Health

The World Bank has been supporting Sri Lanka’s health sector through analytical work and credits from the International Development Association since the late 1980s and, more recently, through loans from the International Bank for Reconstruction and Development.

Sri Lanka’s health system has a long track record of strong performance. For at least 50 years it has achieved much better outcomes in maternal and child health and infectious disease control than would have been predicted by its income level. The Primary Healthcare System Strengthening Project builds on a $200-million Second Health Sector Development Project (closed in 2018). This project aims at benefiting the people of Sri Lanka by increasing the utilization and quality of primary health care services. The focus of this project is on the detection and management of NCDs, responding to the changing health needs of the population and targeting the most vulnerable. On the analytical front, substantial knowledge has been generated in recent years that inform government policies. Some of the key analytical work include assessment of health financing system, positive deviance study for nutrition, public expenditure review for health and nutrition, and analyses of human capital development.

The year 2020 is seeing an unprecedented public health crisis of the COVID-19 pandemic. Given the emergency situation, the Sri Lanka COVID-19 Emergency Response and Health Systems Preparedness Project ($128.6 million) was swiftly activated tapping into the Fast-Track COVID-19 Facility that availed $14 billion for all IDA and IBRD countries globally. The project is supporting the government in strengthening the emergency response mechanism and capacity and the national and sub-national institutions in responding to the ongoing COVID-19 outbreak and any public health emergencies that may occur in the future.

Education

Sri Lanka’s achievements in education have been impressive, including universal access and participation in primary education, high enrollment in secondary education, and gender parity in general education. However, access to higher education is low, below the level expected of an upper-middle income country. Also, universal access to good quality early childhood education is a challenge.

The World Bank is helping the development of human capital across all levels of education and training. The Sri Lanka Early Childhood Development Project will increase the ability of children from disadvantaged households to access early learning opportunities.

World Bank assistance to the general education sector is currently ongoing through the General Education Modernization project that was launched in October 2018 and seeks to promote learning outcomes and socio-emotional skills of students. This project contributes to improve learning outcomes in English and Mathematics and enhance teacher performance.

The Accelerating Higher Education Expansion and Development (AHEAD) Operation supports the country to increase enrollment in priority disciplines for economic development, improve the quality of degree programs, and promote research and development, and commercialization of innovations.

Climate Change and Disaster Risk Management

Climate-related hazards pose a significant threat to economic and social development in Sri Lanka. By 2050, potential impacts due to climate change are foreseen to be approximately a 1.2 percent loss of annual GDP. The ongoing Climate Resilience Improvement Project (CRIP) carried out rehabilitation works of flood damaged irrigation and flood control infrastructure benefiting more than 50,000 hectares of agricultural land, landslide mitigation works in 18 schools protecting 30,000 students while ensuring transport connectivity for more than 750,000 people by upgrading vulnerable bridges and stabilizing unstable road slopes which will create landslides during rainy periods. CRIP also developed Integrated Flood and Drought Risk Assessment Reports and Basin Investment Plans for 6 river basins, based on which the GoSL will prioritize future flood and drought mitigation investments. The Climate Resilience Multi-Phased Program (CRes MPA) approved by the Bank will support the Government to modernize forecasting and early warning services of high impact weather, and in flood mitigation investments in Kelani river basin. The Catastrophe Deferred Draw-Down Option (Cat-DDO) program closed in 2017 provided immediate liquidity to the Government after 2016 floods and supported strengthen disaster risk financing, risk information systems and resilient infrastructure planning. Building on these initiatives, the GoSL and the Bank will work closely to advance dialogue to mainstream DRM further into various sectors.

Agriculture

Agriculture sector still employs approximately 27 percent of the population, although its contribution declined to 6.9 percent of GDP. Around 80 percent of the approximately 2.3 million hectares of agricultural land is under smallholder production with around 1.65 million smallholder farmers operating on average less than 2 ha. Traditionally, the Government’s approach is interventionist, most notably in its objective to achieve self-sufficiency, which has limited farmers’ opportunities to diversify into higher-value products and kept the sector concentrated in the low-value food crops. The Government has sought to introduce some reforms in the sector, but these have not progressed due to many challenges. The World Bank program in Sri Lanka responds to these challenges to address some of the long-standing issues around productivity, private sector investment, value chains, policy reform, and adaptation to climate change.

A core principle of the program is private sector-led smallholder agricultural transformation. This involves a change in mindset of current public institutions to recognize the public role in creating necessary conditions, stimulating private finance and private sector solutions. The Agriculture Sector Modernization Project (ASMP) includes different instruments (matching grants, credit guarantee, out-grower support, farmer-agribusiness alliances) to explicitly crowd in private finance, together support for strategic market infrastructure, including roads. As of October 2019, The total approved matching grants amount to US$68.4m. The observed impact of the scheme includes: i) the upgrading of standards in the food processing industry; ii) achieving transformation change in specific sub-sectors (such as shrimp and ornamental fish) through addressing sector-wide challenges; iii) creating more and better quality jobs; and iv) creating competitiveness and new markets through clustering and scale.

