Sri Lanka: Southern Province Rural Economic Advancement Project

Agriculture, the predominant economic activity in the Southern Province of Sri Lanka, contributed about 30% of provincial gross domestic product and about 48% of jobs. Statistics showed that the level of poverty by province was proportional to the rural share of its population and in the Southern Province, 80% of the population was rural with a poverty level of about 40%. Poverty in the province originated from low productivity in agriculture and sluggish growth of the nonfarm sector. The link of rural areas to poverty was seen as a direct result of inefficient and unproductive agriculture upon which rural populations depend on.

The province has received considerable development assistance but the region continued to remain at a disadvantage. The government recognized that investment in broad-based rural development projects resulted in minimal sustainable impact. It also recognized that primary agriculture production alone was unlikely to generate significant increases in jobs. Moreover, the government needed to improve productivity and market access for small-scale enterprises. On this backdrop, the government decided to move away from the approach of integrated rural development projects to one focused on accelerating economic growth. The new approach emphasized promotion of commercial activities in farm and nonfarm sectors in collaboration with the private sector, which the government called rural economic advancement. The poverty reduction strategy of the ADB also at that time strongly emphasized the development of agriculture and rural sectors in Sri Lanka where poverty was most prevalent.

This report validates the completion report's assessment of the project which aims to expand micro-, small-, and medium-sized enterprises in agriculture-related sectors, provide and maintain key economic infrastructure, and enhance public and private sector capacities to support the process of economic growth in Pakistan. IED overall assessment: Less than successful



This page was generated from on 31 March 2015