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Social Development

Six reasons why Sri Lanka needs to boost its ailing private sector

Tatiana Nenova's picture
 Joe Qian / World Bank
A view of the business district in Colombo. Credit: Joe Qian / World Bank

Sri Lanka experienced strong growth at the end of its 26-year conflict. This was to be expected as post-war reconstruction tends to bring new hope and energy to a country.
 
And Sri Lanka has done well—5 percent growth is nothing to scoff at.  
 
However, Sri Lanka needs to create an environment that fosters private-sector growth and creates more and better jobs. To that end, the country should address these 6 pressing challenges:

1. The easy economic wins are almost exhausted

For a long time, the public-sector has been pouring funds into everything from infrastructure to healthcare. Unfortunately, Sri Lanka’s public sector is facing serious budget constraints. The island’s tax to growth domestic product (GDP) ratio is one of the lowest in the world, falling from 24.2% in 1978 to 10.1% in 2014. Sri Lanka should look for more sustainable sources of growth. As in many other countries, the answer lies with the private sector.
 
2. Sri Lanka has isolated itself from global and regional value chains 

Over the past decades, Sri Lanka has lost its trade competitiveness. As illustrated in the graph below, Sri Lanka outperformed Vietnam in the early 1990s on how much of its trade contributed to its growth domestic product. Vietnam has now overtaken Sri Lanka where trade has been harmed by high tariffs and para-tariffs and trade interventions on agriculture.


Sri Lanka dropped down by 14 notches to the 85th position out of 137 in the recent  Global Competitiveness Index.
           
3. The system inhibits private sector growth

Sri Lanka’s private sector is ailing. Sri Lankan companies are entrepreneurial and the country’s young people are smart, inquisitive, and dynamic. Yet, this does not translate into a vibrant private sector. Instead, public enterprises are the ones carrying the whole weight of development in this country.
 
The question is, why is the private sector not shouldering its burden of growth?


From the chart above, you can see how difficult it is to set up and operate a business in Sri Lanka. From paying taxes to enforcing contracts to registering property, entrepreneurs have the deck stacked against them.
 
Trading across borders is particularly challenging for Sri Lankan businesses. Trade facilitation is inadequate to the point of stunting growth and linkages to regional value chains. The chart explains just why Sri Lanka is considered one of the hardest countries in the world to run a trading business. Compare it to Singapore–you could even import a live tiger there without a problem.

Bangladesh corridor vital to India’s ‘Act East’ policy

Sanjay Kathuria's picture
India-Bangladesh land border crossing, Photo by Sanjay Kathuria
India-Bangladesh land border crossing. Credit: Sanjay Kathuria

Deepening connectivity and economic linkages between India and Bangladesh will be critical for the success of India’s ‘Act East’ policy.

Here are five priority areas that have the potential to change the economy of Northeast India:

1. Transport Connectivity

After 1947, Northeast (NE) India has had to access the rest of India largely via the “Chicken’s Neck” near Siliguri, greatly increasing travel times. Traders travel 1600 km from Agartala (Tripura) to Kolkata (West Bengal) via Siliguri to access Kolkata port. Instead, they can travel less than 600 kms to reach the same destination via Bangladesh, or even better, travel only 200 km to access the nearby port of Chittagong in Bangladesh.

This is set to change as close cooperation between Bangladesh and India (including various ongoing initiatives such as the transshipment of Indian goods through Bangladesh’s Ashuganj port to Northeast India, expanding of rail links within Northeast India and between the two countries, the BBIN Motor Vehicles Agreement) can dramatically reduce the cost of transport between Northeast India and the rest of India.

The resultant decline in prices of goods and services can have a strong impact on consumer welfare and poverty reduction in the Northeast. Such cooperation also opens up several additional possibilities of linking India with ASEAN via Myanmar.

Moving forward, expanding direct connectivity between NE India and the rest of India via Bangladesh, while giving Bangladesh similar access to Nepal and Bhutan via India, is critical.

