Sri Lanka''s key financial backers said Monday that the agreement to revive talks will help reconstruction but there would be no significant foreign investment until lasting peace was achieved.
Security fears are slowing investment which in turn will mean the island economy will grow around 4-6 percent in 2006 rather than the 8 percent the government is targeting, the World Bank said.
"We haven''t got a security and a peace framework in which people have full confidence at this time," the World Bank''s country director for Sri Lanka, Peter Harrold, told reporters before the talk dates were announced.
He said Sri Lanka had maintained an average growth rate of five percent even during the height of fighting, but real peace was essential to attract serious investments: "Sri Lanka has demonstrated a capacity to grow at no less than 4 percent and not more than 6 percent when conditions with respect to the conflict are not deteriorating sharply."
"You can more or less count on something between 4-6 percent being something achievable," he added. "It will take a sustained rise in investment to see a sustained 8 percent growth. We haven''t got a security framework that people are going to have full confidence in."
The government and the Tamil Tigers have agreed to hold peace talks in Geneva in a bid to head off escalating violence that threatens to reignite the decades long civil war that killed over 64,000 people up until a 2002 truce, but the foes are still at odds over when to hold them.
Earlier, the major international donors pledged their commitment to upcoming peace talks but warned that recent violence could hamper development projects.
In a joint statement, the World Bank and Asian Development Bank said that a successful outcome to the talks - scheduled to take place later this month in Switzerland - will be essential for Sri Lanka''s growth and post-tsunami reconstruction.
"The two country directors wish to reiterate their commitment to playing their appropriate roles in supporting the peace process in Sri Lanka," Peter Harold and ADB chief Alessandro Pio said in the statement.
Pio told reporters that, despite recent unrest, the banks have kept up their projects to help rebuild Sri Lanka in the wake of the massive December 2004 tsunami that ravaged much of the coastline and killed some 35,000 people.
"But it is more difficult for larger scale projects, uncertainty makes it difficult," he said, adding that he hopes the talks in Geneva will resolve the lingering conflict, making it easier for the agencies to proceed with their projects.
Security fears are slowing investment which in turn will mean the island economy will grow around 4-6 percent in 2006 rather than the 8 percent the government is targeting, the World Bank said.
"We haven''t got a security and a peace framework in which people have full confidence at this time," the World Bank''s country director for Sri Lanka, Peter Harrold, told reporters before the talk dates were announced.
He said Sri Lanka had maintained an average growth rate of five percent even during the height of fighting, but real peace was essential to attract serious investments: "Sri Lanka has demonstrated a capacity to grow at no less than 4 percent and not more than 6 percent when conditions with respect to the conflict are not deteriorating sharply."
"You can more or less count on something between 4-6 percent being something achievable," he added. "It will take a sustained rise in investment to see a sustained 8 percent growth. We haven''t got a security framework that people are going to have full confidence in."
The government and the Tamil Tigers have agreed to hold peace talks in Geneva in a bid to head off escalating violence that threatens to reignite the decades long civil war that killed over 64,000 people up until a 2002 truce, but the foes are still at odds over when to hold them.
Earlier, the major international donors pledged their commitment to upcoming peace talks but warned that recent violence could hamper development projects.
In a joint statement, the World Bank and Asian Development Bank said that a successful outcome to the talks - scheduled to take place later this month in Switzerland - will be essential for Sri Lanka''s growth and post-tsunami reconstruction.
"The two country directors wish to reiterate their commitment to playing their appropriate roles in supporting the peace process in Sri Lanka," Peter Harold and ADB chief Alessandro Pio said in the statement.
Pio told reporters that, despite recent unrest, the banks have kept up their projects to help rebuild Sri Lanka in the wake of the massive December 2004 tsunami that ravaged much of the coastline and killed some 35,000 people.
"But it is more difficult for larger scale projects, uncertainty makes it difficult," he said, adding that he hopes the talks in Geneva will resolve the lingering conflict, making it easier for the agencies to proceed with their projects.
