Discussion/Working Papers

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A Three-wheeled attraction: an analysis of Three-Wheeler drivers in Sri Lanka's labour market
(Institute of Policy Studies of Sri Lanka, 2022) De Silva, Thisali
The existing labour shortage in Sri Lanka has been inflicting high economic pressure not only on agricultural and industrial sectors but also on labour supply for domestic activities countrywide. Manufacturing sector industries such as apparel and construction, and service sector industries like tourism suffer from labour shortages that the country is currently experiencing. The shortage of people in some industries, such as the construction sector, is attributed to the reluctance of youth to take up this type of employment (Praveen et al. (2016)).
Adoption of Environmental Management Practices in the Hotel Industry in Sri Lanka
(2017-01-27) Wickramasinghe, Kanchana
Environmental management has not received the attention that it deserves in the case of the hotel industry in Sri Lanka although sustainable growth in the industry requires consideration of such practices. Our study assesses the adoption of good environmental management practices in the Sri Lankan hotel industry, focusing on energy, water, solid waste and waste water management. The study is based on data from 78 registered hotels in the Western Province of Sri Lanka. We obtained primary data on the environmental management practices using a pretested structured questionnaire. In addition to the cross-sectional data, we collected panel data on electricity consumption from these hotels for 2009–2013. The results show that the highest number of practices, 3.7 on average, adopted by hotels is in energy management. The average number of water management practices is 2.6. Low adoption rates are observed for waste water and solid waste management practices. The results from Poisson and Probit regression models show that the hotel characteristics and customer characteristics are significant determinants of the adoption of good practices with large hotels, chain-affiliated hotels and classified hotels more likely to adopt them. Analysis of electricity consumption shows that the occupancy rate and involvement of the hotels in environment management projects lead to a reduction in electricity consumption. From a policy perspective, small hotels, independent hotels, and unclassified hotels need to be motivated to adopt good environmental management practices through training, capacity building and financial support.
Belt and road initiative, debt and diplomacy: challenges and opportunities for China-Sri Lanka economic relations
(Institute of Policy Studies, Sri Lanka, 2019-06) Weerakoon, Dushni; Wijayasiri, Janaka
Commons vs. Commons: Managing Scarce Water Resources in Dry Zone Village Tank Systems in Sri Lanka
(The Economy and Environment Program for Southeast Asia (EEPSEA), 2011-02) Senaratne, Athula; Wickramasinghe, Kanchana
The struggle of village tank farmers in the dry zone of Sri Lanka against rising scarcity of water and land resources strongly highlights the interdependence of local resources under diverse regimes of governance. The significant population in the dry zone that lives under the village tank systems represents one of the most vulnerable community groups in the country. This study attempted to identify technical, institutional, and policy solutions that could provide sustainable answers to the problems faced by the village tank farming community. Physical scarcity is only one aspect of the problem because scarcity is closely influenced by more contentious issues of institutional limitations. The research was conducted in the Anuradhpaura district of the North Central Province in Sri Lanka. The research design included participatory methods of focus group discussions (FGD) and key informant interviews (KII) to gather primary data. Secondary data were collected from various sources, especially from past researches on village tank systems. Findings revealed that temporal scarcity of water and associated problems of managing local resources have been the major challenges that have shaped the evolution of local farming systems and water mana gement strategies. The traditional system evolved to overcome this challenge through the development of a set of social customs and local institutions. These customs and institutions had governed the use of lowland as well as upland resources until recently. However, recent changes such as population growth, government policies, commercialization of local economies, and modernization of agriculture technology have gradually eroded the traditional system. These changes have favored a privately oriented and resource intensive commercial farming system. Such changes have contributed to the collapse of control exerted by traditional system of social customs and local institutions over local resources, especially over the upland component of the farming system. This collapse has led to major environmental problems affecting land and water resources in the village tank systems. Hence, what is needed is a holistic approach of integrated resource management that includes technical, institutional, and policy interventions applied over interdependent systems of local resources. However, the implementation of an integrated mangement practices has to be facilitated by a modified system of local institutional arrangements and appropriate policy interventions designed to create an enabling environment.
