LK-PRSC

The Poverty Reduction Support Credit (PRSC) is designed to support the implementation of Sri Lanka's Poverty Reduction Strategy (PRS) as articulated in Regaining Sri Lanka: Vision and Strategy for Accelerated Development, which was discussed by the Board on April 1, 2003. This operation, PRSC I, is the first of a series of annual PRSCs within a rolling four-year horizon, overlapping with Sri Lanka's PRS period. Consistent with the objectives and priorities of Sri Lanka's PRS, the PRSCs would support reforms in two major areas: (i) accelerating economic growth and supporting private sector development; and (ii) strengthening governance in the public sector and improving the welfare system. The PRSC will help the Government to: (i) move forward with the structural reforms, create conditions for accelerating economic growth, and send a strong signal to the private sector; (ii) continue fiscal consolidation and also have some fiscal space for the priority PRS programs; and (iii) improve public sector governance, and strengthen institutional framework and capacity in the management of public resources. These developments would also lead to improvements in the poverty-focus of public expenditures.