Framework
Acceleration
Economic
Sri Lanka
2020-25
Working Draft

SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 1
Background:
Sri Lanka has seen a discernible
slowdown in economic growth
owing to a multitude of domestic
and external factors. With the
country ’s rise into the Upper-Middle
Income threshold (as defined by
the World Bank), it is imperative
that the country unlocks economic
growth through carefully designed
and implemented reforms. Unless
this is done, Sri Lanka risks being
caught in the middle-income trap.
It is with the intention of proposing
to policymakers, interventions that
are identified from a private sector
perspective that the
Ceylon Chamber set about
formulating an Economic
Development Framework
targeting the 2020-25 period.
The Chamber set up eighteen
(18) Working Groups to obtain
inputs to formulate the Framework.
The common and cross-cutting
recommendations from these groups
can be found in the pages that
follow. The detailed input which
consists of policy intervention,
implementation mechanism and
targets are found in the respective
Working Group chapters.
“It is imperative
that the country
unlocks
economic
growth through
carefully
designed and
implemented
reforms”
Accelerating
Sri Lanka’s
Economic
Trajectory
2
| WORKING DRAFT
THE
VISION
The vision espoused in our document is for an economy that will
be USD 134 billion by 2025 from the current (2018) USD 89
billion. For this to vision to be a reality, our expectation is for GDP
to steadily rise from the current 3% levels to 5%-6% in the next few
years. With this stronger base, we anticipate growth to then take
off to 7-8% levels by 2025. The growth is expected to be driven
via sectors such as exports (merchandise goods and services),
tourism and transportation and logistics amongst others.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 3
2025
134
USD BN
2018
89
USD BN
nominal GDP
nominal GDP
6.8%
Average Real
gdp growth
2020 - 2025
A USD 134
Billion
Economy
by 2025
4
| WORKING DRAFT
Acceleration
Framework
POLICY
NATIONAL
GOVERNANCETrade
National Security
Execution Performance Meritocracy Minimising corruption “…….”Tax
Ethnic Harmony
Social Inclusiveness
Law and Order
Digitisation
Education
Innovation
Energy
SME
Health
AGRICULTURERETAILTOURISMSectoral growth ambition on backdrop of cross-cutting enablers,
policy transformation levers and governance fundamentals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 5

EFFICIENCY

INTEGRITY
TRANSFORMATIVE LEVERStreamlining the bureaucracy Addressing the bottlenecksReforming SOEs“…….”Macro stability
Respect of Human Rights
“…….”
Sustainability
“…….”
“…….” Denotes that the sub components are not limited to the ones mentioned
MANUFACTURINGEXPORTSPLANTATIONSTRANSPORTATION & LOGISTIC“…….”This model can be considered to view the economic trajectory in a holistic perspective considering the overarching pillars of
Governance, National Integrity, Transformative Levers and Policy Efficiency which will drive the key horizontals (such as digitisation,
energy) and vertical sectors (such as agriculture, tourism) of the economy. The key tenets of the pillars, horizontals and verticals are
spelled out, but are not exhaustive to the ones mentioned in the model.
6
| WORKING DRAFT
Focus
Areas
Key
Pillars
Economy
Unity & Harmony
Socio-Economic Development
Hygiene Factors
Factors such as better public sector,
strong foreign relations, strong
national security
Governance
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 7
Transformation
& Reform Levers
for Uplifting the
National Economy
Key Pillar: Governance
1. Strategise - Implement - Transform
Why?
Sri Lanka has many vision documents and
national policies across many sectors.
However, the execution and implementation
is often weak, or non-existent.
How?
This document lists several current plans and
programmes that must be implemented fully,
e.g. the National Export Strategy.
We recommend the following initiatives:
Formulate a National Implementation
Oversight Committee consisting of both
public and private sector officials, with
sub-committees formed at different levels.
An action tracker for all government
initiatives, mandatory quarterly
progress reports and a sound public
communication strategy.
Mandatory performance audit by
the Auditor General’s department, in
addition to a fiscal audit function.
Vesting the overall function of monitoring
development projects with a line
Ministry responsible for monitoring and
evaluation.
The Bill formulation process should be
made more efficient.
Taking an inventory of incomplete
projects, and complete projects which
are viable. Non-viable projects need
not be completed, on the principle that
“good money need not be thrown after
bad”.
8
| WORKING DRAFT
Key Pillar: Economy
2. Energize State-Owned Enterprise (SOE) Reforms
Why?
