Countries and Regions

	Table of Contents
p. 11 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Operations IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Sri Lanka : III. Sector Strategies

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C. Social Infrastructure and Environment

1. Education

71. As noted in Chapter I, Sri Lanka has impressive human development indicators (paragraphs 27-28). However, there are signs that the quality and efficiency of the education system has deteriorated. Improving the access to and quality of basic and formal education and vocational training to create skills that are essential for modern economic progress and poverty reduction are primary objectives of the education reforms led by the Presidential Task Forces in recent years. In basic education, the Government has recently enacted legislation to make education compulsory through age 14 to enforce universal basic education, and is aiming to extend compulsory education to age 16 to improve educational opportunities especially for disadvantaged students in rural areas. Reforms in general education focus on extending educational opportunities to reduce inequalities between students attending full curriculum and limited curriculum schools, improving quality through improved curriculum relevance, teaching and educational management, and resource provision.

72. Reforms in university education emphasizes expansion of university education, diversification of university courses and curriculum reform to develop employable skills for private sector employment, provision of career guidance for students, partial cost recovery and regulated private education for improved quality and sustainability, and improved university administration and management. In vocational training and technical education, reforms have been aimed at increasing the role of private sector participation and private-public partnership in technical and vocational training to enable all those who do not seek higher education to develop skills required by the labor market.

573. Consistent with the strategic objectives of the COS, ADB’s proposed assistance for the sector in the period 2001-2003 includes technical assistance and loans to improve the efficiency and output of the sector and to attain a better match between the quality and skill level of the labor force and the human resource requirements of the modernizing economy. In addition, the ADB has continued policy dialogue with the Government on the sector, specifically with regard to internal and external efficiency as well as private sector participation in the sector. Following the approval of a loan for Skills Development in 1999²², the proposed loans for the sector include a Secondary Education Modernization in 2000 and Post-Secondary Education Development in 2002.

2. Water Supply and Sanitation

74. The Government aims to provide safe drinking water to all by 2010. The sector strategy includes community water supply programs and rural water and sanitation schemes covering operation and maintenance as well as opening selected urban areas for private sector to operate on a BOO/BOT basis to supplement public investments as announced by the Government in its 2000 Budget Speech. A regulatory body is being established under the ADB-assisted Third Water Supply and Sanitation Sector Project²³ to, among other things, regulate private sector participation. Major tariff revisions are scheduled for 1 December 2000, with a view to maintaining the National Water Supply and Drainage Board as a financially viable institution. The conflict of water rights between irrigation and domestic water supplies will be resolved through integrated water resources management under the National Water Resources Authority to be established under the National Water Resources Act by 2001 with ADB assistance²⁴.

75. It is proposed to continue the ADB’s partnership with the Government and the local communities to address unmet sector investments outside the Colombo region and provision has been made for this in the operational program. The proposed programs in the medium term include the Secondary Towns Water Supply and Sanitation in 2002, to be prepared by a PPTA in 2000, and an ADTA for Strengthening of Regulatory Framework in Water Supply and Sanitation in 2001. The proposed loan project will be the fourth such project assisted by ADB (the first two projects were successfully completed and the third project is expected to be completed by 2002).

3. Urban Development and Environment

76. The dominance of the Greater Colombo region has resulted in Colombo’s infrastructure being overburdened. At the same time, secondary towns are deprived of a growth impetus because investment and employment opportunities are drawn to Colombo. The Government accords high priority to urban development with focus on (i) physical investment to improve especially the urban poor’s access to basic infrastructure and services, and (ii) strengthening the technical and financial capabilities of urban local authorities for improved management and sector efficiency. Greater responsibilities have been devolved to urban local authorities for provision and financing of urban infrastructure and municipal services to facilitate participation of beneficiary communities and sustainable development of urban infrastructure and services. Accordingly, ADB’s strategy is to improve the infrastructure and services of the main urban centers outside Colombo, and at the same time upgrade the road network that links the towns with the rest of the economy. A crucial element in the successful application of this strategy is to ensure that new or improved infrastructure is efficiently operated and maintained and that the management and financial capacity of the responsible urban administrations is sufficient to sustain the urban infrastructure and services.

77. ADB approved the Urban Development and Low Income Housing Project in 1998²⁵ to improve the urban infrastructure in the country’s secondary towns. However, the needs of the urban sector are substantial. Subject to satisfactory performance of the ongoing project, the proposed loan and TA program include provision for a follow-up PPTA for Secondary Towns Infrastructure Improvement in 2001, to prepare a loan project in 2003, and a PPTA for Housing Finance in 2002. The basic principles that govern ADB’s support for the sector include (i) continued strong commitment and ownership at the national and local government levels for the reform and capacity building process, (ii) ADB’s role as a change agent in facilitating policy and institutional reforms, and (iii) equity (both socioeconomic and gender) considerations in the selection of urban projects for financing.

78. The increasing production outputs of manufacturing industries have been associated with increased environmental costs. The country’s environmental indicator indicates that the level of waste emissions from industrial activities cannot be ignored. The health impacts of industrial pollution are heightened by the fact that industries are concentrated in urban areas and other areas with high population densities (i.e. Colombo and Gampaha district in the Western Province). With growing congestion and pollution in the urban centers, it will become increasingly difficult for the country to compete for foreign direct investments. Therefore, the challenge facing the country is how to promote industrial development with minimal adverse environmental impacts.

79. The Government has adopted several approaches including proper industrial zoning to locate industries having common pollution control abatement costs together in the same zone, licensing for waste discharge, low-interest loans and tax waivers for pollution abatement equipment. However, such approaches to deal with pollution problems heavily depend on treating wastes that is very costly. To achieve the objective of reducing pollution at the least cost, and at the same time, enhance industrial efficiency, productivity and competitiveness, the Government is increasingly focusing on cleaner production. Accordingly, an ADTA for Cleaner Production (in 2001) has been included to assist the Government in formulating strategies and policies to implement cleaner production in the industry sector, while investment frameworks would be prepared through a PPTA for Cleaner Production in 2002.

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