Sri Lanka Pre-Donor Summit

Thank you.

Speakers this morning have made clear the critical importance of the peace process to the future of the people of Sri Lanka. Peace is the only path that can lead the country forward and enable the legitimate aspirations of all Sri Lankans to be addressed. The peace process must succeed, and we in the donor community have an important role in seeing that it does succeed.

Timely reconstruction and broad-based growth are essential to national reconciliation and long-term development. Thus, we strongly endorse the economic reform program set forth in the Government's Regaining Sri Lanka as the basis for moving ahead.

We are committed to supporting these reforms and expect to give solid backing to them at the Donor's Conference planned for Tokyo in June. We are confident that the donor community will respond as well. We look forward to working with the World Bank, the Asian Development Bank and other members of the donor community in this respect.

There are several areas of the Government's strategy that we believe deserve special attention and support.

As pointed out in Regaining Sri Lanka, maintaining a sustainable fiscal position is critical to achieving economic growth and reducing poverty. The Government is correct in emphasizing the need to improve revenue collection. But maintaining a positive investment climate, broadening the tax base and reducing military spending are equally important. So, too, is improving management of public expenditures, and implementing the government's privatization strategy. Reform of the agriculture sector will improve rural incomes and the well-being of a significant segment of the country's population.

We also believe that Sri Lanka will benefit substantially from establishing trade policies that meet World Trade Organization standards in areas such as Intellectual Property Rights enforcement, and Sanitary and Phytosanitary Standards. Donor support for trade capacity building will be important in this effort.

For many years, Sri Lanka has led the region in progressive social sector reform. The ability of Sri Lanka to achieve - given its moderate level of GDP per capita - significant levels of health status and education attainment for its population is an important achievement. Capitalizing on these gains to spur widespread economic growth is the next step. Ensuring that those gains, however, are distributed throughout the country is crucial. Leveraging the high literacy rates into a workforce that is trained to meet the needs of the private sector, will boost overall productivity. The peace process provides an opportunity to address the needs of otherwise marginalized areas. Linking these areas with the rest of the country will demonstrate that the peace dividend is real and that it extends across Sri Lanka.

With the development of the peace process and the elaboration of an excellent economic reform strategy, Sri Lanka has taken important steps toward a better future for every Sri Lankan citizen. It is our hope, therefore, that the Tokyo Conference will generate the support that the people and the Government of Sri Lanka have earned.

Thank you.