L·JNTERNATIONAL BANK FOR
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•       RECONSTRUCTION AND pEVELOPMENT
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        1818 H STREET, N.W., WASHINGTON     D. C. 2041~3    TELEPHONE: i::XECUTIVE 3-6360




              April 29, 1971                          Subject:     Ceylon Aid Group Meeting

                   The following announcement was made today by the European Office of
              the World Bank in Paris:

                   "The seventh meeting of the Ceylon Aid Group was held in Paris on

              April 28 and 29 under the Chairmanship of the World Bank.              The following

              countries were represented:     Australia, Canada, France, Germany, Japan,

              the United Kingdo~ and the United States.          Representativesof the International

              Monetary Fund, the Asian Development Bank, the United Nations Development




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              Programme, the Organisation for Economic Co-operation and Development and

              observers from Denmark, India, Italy and Sweden also attended, of which Sweden

             was represented for the first time.          The Ceylon Delegation was led by

              Dr. H.A. de S. Gmasekera, Permanent Secretary of the Ministry of Planning

             and Employment.   Representatives of Aid Group members also met with
             Dr. N.M. Perera, Ceylon's Minister of Finance.

                  "The Group reviewed Ceylon's econou:dc situation and outlook.             With

             export earnings at a level 15% below that of 1965,and despite the continuing

             advance in increasing domestic production o(j food to replace imports, it noted

             that: Ceylon.'s exchange situation remained very tight.           The Group viewed this

             as tne dominant problem of the economy whose resolution required continuing
             action by the Government and support from abroad.




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Ceylon Aid Group Meeting

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     "The Group agreed with the Government's evaluation that strong emphasis

needed to be given to agricultural development to enable Ceylon to reduce.

food iu1ports further and to increase production for export.              It welcomed the

Government's intention to undertake majo~l new initiatives in the promotion
of exports.

     "The Ceylon Delegation described the Government's objectives with

r~spect to economic growth and employment and outlined the major elements

in the Government's evolving strategy for achieving these objectives.                It

stressed that to a large extent success would depend on continuing support

from the Group.              The Group endorsed the development strategy outlined by the

Ceylon Delegation which will transfer the emphasis from consumption to

production.               The Group appreciated that the pace at which the Government's

development strategy could be carried out would be affected materially by the

political situation in the country.
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      "The Group agreed that, in the context of the Government's development

strategy, Ceylon needed substantial external assistance, with continuing
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emphasis on commo<lity aid.             On the basis of indications by membe'r countries
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and agencies of their intentions for 1971 and taking into account undisbursed

commitments from prior years, disbursements in 1971 are expected to be some-

what higher than in 1970.

      "It was agreed provisionally to meet again early in 1972."




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