A research study submitted in pa1iial fulfillment of the requirements for the degree of Master of Business Administration, School of Management

Government of Sri Lanka and its development partners made several attempt with different policies for poverty reduction. But the past strategies had not delivered desirable results and have the need to search for new and more inclusive efforts to reduce pove1ty. It is also evident that poverty alleviation sh·ategies have not been integrated with the mainstream development efforts and therefore do not offer a sh·uctured and systematic solution to the problem of pove1ty Government faces severe fiscal consh·aints. As a result, it will not be possible to launch special poverty-reduction oriented programs without external assistance. To ensure that adequate oppoitunities are created for the poor to paiticipate in the growth process, foreign aid sh·ategies should be in a way that explicitly incorporates pove1ty reduction objectives. In implementing the poverty reduction strategies, Sri Lankan governments have focused historically more on human resource development and poverty alleviation than on economic growth. Growth promoting policies have been implemented unevenly, and insufficient emphasis has been given to sh·uctural reforms in areas such as agriculture, finance, public enterprises, and infrash·ucture. Economic growth over the last 15 years was only 4.5 percent annually, and not broad-based enough to realize a breakthrough in poverty reduction. Progress in poverty reduction in the early 1990s has been slow despite considerable public support provided to many anti-poverty programs. Large regional variations in pove1ty remain in Sri Lanka. This research study proposes few recommendations to improve the existing policies, strategies and procedure for sustained poverty reduction with external assistance. This is based on a review of past and present poverty-related policies, a poverty assessment, an analysis of the evolving institutional framework for delivering pove1ty-related programmes, pro-poor pove1ty reduction strategies, and the policies & priorities of donor community.