2. Digital Connectivity

Broadband connectivity of 10 gbps is now being provided from Bangladesh’s Cox’s Bazar to Tripura and beyond, to help improve the speed and reliability of internet access in NE India. Bangladesh has the capacity to provide more.

Sri Lanka, you have a right to know!

Idah Z. Pswarayi-Riddihough's picture
Sri Lanka's Right to Information act (RTI) can help citizens hold governments accountable and encourage citizens to participate actively in their democracy.
Sri Lanka's Right to Information act (RTI) can help citizens hold governments accountable and encourage citizens to participate actively in their democracy.


Today, the world marks the International Day for the Universal Access to Information. Fittingly, we in Sri Lanka, celebrate 7 months since the Right to Information (RTI) Bill was enacted.  

The product of a slow and steady reform process, RTI is a milestone in Sri Lanka’s history.

Yet how many citizens know about its benefits?

As open access to information takes international center stage today, I’m hoping Sri Lanka’s Right to Information Bill, one of the world’s most comprehensive, will get the attention it deserves.

There is indeed much to celebrate.

Civil society organizations and private citizens are putting Sri Lanka’s RTI to the test. Diverse requests have been filed, from questions relating to how investments are made for the Employees’ Provident Fund (EPF) to how soil and sand mining permits have been allotted in districts like Gampaha.

Interestingly, people living in rural areas are more aware -- and vocal -- of their rights to know than people in urban areas.

The government is making steady progress. In the last six months, more than 3,000 information officers have been recruited. An independent RTI Commission enforces compliance and acts on those who do not follow the law. If, for example, an information officer refuses to release information pertaining to a citizen’s life, they must provide a valid reason or face legal penalties.

In the next few years, the Sri Lankan bureaucracy faces the huge task of revamping its record management, including its land registration system. This reform is an opportunity to live up to RTI’s ambitions of open governance and help citizens access land title information and records that give them a legal title to their property.

Reforms Sri Lanka needs to boost its economy

Idah Z. Pswarayi-Riddihough's picture
 Joe Qian/World Bank
The Colombo Stock Exchange. Credit: Joe Qian/World Bank

Many Sri Lankans understand the potential benefits of lowering trade costs and making their country more competitive in the global economy. The majority, however, fear increased competition, the unfair advantage of the private sector from abroad and limited skills and innovation to compete.

Yet, Sri Lanka’s aspirations cannot be realized in the current status quo.  

While changes in trade policies and regulations will undeniably improve the lives of most citizens, I’m mindful that some are likely to lose. However, many potential gainers of the reforms who are currently opposed to them are unaware of their benefits.

Implementing smart reforms means that government funds will be used more effectively for the people, improve access to better healthcare, education, basic infrastructure and provide Sri Lankans with opportunities to get more and better jobs. Let me focus on a few reforms that I believe are critical for the country.  First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.    

First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services.

Towards a cleaner Bangladesh: Safe water, sanitation, and hygiene for all

Qimiao Fan's picture
 
 The World Bank
Bangladesh has made progress in recent years in the field known as WASH -water, sanitation access, and hygiene. Image courtesy: The World Bank

Community-Led Total Sanitation might be the greatest Bangladeshi export you’ve never heard of.  In countries across Asia, Africa and Latin America, a consensus has emerged that the best approach is Community-Led Total Sanitation, which is widely credited with changing people’s behavior around the world to no longer defecate in the open, which has greatly improved global health.

Bangladeshis can take plenty of pride in these far-away accomplishments. That’s because it is Northern Bangladesh - more specifically the Mosmoil village in Rajshahi district - that pioneered this approach seventeen years ago. Its success at home led to its widespread adoption abroad.

