COLOMBO, SRI LANKA - Sri Lanka and the Asian Development Bank (ADB) have agreed on a new Country Partnership Strategy (CPS) for 2012 to 2016 to reduce regional disparities, catalyze private sector participation in development, and remove human resource constraints. The CPS builds on the priorities of government's Development Policy Framework and ADB's Strategy 2020, and also refines the focus of the CPS 2009-2011.
With the restoration of political and economic stability, Sri Lanka faces good prospects for rapid economic growth and development. The economy is expected to continue growing at around 8% in the medium term. However, poor quality infrastructure is a major constraint to sustaining rapid economic growth.
"The aim of the CPS is to assist the government to address major constraints to sustaining inclusive growth in Sri Lanka. To be effective, ADB's operations will be strategically focused on a few sectors. ADB will support infrastructure development that improves connectivity and service delivery to lagging regions, including the former conflict-affected regions of the country," said Narhari Rao, Lead Economist in ADB's Sri Lanka Resident Mission.
To increase the effectiveness of public investment and catalyze private investment, ADB will support the environment for Public-Private Partnerships (PPPs) and early identification of PPP candidate projects.
"ADB's involvement in developing an effective PPP enabling environment will provide synergies between ADB's assistance for infrastructure development and private sector development. ADB will also provide non-sovereign loans to reforming state-owned enterprises to expose them to alternate sources of finance. Private investments will be catalyzed through cofinancing using ADB's credit enhancement products," said Rita O'Sullivan, Country Director of ADB's Sri Lanka Resident Mission.
Human resources are likely to be a critical constraint as demand grows for an educated and skilled labor force. ADB will support skills development with a focus on reducing gender disparities, by expanding and improving the quality of technical and vocational institutes and related infrastructure.
The CPS focuses on four crosscutting themes. Environmental sustainability will be improved by strengthening country safeguard systems, and providing support for climate change adaptation. ADB plans to promote multimodal transport systems to ease road congestion and reduce pollution. Public financial management and public procurement will be strengthened by introducing stringent anticorruption measures and mainstreaming accountability and transparency in ADB's operations.
Gender equity will be promoted by designing projects that are gender-inclusive, especially in the education, health, water and sanitation, and infrastructure sectors. Opportunities to foster regional cooperation will be explored in all interventions especially in the transport and energy sectors, and in climate change initiatives.