The Economics of Tobacco in Sri Lanka
(Center for Tobacco Control Research and Education, UC San Francisco, 2004) Arunatilake, Nisha; Opatha, Maduwanthi
This paper describes trends in tobacco use in Sri Lanka, assesses the economic contribution of the industry (jobs, earnings, tax revenues and trade balance), and analyses the relationship between demand for cigarettes and prices and incomes, looking at different socioeconomic groups. It uses the estimated elasticities to simulate the likely impact of a tax increase on prices, government revenues and on demand, expenditures and tax burdens of different socio- economic groups.
Effects of environmental regulations on South Asian food and agricultural exports: a gravity analysis
(United Nations, 2014-01) Wijesinghe, W.P.A.S.
Regardless of the occasional dissenting voices, free trade is now being embraced by many of the nations of the world. South Asian countries joined the global consensus for frictionless trade by forming regional trade blocs under the banner of the South Asian Association for Regional Cooperation (SAARC). However, intra- and interregional trade in SAARC has not yet reached the desired stage, and a range of empirical studies have therefore been carried out with the objective of determining the causes. This current study is also motivated by the poor performance of the South Asian countries in world trade and it investigates the effects of environmental regulation on the food and agricultural trade of four South Asian nations, i.e., Bangladesh, India, Pakistan and Sri Lanka. For this study, the Gravity Model for international trade analysis was used with country- and time-specific fixed effects followed by Heckman sample selection model to avoid possible biases that are widely cited in the gravity literature. Trade data were retrieved from Trade Map while data for other gravity variables were retrieved from relevant recognized data sources. The Environmental Performance Index (EPI) was utilized as a proxy measure for the environmental regulation of the four SAARC nations and their trade partners to denote environmental regulation of reporting and partner countries. The results of the coefficient estimates revealed that even though there appears to be a relationship between stringent regulations and foreign trade without these specific effects, its significance fades as soon as both the importing and exporting country-specific effects are taken into consideration
Elasticity Estimates for Cigarettes in Sri Lanka
(Institute of Policy Studies of Sri Lanka, 2020) Arunatilake, Nisha; Weerasekara, Harini; Thilanka, Chamini
Tobacco is extremely harmful to health and has been found to increase the risk of many non-communicable diseases including cancer, heart diseases, and respiratory illnesses. The World Health Organization Framework Convention on Tobacco Control (WHO FCTC), of which Sri Lanka is a signatory, was formed to end the tobacco epidemic. Since signing the WHO FCTC treaty in 2003, Sri Lanka has introduced several initiatives to control tobacco use in the country. These measures have decreased the tobacco incidence in Sri Lanka, but tobacco consumption remains high with 28.1 per cent of males being smokers in 2018 (World Health Organization.
Financial inclusion, regulation, and education in Sri Lanka
(Asian Development Bank, 2014-11) Kelegama, Saman; Tilakaratna, Ganga
Sri Lanka has achieved a high level of financial inclusion compared to other South Asian countries. Its financial sector comprises a wide range of financial institutions providing financial services such as loans, savings, pawning, leasing and finance, and remittance and money transfer facilities. There is also evidence that a larger share of households in Sri Lanka accesses multiple financial institutions for their credit and savings needs. However, the use of insurance services, ATM facilities, e-payments, and mobile banking, is relatively low. Financial education is ad hoc and lags behind financial innovation and new products. The information technology (IT) literacy rate is only 35% in Sri Lanka, and with the growing IT–finance nexus, financial awareness and education have become all the more important. Strengthening the regulatory framework governing the microfinance sector and client protection is also crucial for improving financial inclusion in Sri Lanka. Much scope remains to improve financial inclusion, particularly related to cost and quality of financial services provided, and the sustainability of financial institutions.