SOEs have been a key source of
macroeconomic instability that has plagued
Sri Lanka for several decades.
54 out of 422 SOEs classified as
strategically important
57% of GDP Asset base in 2018
Rs. 26 billion Loss before tax in 2018
If the Banking and Finance SOEs are
removed from this classification, it would be
a total aggregate loss of Rs 122 billion.
This value is three (3) times the government
recurrent expenditure for Samurdhi payments.
The losses in part could be explained by the
absence of market-based pricing while the
balance is due to weak governance and
management.
While some solutions have been discussed
and plans devised to turn this narrative
around they have repeatedly fallen short in
terms of implementation. A reason for this is
the political fallout due to the high level of
employment provided in SOEs.
However, the stakeholders go beyond those
holding employment to the near 22 million
population that are shareholders of these
public institutions.
How?
There are case studies of successful reform of
SOEs such as SLT that can be built on.
SOE reform could be a catalyst to revive
the capital markets which can be used as
a source of funding without resorting to the
cash-strapped Treasury.
It is important for a future government to
prioritise SOE reforms with a focus on better
engagement and communication to sell the
urgency and need for reform.
A way forward has been provided in detail
in our SOE recommendations from pages
32 - 33.
3. Address Bottlenecks in the Economy
Why?
In the process of compiling this document, a
few cross-cutting bottlenecks that held back
growth in the economy were identified.
How?
It is imperative that steps are taken to
address the following:
A. Availability of land for commercial use
B. Labour –
a. Scarcity of labour in multiple
industries;
b.
low female participation in the
labour force;
c. many sectors have unfilled
vacancies and lack of skilled staff,
while there is “under-employment” in
other sectors.
C. Consistent Tax regime and achieving
higher tax collection

The importance of improving tax
collection and achieving a higher % of
GDP; policy consistency in the tax law
regime.
Transformation & Reform
Levers for Uplifting the
National Economy
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 9
D. Quality, reliability and cost of
Electricity supply
E.
Implications of ageing demographics

Sri Lanka faces an ageing population
where the elderly population will surpass
the youth population in the next 02-
03 decades. This requires immediate
attention to address implications
for pensions, health and education
amongst others.
F. Growing Pension Liability

The pension cost in terms of cash
outflows from the state in 2018 was
approximately 1.3% of GDP and 9.3%
of the total recurrent expenditure.
With ageing demographics and high
employment in the public sector, this will
become a higher burden in the coming
period.
4. Avoid the ‘Boom and Bust’ Cycles
Why?
The government should put in place stable
polices that will enable sustainable growth
reversing decades of growth fuelled by either
fiscal or monetary stimuli.
How?
This requires policy consistency and clarity.
Continue current efforts towards fiscal
consolidation through higher tax collection
and prudent expenditure.
Maintenance of Central Bank independence
will be key in providing credibility to both
investors and businesses.
Laudable programmes such as the
National Export Strategy should continue
to be implemented while expediting the
implementation of the Trade Facilitation
Agreement.
Evidence-based decision making must be
integrated into the Government policy-
making process. Government institutions
should be required to maintain accurate and
relevant data.
The right to access Government information
provided for in the Right to Information Act is
laudable, and should be continued so that
citizens may access information relevant to
development programmes.
10
| WORKING DRAFT
Transformation & Reform
Levers for Uplifting the
National Economy
Key Pillar: Economy
5. Review price controls and caps
Why?
The functioning of the market economy
is impacted by government intervention
through price controls and caps in varying
forms, including maximum retail price on some
products and interest rate caps on deposits
and lending.
These are often introduced without
understanding the underlying reasons for the
normal market prices and do not address
said reasons or quantities of supply and
demand.
Very often price controls / caps lead to
shortages, discourage investment and worsen
the demand / supply of such products.
How?
It is necessary to re-evaluate the price
controls and caps, and use these sparingly
and as short-term measures.
6. Realizing the ‘Wealth’ of Potential Opportunities
Why?
It is not all doom and gloom for Sri Lanka’s
economic trajectory. Our deliberations have
highlighted numerous opportunities in pushing
the economy to achieve its full potential.
How?