Safe drinking water is a right and proper sanitation is dignity of the citizens. Proper management of freshwater ecosystems and access to safe water and sanitation are essential to human health, environmental sustainability and economic prosperity. Water and sanitation are at the core of sustainable development critical to the survival of people and the planet. Goal 6 of Agenda 2030 not only addresses the issues relating to drinking water, sanitation and hygiene, but also the quality and sustainability of water resources worldwide.

The ‘Global Water Supply and Sanitation Assessment’ by World Health Organization (WHO), United Nations Children Fund (UNICEF), Water Supply and Sanitation Collaborative Council (WSSCC) reported that in 2012 about 40% (2.6 billion) of the world’s population was without access to safe water. Approximately 4 billion cases of diarrhea each year causes 2.2 million deaths, and majority of them are children under the age of five. This situation in Bangladesh is also challenging. A study by Water and Sanitation Program (WSP) wing of the World Bank reveals that Bangladesh incurred a loss of Tk295.48 billion in 2010 due to inadequate sanitation, which is 6.3% of the GDP.
 
Indeed, there is much to emulate in Bangladesh’s remarkable progress in recent years in the field known as WASH -water, sanitation access, and hygiene. Today, 98 percent of the population gets drinking water from a technologically improved source – water which comes from a manmade structure– up from 79 percent in 1990.  Bangladesh also largely succeeded in providing access to basic sanitation. It is estimated that only three percent of the population practice open defecation, down from 34 percent in 1990, thanks to behavior change campaigns and the building of many new toilets. 

But, much has yet to be done. Bangladesh has still a long way to go to meet the Sustainable Development Goal (SDG) of providing universal access to clean water and sustainable sanitation by 2030. The World Bank recently completed a study, the WASH Poverty Diagnostic, which examines the remaining challenges in ensuring access to safe water, sanitation, and hygiene. The findings are startling.

Fresh thinking on economic cooperation in South Asia

Nikita Singla's picture
 Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir & Surendar Singh/ Bangladesh) Photo By: Marcio De La Cruz/ World Bank
Young Economists sharing the stage with Sanjay Kathuria, Lead Economist and Coordinator, Regional Integration (Left to Right: Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir/Bangladesh & Surendar Singh/ India). Photo by: Marcio De La Cruz/ World Bank


That regional cooperation in South Asia is lower than optimal levels is well accepted. It is usually ascribed to – the asymmetry in size between India and the rest, conflicts and historical political tensions, a trust deficit, limited transport connectivity, and onerous logistics, among many other factors.

Deepening regional integration requires sufficient policy-relevant analytical work on the costs and benefits of both intra-regional trade and investment. An effective cross-border network of young professionals can contribute to fresh thinking on emerging economic cooperation issues in South Asia.

Against this background, the World Bank Group sponsored a competitive request for proposals.  Awardees from Bangladesh, India, and Pakistan, after being actively mentored by seasoned World Bank staff over a period of two years, convened in Washington DC to present their new and exciting research. Research areas included regional value chains, production sharing and the impact assessment of alternative preferential trade agreements in the region.

Young Economists offer fresh thoughts on economic cooperation in South Asia

Mahfuz Kabir, Acting Research Director, Bangladesh Institute of International and Strategic Studies and Surendar Singh, Policy Analyst, Consumer Unity Trust Society (CUTS International) presented their research: Of Streams and Tides, India-Bangladesh Value Chains in Textiles and Clothing (T&C). They focus on how to tackle three main trade barriers for T&C: a) high tariffs for selected, but important goods for the industries of both countries; b) inefficient customs procedures and c) divergent criteria for rules of origin classification.

Sreerupa Sengupta, Ph.D. Scholar at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi discussed Trade Cooperation and Production Sharing in South Asia – An Indian Perspective. Reviewing the pattern of Indian exports and imports in the last twenty years, her research focuses on comparing the Global Value Chain (GVC) participation rate of India with East Asian and ASEAN economies. Barriers to higher participation include a) lack of openness in the FDI sector; b) lack of adequate port infrastructure, and long port dwell times; and c) lack of Mutual Recognition Agreements (MRAs).

