IMF APPROVES US$567 MILLION FOR SRI LANKA
Commends Progress in Peace Negotiations
Funds to Support Governments Economic Program Based On Regaining
The International Monetary Funds (IMF) Executive Board
approved today, a US$567 million credit equivalent to one hundred
percent of quota for Sri Lanka, to support the governments
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 governments 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 IMFs Poverty Reduction
and Growth Facility (PRGF) seeks to increase economic growth and
reduce poverty by supporting the governments economic program
based on Regaining Sri Lanka.
Sugisaki also praised the governments efforts towards economic
reconstruction and decreasing poverty and pointed out: The
governments 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 governments economic reforms:
To fully realize the programs 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:
financing is required to support reforms and reconstruction, as
well as the momentum of the peace process.
Embassy of Sri Lanka
18 April 2003