The following are a few such potential areas
for growth:

improvement of Sri Lanka’s tourism
offerings,
transforming Sri Lanka into a retail hub
and a medical/wellness destination,
pursuing growth in exports through
agricultural and manufacturing related
exports,
exploring service exports, which display
a high growth potential in ICT and
Logistics services,
tapping into the significant export
potential in value added mineral exports
and petroleum exploration,
and implementing a proactive
engagement strategy with the diaspora,
enabling Sri Lanka to reap a Diaspora
Dividend similar to that which other
countries such as India and China have
achieved in its economic development.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 11
7. Leveraging on opportunities in IR 4.0 and Digitisation
In order to remain globally competitive, Sri Lanka must continue to make significant advancements on the digital front. There are other mega-
trends taking place in the global economy with the advent of the 4th Industrial Revolution. Sri Lanka needs to integrate such developments to
propel growth.
Sri Lanka should implement a Digital ID system and the necessary data protection legislation to seamlessly connect with its citizens to offer
services such as banking, health and payment of taxes,
12
| WORKING DRAFT
Fundamental
Hygiene Factors as
a Foundation for
Sustainable Growth
Key Pillar: Unity & Harmony
1. Preservation of National Security and Ethnic Harmony
Why?
The economic plans and national
development are reliant upon peace and
harmony, and law and order.
How?
An effective strategy against terrorism
Strategy to curb riots and violence within the
rule of law
Respect human rights, freedom of expression
and right to information
Key Pillar/s: Governance & Hygiene Factors
2. Public Sector Reform:
A. Streamline Government Ministries and Departments
Why?
The sheer number of ministries today leave
the citizen confused and inconvenienced,
and should be limited to avoid an
unnecessary drain on resources.
How?
A rational basis for the assignment of subjects
and functions to Ministries to aid sensible
and speedy decisions.
Where there are cross-ministerial/department
linkages, introduce an Inter-Ministerial Taskforce.
National Policies should be administered by
suitably qualified officials who do not change
roles based on change of government or
Ministers.
Ministerial allocations should be based on
capacity to deliver results - not on seniority in
the governing party, in Parliament or otherwise.
Movement towards an accrual system for
Government accounting from the existing
medium-term cash-flow system by 2023/24.
Disclosures by key line ministries and the
Finance Ministry to ascertain critical
information on the total liabilities including
guarantees, pension liabilities and subsidies.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 13
B. Re-orient the Public Sector to Deliver High-quality Service to the People
Why?
65 Public Servants per 1,000 citizens
Our Public Sector is extensive, and drains
national resources.
A more efficient public sector is an absolute
need in recalibrating Sri Lanka’s economic
trajectory.
How?
The following should be looked at:
Ensure that Secretaries to Ministries
are knowledgeable and competent
- able to realise the macro vision
of the Government, while delivering
administrative and financial controls.
Avoid frequent transfers of Secretaries.

Initiate process improvement at
Government Institutions to provide a
high-quality service and minimize cost
and time spent by stakeholders on
obtaining services.
Public sector salaries and benefits to
be in line with KPIs that target improved
service, productivity and profits.
Accomplish existing initiatives to digitize
the Government, while introducing new
initiatives in line with global benchmarks.
Address and optimize underutilization of
Government Assets due to supply chain
issues, maintenance and repairs and
manpower deployment.
Conduct a review of the size and cadre
of the public sector, identifying shortages
and excesses of staff.
Training of Public Service Officers to be
improved.
C. Minimise corruption
Why?
Corruption affects economic growth.
Resources are expended on wasteful
projects.
Costs and interest rates paid by Government
are higher.
Consequentially Sri Lanka’s image as a prime
investment destination is adversely affected.
How?
Steps should be taken to move toward being
in the top 50 by 2025 with respect to the
following indicators:

Incidence of corruption by World
Economic Forum.
Corruption Perception Index by
Transparency International
14
| WORKING DRAFT
Fundamental Hygiene
Factors as a Foundation
for Sustainable Growth
Key Pillar: Socio-Economic Development
3. Social Inclusiveness is Key for Accelerated Economic Development
Why?
Sri Lanka has over the years sustained many
socio-economic programmes and thereby
achieved satisfactory progress that has
contributed to the quality of life of our
people.
In the next phase of economic development,
the envisaged increase in national income
should lead to an improvement of living
standards for all, particularly of the under-
privileged.
How?
The development of the economy should
also lead to improved benefits for workers,
better work place safety, working conditions
and facilities. Changes in legislation should
be innovative, modern and enable social
inclusion as well.
5. Restructure of the Labour Force to meet new economic realities:
Why?
As we plug into the Industrial 4.0, there will be
sectors in the economy that will require macro
re-engineering.
How?
This will require carefully crafted policies to
leverage on modern technology to drive
productivity within these sectors.