The Impact of Population Aging on the Labor Market: The Case of Sri Lanka
(Institute for the Study of Labour (IZP), 2008) Vodopivec, Milan; Arunatilake, Nisha
Sri Lanka’s population is predicted to age very fast during the next 50 years, bringing a slowdown of labor force growth and after 2030 its contraction. Based on an original, 2006 representative survey of old people in Sri Lanka conducted as a part of this study, the paper examines labor market consequences of this process, focusing on retirement pathways and the determinants of labor market withdrawal. The paper finds that a vast majority of Sri Lankan old workers are engaged in the informal sector, work long hours, and are paid less than younger workers. Moreover, as one of the first findings of its kind, the paper shows that labor market duality that characterizes most developing countries carries over to old age: (i) previous employment is the most important predictor of the retirement pathway; (ii) older workers fall into two categories: civil servants and formal private sector workers, who generally stop working before they reach 60 because they are forced to do so by mandatory retirement regulations, and casual workers and the self-employed, who are forced to work until very old age (or death) due to poverty and who stop working primarily because of poor health; and (iii) the option of part-time work is used primarily by workers who held regular jobs in their prime age employment, but not by casual workers and self-employed.
Insurance to promote human-wildlife coexistence
(International Institute For Environment and Development, 2023)
This guide is for governments, conservationist practitioners and insurers to design and introduce insurance schemes to reduce human-wildlife conflict (HWC) and promote human-wildlife coexistence. HWC imposes significant costs on poor, small-scale farmers and pastoralists in many parts of the world, particularly those living adjacent to protected areas and on larger-scale operations such as plantations. Costs include losses from crop damage, livestock injury or death, property damage and human injury or death. Opportunity and other indirect costs add to the burden of HWC. Biodiversity is also impacted as wildlife is often injured or killed in retaliation.
Multiple Borrowing in the Sri Lankan Microfinance Sector
(Brooks World Poverty Institute, University of Manchester, 2013-09) Tilakaratna, Ganga
This brief discusses the extent of multiple borrowing in the microfinance sector in Sri Lanka, and its implications. It is based on a panel household survey carried out in 2006-07 and 2009-10. Detailed interviews with multiple borrowers and key informant interviews were also conducted.
National level implications of SDG implementation: the case of Sri Lanka
(Southern Voice on post-MDG international Development Goals, 2017-03) Tilakaratna, Ganga; Nanayakkara, Wimal; Madurawala, Sunimalee; Jayaratne, Suwendrani; Wickramasinghe, Kanchana
Sri Lanka is one of the signatories of the UN mandate on Agenda 2030 for Sustainable Development. The Sustainable Development Goals (SDGs) comprise 17 goals and 169 targets, ranging from poverty, inequality, health, education and environment. This paper examines the implications of SDG implementation in Sri Lanka, in particular how the SDGs are embedded in the national context, and issues related to coordination, monitoring, partnerships and stakeholder participation. It reveals that most of the SDGs and their targets are relevant to Sri Lanka, and are in line with the priority areas. The study stresses the need of a designated national-level body to coordinate activities carried out by different stakeholders and to drive implementation and monitoring of the SDGs in Sri Lanka. Participation of a range of stakeholders, including the government, international organisations, private sector and civil society organisations, academia and general public, is crucial for the successful implementation of SDGs. Inadequacy of awareness of the SDGs among many stakeholders and the general public is a key constraint to the effective implementation of the SDGs. Partnership and stakeholder participation can play an important role in raising awareness and monitoring of SDGs, sharing knowledge/expertise, as well as in mobilising financial and technical resources. Monitoring the progress of SDGs will also require strengthening the capacity of the national statistics office and other relevant agencies involved in the data compilation.
