Lankan peace process. He also pointed out that the TIFA process would further accelerate economic reform in Sri Lanka and highlighted the government's economic program which includes deregulation, privatization, public sector reforms, among other initiatives. Moragoda emphasized the strategic importance of Sri Lanka as the economic gateway to the Indian subcontinent, especially India. "We would like to help you [Sri Lanka] help yourself by introducing potential trade and investment partners," said U.S. Deputy Secretary Bodman. In reinforcing the relationship between the U.S. and Sri Lanka, Moragoda said: "I am positive that a partnership between the U.S. and Sri Lanka will bring great success to both sides." Talks are also underway to create a U.S. - Sri Lanka Business Council in the United States. Sri Lankan Ambassador Devinda Subasinghe indicated that the Washington Embassy of Sri Lanka is working closely with Tom Donohue, president of the U.S. Chamber of Commerce to organize the Council and to advance the TIFA process. Subasinghe indicated that Sri Lanka is working to expand the membership of the Sri Lankan Congressional Caucus with a trade focus. The meeting was attended by members of the U.S. Department of Commerce including, by Michael Hutchinson, Deputy Assistant Secretary for Textiles, Apparel and Consumer Goods; Molly K. Williamson, Deputy Assistant Secretary Africa and Middle East; and Ariadne Benaissa, International Trade Specialist. Minister Moragoda was assisted by Ambassador Devinda R Subasinghe, Minister (Commerce) Saman Udagedara and First Secretary (Economic) Siranthani Gopallawa. Embassy of Sri Lanka Washington DC USA 17 April 2003
- There are some 1 million land-mines scattered in unmarked areas, that need to be located and neutralized.
- Whole towns and villages need to be re-built and their basic services restored.
- There are an estimated 1 million internally displaced persons, currently accommodated in camps, or staying with relatives. They desperately need shelter and simple equipment to till the soil.
- Many schools have been destroyed or damaged in conflict-affected areas, while schools in other parts of the country have suffered severely from a chronic lack of funds. Sri Lanka is proud of its achievements in education, and its high literacy rates. Access to good schools has been of enormous significance to our people. But unless urgent action is taken to restore the quality of our schools, we shall risk squandering our achievements in this field, and having to deal with a "lost generation" of inadequately educated youth.
- One of the greatest challenges that we must face is getting people back to work throughout the island. In addition, it has been our experience that whenever people have remained in refugee camps for long periods without hope and regular employment, they tend to become inured to a culture of dependency. But, with very little assistance they can be encouraged to resume their livelihoods as fishermen, farmers, and small traders. The social returns on such small investments will be very large, and the rehabilitation of these sections of our population will be essential if we are to achieve a lasting peace.