The Climate Smart Irrigated Agriculture Project (CSIAP) aims to improve the productivity and climate resilience of smallholder agriculture in selected climate hotspot areas is also a vital need with increased climate variability increasing risks to drought and flood and it would also support linkages of smallholders to value chains. Farm productivity and value addition is held back by low innovation and lack of adoption of technologies, especially by smallholder farmers. Both ASMP and CSIAP emphasize innovation. CSIAP will push new technology applications including (inter alia) providing real-time agriculture-meteorological information to farmers and other stakeholders. Both ASMP and CSIAP are assisting the Government in its COVID-19 short- and medium-term food security and productivity enhancement program.

Water Supply and Sanitation

Sri Lanka has made a significant progress to achieve basic water supply and sanitation. Ninety two percent of the population has access to improved drinking water and ninety four percent to basic sanitation. The Government of Sri Lanka aims to increase piped water access to meet the Sustainable Development Goals. The Water Supply and Sanitation Improvement Project has made substantial contributions to providing 24-hour treated piped water supply and sanitation services in rural, peri-urban and estate areas in seven districts (Mullaithivu, Kilinochchi, Nuwara Eliya, Badulla, Monaragala, Kegalle, and Ratnapura) that are among the poorest in the country. In addition to construction of infrastructure, the project conducts extensive hygiene behavior change activities, and training and development of Community Based Organizations to operate and maintain their water supply systems. The projects aims to benefit more than 600,000 people with improved water supply and sanitation, improving water security, health and resilience.

Urban Development

Sri Lanka’s urbanization is manifesting itself with the emergence of the economically dominating Colombo metropolitan region (CMR) and the Kandy–Colombo–Galle multicity agglomeration. While the CMR covers only about 6 percent of the country’s total land area, it is home to 28 percent of Sri Lanka’s population, accounts for about 45 percent of national GDP and 80 percent of industrial value added. It is the country’s major urban agglomeration and is growing faster than any other area in Sri Lanka, at the same time the CMR also hosts the highest numbers of the country’s poor and bottom 40 percent populations. The World Bank is supporting Sri Lanka to implement its urbanization and rural-urban integration agenda.

The Metro Colombo Urban Development Project (MCUDP) is supporting the government of Sri Lanka to reduce flooding in the catchment of the Colombo Water Basin, and strengthen the capacity of local authorities in the Colombo Metropolitan Area (CMA) to rehabilitate, improve and maintain local infrastructure and services through selected demonstration investments. The Project pioneered the use of urban wetlands as a nature-based solution for flood risk mitigation, for building climate change resilience, and for improving urban livability. Urban wetland management work supported by the Project has led to the Cabinet approval of a moratorium on wetland reclamation within the metro Colombo area, and to an international recognition for Colombo as a Ramsar Wetland City (first capital in the world to receive this award). Once all sub-projects are completed, the reduction in the area of flood risk will be 4.0 - 4.3 km2 for the whole Colombo, and 3.7 – 3.9 km2 for the Project area. Flood reduction measures will reduce the population affected by flooding by 27 percent for the project area and 12 percent for the whole Colombo.

The Strategic Cities Development Project and the Additional Financing to the project (approved in May 2016) are expanding the approach to urban infrastructure upgrading to Kandy, Galle and Jaffna—three strategic city regions in the center, south, and north—and supporting investments in urban water supply, sewage and drainage systems, cultural heritage rehabilitation, urban transport and traffic management, among other areas. To date, approximately 400,000 people have benefitted from improved basic services delivered in the participating city regions. These range from improving reservoirs, water treatment, distribution, and sludge treatment, to public spaces such as parks and viewing decks, to bus terminals and drainage improvements.

The Local Development Support Project is supporting the government of Sri Lanka on strengthening local government authorities' capabilities to deliver services to communities in a responsive and accountable manner and to support economic infrastructure development in participating provinces.

Trade and Competitiveness

The Trade and Competitiveness program is a package of technical assistance to support the Government of Sri Lanka’s ambition to create more, better private sector jobs and improve the enabling environment for business. The program is a joint initiative from the World Bank and the Australian Department of Foreign Affairs and Trade (DFAT). All activities in the program are underscored by a strong focus on gender, youth, disability and poverty, including analytical output (programming and policy briefs) related to gender in specific sectors. Specifically, the program intends to address regulatory and institutional constraints that inhibit the competitiveness of the private sector in order to support private-sector led growth, increase economic diversification and enhance the volume and value addition of exports via interventions related to improving Sri Lanka’s trade potential, investment climate and policy and regulatory simplification and Doing Business program.

Last Updated: Apr 12, 2020