Countries and Regions

	Table of Contents
p. 15 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies 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

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IV. Regional Cooperation

87. As an island country with a limited domestic market, Sri Lanka looks to regional organizations such as South Asian Association for Regional Cooperation (SAARC), Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation (BIMSTIC) and Indian Ocean Rim Association for Regional Cooperation (IRO-ARC) as potential avenues to expand markets for its products. Sri Lanka also hopes to fully exploit its locational advantages over the medium- to long-term to establish itself as a regional hub for shipping, aviation and financial services. Trade liberalization under SAARC has made slow progress, although the Sri Lankan Government continues to make reforms. In 1999 there was a major breakthrough in trade negotiations with India when agreement was reached on the removal of trade restrictions on a broad range of goods. ADB through a TA for Trade Promotion (in 2000) will assist the Government to operationalize the trade agreement. Sri Lanka’s participation in BIMSTIC and IRO-ARC has been quite recent, but the Government is hopeful that both initiatives will give priority to opening up markets to enable a freer movement of commodities and services across the Indian Ocean region. The Government indicated that it would welcome the strengthening of ties between ADB, the SAARC Secretariat, and other regional cooperation initiatives. ADB is prepared to assist under the Regional Economic Monitoring Unit the initiatives of the Central Bank Governors under SAARC in developing and exchanging ideas on macro and especially financial policies. ADB is also involved in sub-regional environmental cooperation. ADB is assisting in the development of a SAARC protocol on air quality management and in the development of a regional coastal and marine resource management agreement at request of the South Asian Cooperation on Environment Program (SACEP). Potential opportunities for regional cooperation with the Indian Ocean countries is also being explored with the aim to expand the country’s economic activities and share development experiences.

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