Support for infrastructure-led growth, lagging regions, and high quality service delivery is the focus of the World Bank Group's Country Assistance Strategy (CAS) for Sri Lanka for the period July 2008 to June 2011. The envisaged lending package of US$900 million for the Sri Lanka CAS was endorsed by the World Bank’s Executive Directors at a meeting on June 5.

The CAS is aligned with Mahinda Chintana, the government's 10-year economic development framework which aims at accelerating growth, with particular emphasis on equitable development.

The strategy is focused on three objectives: The first is to expand economic opportunities in lagging regions to achieve more balanced growth by supporting rehabilitation of roads, irrigation networks, and water supply. Second, the CAS centres on improving the investment climate and competitiveness to encourage private sector investments and growth. The third objective is to enhance quality services and accountability to improve education, health, social safety nets, and environmental protection.

A substantive share of the resources during this CAS period is devoted to roads, particularly the provincial roads to improve inter connectivity among regions to facilitate faster development in the lagging regions'.

The design of the CAS is based on extensive consultations both with the government and with a broad cross-section of Sri Lankan society across many parts of the country.

"The assistance strategy aims to sustain the impressive poverty reduction that Sri Lanka has achieved the last five years," said Naoko Ishii, World Bank Country Director for Sri Lanka, adding: "The CAS is designed to deliver positive development outcomes in poor and underserved areas, including the conflict-affected North and the East."

The CAS will systematically ensure conflict sensitivity in design, implementation, monitoring and evaluation of Bank-funded activities. For example, the Bank’s education programmes will support the teaching of English as a link language, working towards mixed Tamil-Sinhalese schooling, and teacher education and training. The aim is to encourage members of different ethnic groups to work together around common goals in community driven development initiatives.

The CAS also notes the importance of enhancing macroeconomic stability for achieving higher long term economic growth and for enabling Sri Lanka to better meet the challenges of the recent steep increase in international commodity prices. The World Bank intends to engage in close dialogue with the government on this issue in the coming period.

The credits are from the International Development Association (IDA), the World Bank's concessionary lending arm, and have 20 years to maturity with a 10-year grace period and zero interest, according to a World Bank statement.