Further, it may require restructure of the
welfare system to meet demands of the
emerging workforce needs.
4. Sustainability at the Core
Why?
The development of the economy should not
be at the expense of sustainability and the
environment. It is possible for development
to take place while preserving and improving
the environment.
How?
Key areas for preserving the environment
include:
sustainable management of Cultural
Sites, National Parks,
elimination of one-time-use of Plastics,
Reforestation,
minimising pollution through use of
renewable energy sources,
and the improvement of Public Transport
vehicles through better use of Public
Transport.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 15
Sustainability
at the Core
The development of the economy should not be at
the expense of sustainability and the environment.
Where are
we now?
#1INDIA#2BANGLADESH#3NEPAL#4SOUTH ASIA2019 F
2020 F
2021 F
7.
5
7.
3
6.
0
6.
9
5.
7
7.
5
7.
4
6.
1
7.
0
5.
2
7.
5
7.
3
6.
2
7.
1
5.
3
World Bank:
https://www.worldbank.org/en/region/sar/overview
SRI LANKA:
3RD SLOWEST GROWTH IN GDP
IN THE SOUTH ASIAN REGION
#5MALDIVES#6BHUTAN#7SRI LANKA#8PAKISTAN#9AFGHANISTAN5.
4
3.
5
3.
4
2.
4
5.
4
3.
6
2.
7
3.
2
5.
2
3.
7
4.
0
3.
5
18
| WORKING DRAFT
20182018USD 89 Bn
AGRICULTURE,FORESTRY AND FISHING MANUFACTURINGCONSTRUCTIONWHOLESALE ANDRETAIL TRADE4.5
6.3
4.6
7.4
How do WE
GET THERE?
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 19
USD 134 Bn
TRANSPORTATIONFINANCIAL SERVICESOTHER SERVICESOTHER INDUSTRIALSERVICESOTHER INDUSTRIALSERVICESTAXES LESS SUBSIDIESON PRODUCTSTAXES LESS SUBSIDIESON PRODUCTS7.8
2.5
7.7
2
2.5
20252025Assumptions:
Average Real GDP Growth rate between 2020 - 2025 - 6.8%
Annual Average LKR Depreciation against USD of 4%
GDP Deflator at 4.5%
A Model
for Growth
Private Sector
Tax Income
Service Quality & Policy Execution
Investment
Policies
Society
Go
ve
rn
me
nt
Po
lic
ies
In
ve
st
me
nt
Ta
x
Inc
om
e
Improved margins
Ec
on
om
ic
Gr
ow
th
Pro
duc
tivit
y
Job
s cr
eat
ed
Eco
nom
ic m
ultip
liers
Pu
bl
ic
Se
ct
or
This model relies on a number of communication
channels-utilising public relations, media
and other intermediaries to share material
information with key stakeholders.
Po
lic
ies
Co
ns
um
er
sp
en
di
ng
In
ve
st
me
nt
So
cia
l D
ev
el
op
me
nt
Improved margins
22
| WORKING DRAFT
Tracking The
implementation
Progress
Performance Objectives, Indicators,
Targets and Responsibility
Feedback / Correction /
Continuous Improvement
CENTRAL GOVERNMENT
LOCAL GOVERNMENT
CITIZEN
INPUT
Annual Work
Plan
Programme
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 23
Measuring Effectiveness,
Efficiency & Process
PROCESS
OUTPUT
OUTCOME
Performance
Monitoring System
economic growth
External Sector
Employment Indicators
HIGH LEVEL
OBJECTIVES to
Achieve by
Goals
2018
2025
GDP Growth
3.2%
8.0%
Per Capita GDP
(USD)
4,102
5,773
Annual Average
Inflation (CCPI)
4.3%
3%
Goals
2018
2025
Exports as a % of
Imports
53%
100%
Total FDI as a % of
GDP
2.4%
5%
Current A/C
Balance as a % of
GDP
- 3.2%
+1%
Gross Official
Reserves
3.7
6
Goals
2018
2025
Unemployment %
4.4%
4.0%
Total employment
in professional/
technical/associate
professional
categories
13%
20%
2025
Fiscal Indicators
Competitiveness
Technology and
digitization
Improvement in
corruption indices
Goals
2018
2025
Tax Revenue as a %
of GDP
11.9%
18%
Primary Balance as
a % of GDP
0.6%
1-2%
surplus
Budget Deficit as a
% of GDP
5.3%
2%
Goals
2018
2025
Ease of Doing
Business Rank
100
40
Global
competitiveness
index Rank
85
50
Goals
2018
2025
Global Innovation
Index
88
60
Goals
2018
2025
Corruption
Perception Index
by Transparency
International
89
50
26
| WORKING DRAFT
The Way
We Work
As we set in motion a plan for growth, the Chamber of
Commerce has in place 18 key Working Groups, across
several identified verticals and cross-cutting sectors.
