ADB-Sri Lanka Partnership

Sri Lanka achieved various milestones in 2010: its economy grew 8 percent, the International Monetary Fund upgraded the country to middle-income emerging market status, and poverty levels decreased dramatically from 23 percent in 2002 to 8.9 percent in 2010. And all these happened within a year after a decadeslong war ended in 2009. As Sri Lanka faces a promising future, its challenge now shifts to reconfiguring its policies and further strengthening its institutions to meet the needs of a middle-income country. Past conflict areas must be revitalized in order to realize the nation’s full economic potential. Further, women with elderly dependents and who have been widowed by war must be provided with both financial and psychosocial support to ensure a more comprehensive development. In light of these challenges, the government’s Development Policy Framework has been designed to accelerate economic growth, improve social conditions, eradicate extreme poverty and scale up environmental protection. The Asian Development Bank has likewise patterned its 2012-2016 country partnership strategy after Sri Lanka’s goals, recognizing the need to address key constraints in achieving inclusive and sustainable growth in the country. Funding levels ADB’s total allocation for Sri Lanka for the 2013-2015 period amounts to $926 million. Ordinary capital resources account for $578 million of this amount, while the remaining $348 million comes from the Asian Development Fund. Below is a breakdown of ADB commitments to Sri Lanka from previous years: Click on the table to view a larger version. ADB will leverage its bilateral and multilateral partners in delivering aid to Sri Lanka to increase efficiency and to harmonize the efforts of different stakeholders. The donor agency also intends to engage in co-financing opportunities with the private sector to harness additional resources. Funding priorities ADB’s 2012-2016 country partnership strategy hinges on three principles: - Promoting inclusive and sustainable economic growth. - Catalyzing private investment and enhancing the effectiveness of public investment. - Strengthening human resource and knowledge development. Below is a breakdown of ADB funding by sector of intervention for the 2012-2015 period: Click on the table to view a larger version. ADB places high importance on the rehabilitation of former conflict zones and will continue to address needs in those areas as they arise. ADB’s most recently approved projects include: - Integrated Road Operation and Development Investment Program in Sri Lanka ($1,000,000) — a project aimed at connecting rural communities to business centers and building the capacity of the Road Development Authority. - Greater Colombo Water and Wastewater Management Improvement Investment Program in Sri Lanka – Tranche 2 ($88,000,000) — a project designed to strengthen wastewater services in the Greater Colombo region. - Southern Road Connectivity Project in Sri Lanka ($75,000,000) — a project targeted at catalyzing economic development through the improvement road infrastructure. - Trincomalee Integrated Urban Development Project in Sri Lanka — a project for improving services in urban areas and boosting economic development. Devex analysis Sri Lanka is one of 29 countries eligible for support under the ADF, whose priorities are aligned with ADB’s Strategy 2020: focus on inclusive growth, environmentally sustainable development, regional cooperation and integration. The country is also included in ADB’s South Asia Regional Cooperation Operations Business Plan (2013-2015), which focuses on bolstering the transport sector to improve regional connectivity, fostering energy cooperation between neighboring countries and stepping up trade facilitation to stimulate cross-border commerce. While Sri Lanka exhibits positive socio-economic indicators, the effects of war still pose considerable threats to aid delivery and the country’s progress as a whole. State institutions, having been significantly weakened by the 26-year conflict, remain in need of support to execute development initiatives and provide adequate services to Sri Lankan communities. ADB places high importance on providing the necessary assistance, especially in conflict-affected areas to mitigate such risks. The aid agency will continue to coordinate with its bilateral and multilateral development partners in strengthening the capacity of Sri Lanka’s public institutions. This primarily entails rigorous evaluation of institutional capabilities and provision of technical assistance to government institutions. As the country continues its trajectory toward reaching its targets, Sri Lanka is set to receive sustained levels of funding from ADB through 2016. Though considerable risks remain, ADB is committed to elevating the living standards in Sri Lanka, especially in war-torn communities, to help the country achieve its development goals. Contact: Sri Lanka Resident Mission Tel: (94-11) 267-4499 Fax: (94-11) 267-4488 Join the Devex community and gain access to more in-depth analysis, breaking news and business advice — and a host of other services — on international development, humanitarian aid and global health.