Background

June 5, 2008 - Sri Lanka’s strong economic growth has led to rapid poverty reduction in the past five years. Correspondingly, inequality among provinces, visible in the previous decade has also declined. Remarkably, the reported decline in poverty occurred in regions outside the Western Province, closing the large gap seen in 2002 between the Western Province and the rest of the country. Nevertheless, pockets of high poverty still remain in several areas.

Challenge

“The challenge is to accelerate and sustain growth outside the Western Province,” said Naoko Ishii, World Bank Country Director for Sri Lanka. “The lagging regions are isolated from markets and improving access to infrastructure and services are vital to ensure positive development outcomes in these poor and conflict affected region."

Approach

- Finance the reconstruction of 13,615 conflict damaged houses in the North and the East. These will add to the 34,784 conflict-damaged houses in 2,712 villages repaired or completing repairs;

- Improve public administration and public financial management by strengthening and modernizing the Department of Census and Statistics and Auditor General’s Department; and

- Improve educational opportunities of children by enhancing resource allocation and distribution