The following pages detail the focus areas identified by
each Working Group, in order to accelerate
Sri Lanka’s economic growth.
RETAIL
Financial Sector &
Capital Markets
Health
Transport &
Logistics
Higher Education
Economy
Tax
Trade
Innovation
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 27
Agriculture, Dairy &
Fisheries
Manufacturing
Tourism
Infrastructure
Exports
Plantations
SME
Power & Energy
Legislation, Regulation Governance
28
| WORKING DRAFT
INTERVENTIONS
Lead:
Mr. Suresh Shah,
CEO/Executive Director, Lion Brewery
Ceylon PLC and Former Chairman of
the Ceylon Chamber of Commerce
Members from the
Economic Policy
Steering Committee of
the Ceylon Chamber.
1. Mitigate Debt Risks
2. Improve Tax Revenue as % of GDP
General economy
working group
proposals
SECTOR: General economy
ACHIEVING TARGETS
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 29
IMPLEMENTATIONS
Establish an independent Public
Debt Office/Agency similar to the
previous Independent Debt Office
which was first mooted by the
Government in 2003/4.
Enhance CBSL laws and controls
and continue to issue Treasury
bills and bonds on behalf of the
Treasury as an autonomous body.
The Registered Stock and Security
Ordinance and Treasury Bill Act can
be amended to tighten laws related
to securities.

Implement the Medium-Term Debt
Management Strategy (2019-2023)
developed by the Ministry of Finance
and Central Bank of Sri Lanka. The
document needs to be updated
regularly to take into account the
new developments in the global and
local economy.

Implement accrual-based
accounting for Government
accounts from the current cash
based accounting system by 2024.
In the interim period to disclose
annually the total liabilities including
guarantees, amounts due for goods
and services received and subsidies
committees, pension liabilities and
amounts due on all leases.

Incentivise people to voluntarily
declare their revenue
Make opening tax files mandatory to
broaden the tax net. The NIC number
can be used as the tax file number.
Focus on ‘holy trinity ’ of options –
broadening tax base, lowering rates
and better administration
(take learnings from countries such
as Vietnam and Georgia that have
been able to improve their tax
revenue over the last 10-15 years).
30
| WORKING DRAFT
INTERVENTIONS
General economy
working group proposals
SECTOR: General economy
3. Improve FDI and export targets to 5% of GDP
and 100% of imports respectively by 2025
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 31
IMPLEMENTATIONS
Countries such as Vietnam which
have improved FDI inflows have done
so through improvement in the Ease
of Doing Business ( EODB ranking
has improved from 99 in 2014 to
69 by 2019). While taskforces are
presently established to improve
each of the ranking in the sub-indices
of the EODB, this process can be
institutionalised with a permanent
secretariat to fast-track the reforms
required. The Secretariat can be
created with secondments from the
respective institutions working on
improving the index. The Secretariat
can also look at other non-index
issues which matter in improving the
business climate of the private sector.
Trade policy that will be outward
in nature and provide access to
markets.
Unlock some of the bottlenecks
towards FDI growth such as
availability on land and labour
resources.
Set up specially designed industrial
zones which reduce bureaucratic red
tape and provide a plug and play
model for investment.
Consistently promoting an
environment of policy predictability
Review existing bilateral investment
agreements and renegotiate to
provide better investment protection
and enter into new treaties with
strategically important investment
partners. These could be coupled
with Free Trade Agreements (FTAs)
where necessary.

Improve services provided by
commercial sections of Sri Lankan
diplomatic missions and strengthen
commercial sections of some of the
key and big markets (e.g. China and
India) with more resources to assist Sri
Lankan companies (e.g. hiring locals
with good local knowledge).
32
| WORKING DRAFT
General economy
working group proposals
KEY ACTIVITIES FOR STATE OWNED ENTERPRISE REFORM
Interventions
Year of Intervention
Develop a communication strategy that outlines the necessity for reforms of the SOEs.
Immediately
Convert all commercial entities into limited liability companies.