Aamir Khan, Assistant Professor, Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad presented his work on Economy Wide Impact of Regional Integration in South Asia - Options for Pakistan. His research analyzes the reasons for Pakistan not being able to take full advantage of its Free Trade Agreement (FTA) with China, and finds that the granting of ASEAN-type concessions to Pakistan in its FTA with China would be more beneficial than the current FTA arrangement. The work also draws lessons for FTAs that are currently being negotiated by South Asian countries.

Education is the way forward for Afghanistan

Mohammad Homayoon Rahmani's picture
Also available in: دری | پښتو
The Education Quality Improvement Program provides block grant support to the construction of school buildings and other facilities such as laboratories, libraries and computer labs. This improved studying environment has encouraged almost all families to send their children to schools in many districts of Balkh province. Photo Credit: Fardin Waezi/ World Bank


Someone wise once said that education is the foundation of a country’s progress. As every Afghan knows and feels, after four decades of conflict and violence, progress is exactly what this country needs to get back on its feet.
 
I have always had a deep interest in making my social context better and this is the reason why I joined the Education Quality Improvement Program (EQUIP), which aims to improve access and quality of education for Afghans. I joined the EQUIP team in the program’s second phase, which started in January 2008.
 
Through EQUIP, we have been working with communities to change their views and perceptions on education, especially in villages. I remember when I joined the team in 2010, many people would come and tell us they did not want to send their girls to school. But slowly EQUIP won them over.
 
Now, we can proudly say that we have the full support of communities everywhere in Balkh Province. For example, we have never had to buy land to construct a school in any district in Balkh. Every single time, it has been the people who bought or donated land and invited us to construct the building, even in the poorest regions.

پوهنه د افغانستان د پرمختګ یوازینۍ لاره

Mohammad Homayoon Rahmani's picture
Also available in: English | دری
د پوهنې د کیفیت د لوړولو برنامې لخوا د اړتیا وړ پراختیایي مرستو په برابرو سره د ښوونځیو د ودانیو جوړولو ترڅنګ، له یو زیات شمیر نورو آسانتیاوو لکه د ساینسي لابراتوارونو، کابتونونو او کمپیوتري لابراتوارونو تجهیز څخه ملاتړکوي. د زده کړې چاپیریال د دغو بدلونونو په راتګ سره خورا ښه والی موندلي، د بلخ ولایت په بېلابېلو ولسوالیو کې کورنۍ هڅول شوي، ترڅو خپل ماشومان ښوونځیو ته راولیږې. انځور: فردین واعظي/ نړیوال بانک

زده کړه د افغانستان د پرمختګ لاره پرانیزي: د مشرانو مشهوره خبره ده چې وایې، ښوونه او رزونه د هر هېواد د پرمختګ بنسټ جوړوي. لکه څرنګه، چې له څلورو لسیزو جګړو او ناامنیو وروسته، اوس د هر افغان لپاره تر بل هر وخت ښه معلومات شته، چې په خپلو پښو د دې هېواد دریدل، پرمختګ ته اړتیا لري.

ډېر لېواله وم، چې خپل ټولنیز چاپيریال هر څه ښه جوړ کړم، تر څو له همدې لارې د خپلو ځوریدلو خلکو لپاره د خدمت مصدر وګرځم، له همدې امله، د پوهنې د کیفیت د لوړولو له برنامې سره مې کار پیل کړ، چې موخه یې په افغانستان کې د ښوونې او روزنې د کیفیت او ورته د لاسرسي لوړول و. کله چې مې په دغه برنامه کې کار پیل کړ،  نو د پوهنې د کیفیت د لوړولو برنامه په خپل دویم پړاو کې و، چې لا پخوا د ۲۰۰۸ کال د جنوري په میاشت کې پیل شوی و. د همدې برنامې له لارې، زموږ هڅه دا وه، تر څو په بېلابېلو سیمو په تیره بیا په لرو پرتو سیمو کې له کلیوالي خلکو سره ووینو کومو، چې د پوهنې په اړه ناسم لیدلوري او تعبیرونه لرل، تر څو له هغوۍ سره له نږدې کار وکړو او د پوهنې په اړه د هغوۍ ذهنیت مثبت اړخ ته را واړوو. ښه مې په یاد دي، کله چې مې په ۲۰۱۰ کال کې د پوهنې د کیفیت د لوړولو د برنامې له ټيم سره کار پیل کړ، نو یو زیات شمېر خلک موږ ته راغلل او ویل یې، چې هغوۍ هېڅ وخت دې ته چمتو نه دي، تر څو خپلې نجوني ښوونځي ته ولیږي. خو له ډېرو هلوځلو وروسته، بالاخره دا برنامه بریالۍ شوه.