Palm Oil Industry In Sri Lanka: An Economic Analysis
(Institute Of Policy Studies of Sri Lanka, 2023) Pathiraja, Erandathie; Samaraweera, Ruwan; Fernando, Hiruni; Bogodage, Jaann
Palm oil is the main edible oil source consumed in the world. Sri Lanka began importing palm oil a few decades back mainly due to the increasing local demand driven by population and income growth, changes in food habits and developments in food and related industries. Considering the rising demand for imported palm oil and the potential suitability of climatic and soil factors in the country, oil palm was allowed to be cultivated on 20,000 hectares (ha) as part of a strategy to promote import substitution. Hence, regional plantation companies (RPCs) were permitted to cultivate oil palm in marginal rubber lands in selected districts. However, oil palm cultivation and consumption are globally criticised for its environmental and health impacts regardless of rewarding factors such as low cost and versatility in food and many other industries. Sri Lanka also paid attention to possible environmental hazards and health impacts of consuming palm oil as well as resistance from local environmental activists. As a result, oil palm cultivation was banned and a phase out within 10 years was proposed as a policy decision. Subsequently, the country took measures to restrict the importation of palm oil, considering its health hazards. Yet, alternatives to satisfy the local demand are limited. Hence, the decision was revised to keep the market open under licences. However, the industry investors claim that the criticism is unreasonable. Therefore, this study explores the economic aspects of the industry, such as costs and returns, contribution to the economy, tariff protection, market linkages etc., including potential environmental and social issues in the palm oil industry value chain in Sri Lanka.
Public Investment For Closing The SDG Finance Gap: Sri Lanka Perspective
(Institute Of Policy Studies Of Sri Lanka, 2023) Fernando, Lakmini
Realising 'United Nations 2030 Agenda for Sustainable Development' requires massive investment allocation as limited financial resource availability decelerated the achievement of sustainable development goals (SDGs). Economic crisis loomed with the COVID-19 pandemic, has further hindered SDG progress. Therefore, theachievement of 2030 Agenda relies on the effectiveness of recovery strategies and financial capabilities. Public investment plays a significant role in 2030 Agenda, however, systemic research on the nexus between public investment and SDGs is limited. Hence, assessing SDGs investment gap is significant and supports sufficient flow of funds to 2030 Agenda. The additional investment requirement in 2030 to reach key SDGs is 4% of the gross domestic product (GDP) for emerging market economies (EMEs) and 15% for low-income countries(LICs). Using an input-outcome based innovative costing methodology, Sri Lanka's additional investment requirement for SDGs by 2030 is estimated to be around United States Dollars (USD) 1.4 trillion (Tn) or 12.5 percentage pointsof GDP. On average, public investment has been around 5-7% of GDP over the last decade, hence, allocation ofadditional funds for SDGs is challenging.The 2030 Agenda requires placing equal importance on economic, social and environmental objectives. However,Sri Lanka's public investment ratio in these three dimensions is 80:19:1 and it is long been skewed towardsinfrastructure development. The SDG framework can be used as a foresight planning tool to minimise these disparities. Further, strengthened domestic resource mobilisation, use of innovative financing options and enhanced institutional quality are vital to achieve the 2030 Agenda for Sri Lanka.
Regional Economic Cooperation And Connectivity In South And South-West Asia: Potential And Challenges
(2013-10-01) Kelegama, Saman; Abayasekara, Ashani
Although South and South-West Asian countries helped drive global economic recovery in 2010,this study suggests that economic integration and cooperation in the sub-region is low and below potential, especially compared to East Asia. Not only do additional possibilities exist for mutually beneficial cooperation, but regional economic integration and cooperation is also essential if the sub-region is to sustain its growth momentum, and address its key development challenges in future. This process involves enhancing intra-regional trade; removing obstacles to inter-regional trade in services; allowing a freer movement of labor; developing deeper and more crisis-resilient financial markets; and coordinating appropriate monetary and fiscal policies. Enhancing regional connectivity is a multifaceted task that requires the implementation of bold policy initiatives at the national and regional levels, and in many different areas. Such a task could sustain the sub-region's dynamism in decades to come andreduce the wide disparities in economic opportunities within and across South and South-West Asian countries.