Early 2020
The listing rules to apply immediately to all such Commercial entities to improve transparency
and Governance
Early 2020
List minority stake (up to 49%) of all commercial SOE other than banks to further facilitate
transparency and improvement of governance. Divesting can be pursued in two to three
tranches to maximise value. For example 15% in year 1, 15% in year 3 & 19% in year 5.
2020 onwards
Divest non-strategic commercial SOEs completely through a transparent process.
2020 onwards
Identify the impact of subsidised pricing both in terms of the cost of underpricing and the
financing cost due to subsiding pricing. Shift the cost of subsidisation, where needed, to the
Treasury.
2020
The executive management in SOEs to consist of professionals who have been full time in those
entities or have experience in such industries. There should be no political appointees in the
executive management.
Continuous
Bring all SOEs under a holding company. The board of the holding company to be appointed
by the Constitutional Council. The board would be responsible initially to appoint SOE
boards. Thereafter, by respective boards with the recommendation of respective nomination
committees, subject to ratification by the board of the holding company. These directors of the
holding company and the SOE boards would have qualifying criteria and term limits .
2H 2020
All SOEs including the holding company shall follow accounting standards as stipulated by the
ICA including the publishing of consolidated accounts.
2021 onwards
SECTOR: General economy
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 33
Interventions
Year of Intervention
State banks should be able to extend credit to other SOEs as long as the transaction is at
arm’s length and has concurrence of the respective RPT committee (of both the bank and
the SOE).
2020
Develop a strategic plan with KPIs for all SOEs (if it is not available) and the board to be held
responsible for such implementation.
2020
Avoid conflict of interest and ensure a level playing field for operation by limiting the line
Ministry ’s role to policy making and regulation. A ministry responsible for regulating an industry
should not be responsible for managing an SOE in that sector.
2020 onwards
34
| WORKING DRAFT
TAX working
group proposals
TENETS OF TAXATION
BROAD PRINCIPLES
SECTOR: TAX
Lead:
Mr. Duminda Hulangamuwa,
Partner, Ernst & Young
Members of the working
group:
Ms. Nilanthi Sivapragasam,
Chief Financial Officer,
Aitken Spence PLC
Ms. Shamila Jayasekara,
Partner, Head of Tax,
KPMG Sri Lanka
Mr. N R Gajendran,
Senior Partner,
Gajma & Co Chartered Accountants
Mr. Naomal Gunawardena,
Partner,
Nithya Partners
Mr. Amal Badugodahewa,
Director, Tax,
Carson Cumberbatch PLC
Ms. Nisreen Rehmanjee,
Head of Tax Strategy,
John Keells Holdings PLC
Mr. Roshan Anselm,
Group Tax Manager,
Hayleys PLC
Certainty: Taxes ought to be certain and not arbitrary
Accountability and regular review, tax shifting and
hypothecation have a role to play
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 35
INTERVENTIONS
Provide consistency in the tax
regime in the period leading up to
2025 and avoid the application of
retrospective taxes. Maintain existing
tax rates including the concessionary
tax rates (e.g. for SMEs, exports
at 14%) until we move toward an
equitable tax base.
Taxes should be aligned to national
policy, and essentially be a tool for
signalling Policy.
Establish a think-tank on tax policy
that will perform rigorous analysis prior
to implementation of tax policy. It will
enable the evaluating, monitoring
and implementation of policy
initiatives that would be backed
by research and would hold the
Government accountable for policy
actions. The think-tank should also
have links with the private sector, so
that policies and projects that are
cognisant of the private sector would
be implemented. The think-tank can
consider policies in addressing the
challenges in taxation of the digital
economy, promote policies that
will provide more positive societal
behaviour towards protecting the
environment.
Hypothecation has an important role
play in pooling funds for dedicated
expenditure purposes. Such revenue
needs to be managed and utilised
in a transparent efficient manner.
Create metrics to evaluate efficacy
of the tax policy. This is vital to win
taxpayer confidence and gain
taxpayer “buy-in.”
Consultations: Any new tax should
be opened to the public for a
reasonable period for discussion
and debate.
36
| WORKING DRAFT
TAX working
group proposals
INTERVENTIONS
SECTOR: TAX
Mr. Amila Priyadarshana,
General Manager Finance,
Hemas Holdings PLC
Mr. Priyadharshana Ekanayake,
National Finance Director,
Unilever Sri Lanka (Pvt) Ltd.
