Bitter Pill

Sri Lanka's ongoing political instability, poor infrastructure and limited access to capital are choking the country's investment climate, a joint study by the Asian Development Bank and World Bank said.









Sri Lanka's ongoing political instability, poor infrastructure and limited access to capital are choking the country's investment climate, a joint study by the Asian Development Bank and World Bank said. However, a permanent peace deal remains the elusive key to lift the island nation's investment climate from its present doldrums, notes Sri Lanka's multilateral lending agencies in a report to be launched on Tuesday.

"Achieving a permanent peace is undoubtedly one of the important steps Sri Lanka can take toward improving its investment climate," said Peter Harrold, World Bank Country Director for Sri Lanka. "If we are to achieve sustainable poverty reduction in Sri Lanka, we must raise the overall level of investment.

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The report comes in the midst of Sri Lanka's deepening political crisis, with the coalition government reduced to a minority this month, for signing a tsunami aid sharing deal with the Tamil Tiger rebels last Friday.

The December 26 tsunami killed some 31,000 people and left