اوس په پوره ډاډ سره ویلی شم، چې موږ د بلخ ولایت په ټولو سیمو کې له پوره ملاتړ څخه برخمن یو. د بېلګې په توګه، کله چې موږ د بلخ ولایت په کومه ولسوالۍ کې ښوونځي جوړو، نو د ځمکې اخیستلو ته اړتیا نه لرو. بلکې د هغې سیمې خلکو په خپله ځمکه اخیستي او موږ ته یې په اختیار کې راکړې ده. هغوۍ له موږ غوښتل، تر څو د دوی په ملکیت کې ورته ښوونځی جوړ کړو – هان چې ډېرو بېوزلو خلکو هم موږ سره داسې چلند کړی دی. کله چې د بلخ ولسوالۍ چهارسنګ کلي ته ورغلو، چې هلته هېڅ ښوونځی نه و، خو سره له دې، چې د دې کلي ټولو خلکو د بېوزلۍ تر کرښې لاندې ژوند لاره، سره را ټول شول او موږ ته یې د ښوونځي د جوړولو په خاطر ځمکه واخیستله. د پوهنې د کیفیت د لوړولو برنامه د هغه کلي د ماشومانو لپاره ښوونځی جوړ کړ او نن ورځ د هغه کلي ټول ماشومان په هغه ښوونځي کې درس وايي.

Sri Lanka: Building a more resilient economy

Smriti Daniel's picture



At the launch of the Sri Lanka Development Update (SLDU), our Twitter chat #SLDU2017: Environmental Benefits of Economic Management set out to explore how Sri Lanka could meet the twin challenges of increasing its physical and financial resilience.
 
The panel comprised experts from the World Bank - Country Director for Sri Lanka and the Maldives, Idah Pswarayi-Riddihough; Senior Economist Ralph van Doorn and senior environmental specialist Darshani De Silva – and Kanchana Wickramasinghe, a research economist in the Institute of Policy Studies. Together, they unpacked the SLDU, discussed its key findings and fielded questions from across the region around its main themes.
 
The bi-annual report, notes key economic developments over the preceding months, placing them in a longer term and global perspective; in the Special Focus section, it explores topics of particular policy significance to Sri Lanka. 
 
Ralph started with the idea that Sri Lanka faces a window of opportunity during which key reforms could transform the country and its economy. He noted that Sri Lanka’s position in the global economy improved its global growth prospects, as well as that of its key export partners. Low commodity prices and the restoration of the GSP+ preferential trade arrangement with the EU had also combined to improve the outlook for the Sri Lankan economy.

For Idah, the country’s mood and the government’s commitment to change were critical to success:   
 
The panel delved into how natural disasters and extreme weather events posed a threat to Sri Lanka’s growing economy. In the short-term the damage was clear and serious, with losses amounting to several billions a year, as Idah noted in her blog. During the chat, she emphasised how Sri Lanka needed to be prepared for future disasters or it would cost the country enormously.
 