Ms. Charmaine Tillekeratne,
Director, Tax Services,
PricewaterhouseCoopers
Mr. Prasanna de Silva,
Director, Credit,
Central Finance Co. PLC
Mr. Lalith Yatiwella,
Finance Director,
Singer (Sri Lanka) PLC
Ms. Thilani Perera,
Chief Manager, Tax and Finance,
Commercial Bank
Mr. Brandon Morris,
Acting Managing Director,
Associated Motorways (Private) Limited
Mr. Aruna Deepthikumara,
Group Chief Financial Officer,
Commercial Bank of Ceylon PLC
Mr. Trinesh Fernando,
General Counsel / Vice President, Group
Legal and Regulatory,
Dialog Axiata PLC
Mr. Nilam Jayasinghe
Group Finance Director,
Ceylon Biscuits Limited
OTHER INTERVENTIONS
Equity and fair play in the tax administration
Tax administration and competitiveness
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 37
IMPLEMENTATIONS
Appoint a Tax Ombudsman — presently there are provisions established for this appointment, though it has not been made in the
last 12 years. Furthermore, authority should be given to strengthen this office by an Act of Parliament.
Tax regime must be globally competitive
in efforts to attract new capital, ensure
progressive outcomes, avoid regressive
outcomes and be well administered.
Establishment of a rational tariff
structure that promotes the macro-
economic growth objectives of the
economy.
Provide investment incentives for
anchor investment in sectors that
have potential to drive export and
FDI into the country.

Improve tax administration by
improving capacity of the Inland
Revenue Department (IRD)
y Develop industry specific
knowledge within the IRD
y
Re-look at the operating structure
and procedures of the IRD
y
Improve implementation of RAMIS
38
| WORKING DRAFT
TRADE working
group proposals
INTERVENTIONS
SECTOR: Trade
Members of the working
group:
Mr. Husein Esufally
Chairman,
Hemas Holdings PLC
Ms. Subhashini Abeysinghe,
Research Director,
Verité Research
Mr. Sheamalee Wickramasinghe,
Managing Director, Ceylon Biscuits Ltd
Mr. Tuli Cooray,
Secretary General,
Joint Apparel Association Forum
Dr. Janaka Wijayasiri,
Research Fellow,
The Institute of Policy Studies
Mr. Dinesh de Silva,
Head of Shipping,
Unilever Sri Lanka (Pvt) Ltd.
Mr. Nishan Nanayakkara,
Chairman, The Import Section of
Ceylon Chamber / General Manager,
Ceylon Biscuits Ltd.
Mr. Prabash Subasinghe,
Managing Director,
Global Rubber Industries and Global
Seafood
a) Formulation of a national policy directive to address
structural issues affecting trade.
b) Expansion of Sri Lanka’s trade interests through
signing of strategic trade agreements [Formulation
of a ‘Trade Agreement’ (TA) strategy based on the
fundamentals of ‘maximising gains and minimising
negative implications’].
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 39
IMPLEMENTATIONS
Rational allocation of Government
departments and ministries to improve
coordination, coherence, and
integration in trade policy related
decision making process.
Establishment of a rational tariff
structure that promotes macro-
economic growth objectives of the
economy. Rationalisation of tariffs is a
prerequisite for liberalisation of tariffs.
In the rationalisation process, both
import duties (both import duty and
para-tariffs) and export levies need
to be considered.
Establishment of the proposed
Trade and Productivity Commission
through a Parliamentary Act with a
clear mandate to make independent
and transparent decisions on tariff
rationalisation based on stakeholder
consultations and scientific research.
y
Fixing para tariffs that undermines
the competitiveness measures
in order for local industries to
leverage on liberalisation efforts
in line with commitments under the
multilateral trade regime.
y Develop and implement
product standards (both quality
and technical) to safeguard
legitimate interests and concerns
of both the consumer and the
producer.
Formulation of a TA strategy that
clear documents; the process that
needs to be followed in arriving
at a decision for negotiation and
conclusion of the TAs .
Trade agreements that Sri Lanka
becomes party to must be anchored
to the country ’s national and
strategic interests, signed after timely,
transparent and broad-based
domestic consultations with relevant
stakeholder groups.
Conducting feasibility studies that
informs the potential economic
impact of the agreements/unilateral
liberalisations under consideration.
Decision to entering into trade
agreements should not be based
on narrow considerations or vested
interests, but must be based on
good research and evidence taking
a holistic view of the overall benefits
to the country. It should be based on
the outcome of a sound feasibility
study which also defines the scope of
the agreement (how comprehensive/
broad the agreement should be).
Sustaining acquired skills and
building further technical capacity
of the negotiating team and the
supporting team of researches/
technocrats.