Return and reintegration without assimilation: South Asian migrant workers in the gulf during COVID-19
(Institute of South Asian Studies, 2020-06) Weeraratne, Bilesha
Temporary labour migration and related remittances are integral components of the South Asian economies. A significant portion of labour migrants from this region head to the Gulf countries. Nevertheless, migrant workers to the Gulf are barred from formally integrating into the socio-economic context in their country of destination. In this context, using the case of the Kuwait Amnesty and other examples during COVID-19 pademic, this paper reflects on the disproportionate division of responsibilities between the South Asian and Gulf countries in terms of the assimilation, return and reintegration of migrant workers, in an attempt to improve the well-being of migrant workers through the frameworks of the Sustainable Development Goals and the Global Compact for Safe, Orderly and Regular Migration.
Role of ICTs in Early Warning of Climate Related Disasters: A Sri Lankan Case Study
(Manchester: Centre for Development Informatics (CDI), University of Manchester, UK, 2011) Wickramasinghe, Kanchana
Climate change is now increasing – and will further increase in future – both the frequency and intensity of natural disasters in Sri Lanka including cyclones, floods and landslides (MoE 2010). While a number of strategies are necessary to address growth in climaterelated natural disasters, an effective early warning system can play a crucial role in lessening the probable negative impacts. More generally, the need for such a system was highlighted following the huge devastation caused by the 2004 tsunami. After four years of research, development and piloting activities, the Disaster Early Warning Network (DEWN) was launched in Sri Lanka on 30th January 2009. It aims to provide timely, reliable and costeffective massscale disaster early warnings. DEWN represents a multipartite effort and a case for publicprivate partnerships in delivering ICTbased early warnings.
The Role of Sri Lanka in Enhancing Connectivity between South Asia and Southeast Asia
(Tokyo: Asian Development Bank Institute, 2014-07) Weerakoon, Dushni; Perera, Nipuni
Improving physical connectivity between South and Southeast Asia has long been recognized as a key element in promoting greater trade and investment linkages within the region. As an island economy, Sri Lanka's regional connectivity has been mainly through its main sea port in Colombo, a transshipment hub port for South Asia. Investments to expand capacity at Colombo port are underway as part of Sri Lanka's renewed efforts to develop its infrastructure following the long internal separatist conflict that ended in 2009. Despite significant improvements in physical infrastructure connectivity, Sri Lanka has made only limited headway in strengthening its trade and investment links with the rest of the region. Moreover, the country has seen a sharp decline in its overall exports-to-gross domestic product (GDP) ratio, which is worrying in view of the growing external debt financing of many large infrastructure projects through state-led investment initiatives. Thus, Sri Lanka needs to focus on two priority areas: engaging private investment in infrastructure by strengthening the country's institutional and regulatory environment; and implementing a more strategic trade policy geared to enhance regional integration efforts.
School funding formulas in Sri Lanka
(2013) Arunatilake, Nisha; Jayawardena, Priyanka
Education Quality Inputs (EQI) scheme, a formula based resource allocation scheme, was introduced to give greater authority and resources to schools in decision making for improving teaching and learning methods in schools. This paper assesses its effectiveness in distributing funds and improving learning outcomes.Results show that the EQI scheme has improving equity. Smaller less facilitated schools rely on EQI funds more, but their utilization of funds is weaker. Evidence suggests that EQI funds have improved teaching, school attendance and learning. However, the effective usage of EQI funds is being affected by several factors as discussed in the paper.
Shadow education in Sri Lanka during Covid-19 : trends,impacts, and role in relation to mainstream education
(Institute of Policy Studies of Sri Lanka, 2023) Abayasekara, Ashani; Perera, Usha; De Silva, Thisali
The coronavirus (COVID-19) pandemic has created the largest disruption to education systems in recent history, leading to unavoidable and substantial learning losses among students worldwide. While a growing literature has examined the impacts of extended school closures on multiple aspects of education, the focus has almost exclusively been on formal mainstream education, as opposed to "shadow education" - more commonly known as private supplementary tutoring.

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