Kanchana pointed out that in the long-term, disasters could set back poverty alleviation efforts, especially in agricultural and rural areas, adding:
 

With the chat underway, questions poured in from an online audience who were interested in diverse issues – from managing Sri Lanka’s ongoing drought and its impact on the Northern Province to what insights the SLDU had to offer other countries in the region such as India.

معارف یگانه راه ترقی و پیشرفت افغانستان

Mohammad Homayoon Rahmani's picture
Also available in: English | پښتو
برنامه ارتقای کیفیت معارف از طریق پرداخت وجوه انکشافی مورد نیاز زمینه اعمار ساختمان های مکاتب و فراهم آوری سایر تسهیلات همچو تجهیز لابراتوار های ساینسی، تاسیس کتابخانه ها و تجهیز لابراتوار های کمپیوتر را حمایت مینماید. این تغیرات مثبت باعث بهبود فضای درسی گردیده، خانواده ها را در ولسوالی های ولایت بلخ بیشتر تشویق نموده، تا فرزندان شان را به مکتب بفرستند. عکاس: فردین واعظی/ بانک جهانی


تعلیم راه گشای ترقی افغانستان است: سخن معروف بزرگان است که تعلیم تهداب ترقی هر کشور میباشد. چنانچه بعد از سپری شدن  چهار دهه جنگ و نا امنی ها، اکنون برای هر افغان، بیشتر از پیش، معلوم و ملموس گردیده که برای خودکفایی این کشور نیاز به ترقی دارد.  

بسیار علاقمند بودم، تا محیط اجتماعی خود را بهتر سر و سامان دهم، تا از این طریق بتوانم مصدر خدمت به مردم رنج دیده خود گردم، به همین دلیل با برنامهٔ ارتقای کیفیت معارف، که هدف آن بهبود دسترسی و کیفیت تعلیم در افغانستان است، به کار آغاز نمودم. زمانیکه شامل کار با این برنامه گردیدم، برنامهٔ ارتقای کیفیت معارف در مرحله دوم فعالیت های خود قرار داشت، که قبلاً در ماه جنوری سال ۲۰۰۸ آغاز گردیده بود. از طریق این برنامهٔ،  تلاش ما این بود، تا با مردم در محلات مختلف مخصوصاً ساکنان روستاها که دیدگاه و تعبیرات نادرست در مورد تعلیم داشتند، از نزدیک کارنموده ذهنیت منفی آنان را نسبت به اموزش تغیر دهیم. درست به یاد دارم زمانیکه با تیم برنامه ارتقای کیفیت معارف در سال ۲۰۱۰ به کار آغاز کردم، تعداد کثیری از مردم نزد ما آمده، میگفتند که آنها هیچگاه حاضر نیستند، تا دختران شان را به مکتب بفرستند. بعد از سعی و تلاش زیاد، بلاخره  این برنامه موفق گردید.

اکنون به اطمینان کامل گفته میتوانیم که ما از حمایت کامل مردم در محلات در سراسر ولایت بلخ برخوردار هستیم. به گونهٔ مثال، در هیچ ولسوالی ولایت بلخ، به خریدن زمین که روی آن مکتب اعمار کنیم، مجبور نشده ایم. بلکه این اهالی منطقه بودند که هر بار قطعهٔ زمین را خریداری و یا هم در اختیار ما میگذاشتند. انان از ما میخواستند، تا روی ملیکت شان مکتب برایشان اعمار کنیم - حتی فقرترین اهالی منطقه نیز همین کار را میکردند. زمانی در ولسوالی بلخ  به قریهٔ  چهارسنگ برخوردیم که هیچ مکتبی در آن وجود نداشت. باوجودیکه اهالی آن قریه زیر خط فقر میزیستند ولی همهٔ شان گرد هم آمدند، تا قطعهٔ زمینی را برای اعمار یک مکتب خریداری نمایند. برنامه ارتقای کیفیت معارف برای اطفال اهالی آن منطقه یک باب مکتب را اعمار نمود، امروز تمام اطفال قریه متذکره به مکتب میروند.

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