Concern over government spending in Sri Lanka

GALLE, Sri Lanka, Jan 28, 2007 (AFP) – Sri Lanka’s key international donors will meet in the southern city of Galle on Monday, amid rising concerns that the cash may not be well spent. Escalating violence, allegations of widespread corruption in the disbursement of international aid and its overall economic management could hurt the island’s prospects of attracting more support, diplomats said.

“A bigger government (cabinet of ministers) and the military taking a hardline stand could overshadow the development agenda,” said a western diplomat attending the two-day review by 50 donor nations and lenders.

Sri Lanka plans to convert 1.5 billion dollars in aid pledges received for this year’s development work into firm commitments during the talks in this southern coastal town that was hit by the December 2004 tsunami.

“It is not a pledging conference. We have already lined up donor commitments for a pipeline of infrastructure projects. We hope to convert some of these commitments into firm pledges,” treasury chief Punchi Banda Jayasundera said.

Despite an expected 7.0 percent growth in 2006, Sri Lanka’s 25-billion-dollar economy has come under strain from high military