The capacity of the trade
agreement negotiating team must
be strengthened by institutionalising
the process. It is important to
ensure sustainability and the
40
| WORKING DRAFT
TRADE working
group proposals
INTERVENTIONS
SECTOR: Trade
Mr. Saiffudin Jafferjee,
Managing Director,
Lanka Garment Manufacturing Co Ltd
Ms. Nadie Kahatapitiya Algama,
Director Marketing & Strategy,
KIK Lanka (Pvt) Ltd.
Mr. Anura Warnakulasooriya,
Director,
Midaya Ceramic Company (Pvt) Ltd.
Mr. Suresh Ellawala,
Director,
Ellawala Horticulture (Pvt) Ltd.
Mr. Jagath Fernando,
Managing Director,
Jagro (Pvt) Ltd.
Mr. Justin Seneviratne,
Director,
Lalan Rubbers (Pvt) Ltd.
Mr. Ananda Pathirage,
Director,
Hayleys Agriculture Holding Limited
Mr. Ganesh Deivanayagam,
Chairman,
Eswaran Brothers Exports (Pvt) Ltd.
Mr. Ashan Refai,
Managing Director,
ZAM Gems (Pvt) Ltd.
c) Accelerating reforms to resolve domestic barriers to
trade and boost competitiveness.
d) Continuity of the implementation of the National
Export Strategy (NES).
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 41
IMPLEMENTATIONS
continuity of the skills acquired
and experience gained. This will
build competency of the team
on negotiating skills while allowing
specialised skills to be brought in to
the negotiating team and also to
build the confidence amongst the
stakeholders on the process followed.
The institutionalisation of the trade
negotiation team will also ensure
that more structured consultations
with related stakeholders will
provide strategic input for ongoing
negotiations.
Scientific approach to formulation
of offensive/defensive schedules
for goods and services based
on statistical analysis, empirical
research and structured stakeholder
consultations.
y
Building a database with
offensive and defensive interests
and skill gaps to supports service
negotiations
Entering into Mutual Recognition
Agreements to promote market
access gained through tariff
liberalisation.
Review/renegotiate existing
investment and tax treaties and
negotiate new treaties where
necessary to improves the investment
competitiveness of Sri Lanka
Expediting the implementation of
trade facilitation measures in a
transparent manner with a Trade
Facilitation Agreement (TFA)+
approach. Speedy implementation
of the digital National Single
Window is the priority action point
under Category C TFA measures.
Speed up accession to the Madrid
Protocol
Setting up accredited laboratories
for certification of export products
(MRAs can be used as a vehicle
to facilitate market entry of
products facilitated by accredited
laboratories).
NES lays out a detailed roadmap
for faster export growth with a focus
on six focus sectors and three trade
support functions for all exports
goods and services.
The plan of actions that are
developed through wide stakeholder
consultations need to be given a
focused implementation drive in the
next five years with flexibility and
adaptability to timely needs.
42
| WORKING DRAFT
TRADE working
group proposals
SECTOR: Trade
Other sector specific interventions to spur export growth that are not
covered by the National Export Strategy
Sector
Intervention
Gem and Jewellery
Establishment of a world class testing and certification centre for the gem and jewellery industry as a
PPP initiative.
Development of Sri Lanka as a world class trading hub for gem and jewellery.
Rubber
Implementation of the rubber master plan.
Fisheries
Development of Sri Lanka as a reprocessing hub for fisheries exports. Sri Lanka need to organise as a
bigger reprocessing arm and, there should be policies in bringing vessels, proper rules for reprocessing
facilitating investment, etc.
Provide land and promote investment to promote aqua production such as shrimps and prawns.
Fruits and Vegetables
Permit import of raw material to facilitate reprocessing for exports.
Installing cold storage facilities at airports capable of storing food exports, while preserving their quality
standards.
Creation of a knowledge and information platform to share information with regard to growing of crop
such as what to grow, how to grow (inter-cropping, etc.) and when to grow certain crops to optimise
yield and price.
Tea
Complete automation of Colombo Tea Auction.
Automation of the supply chain of the tea industry from plucking to selling will provide real time market
information while enhancing process efficiency, traceability, eliminate malpractices, better price
discovery and market information for the stakeholders.
Establish an accredited laboratory for chemical testing in Sri Lanka to improve the quality of
infrastructure and promote export standards.
The country has a sizeable outflow of foreign exchange presently to obtain these services from labs
overseas for testing with cost that ranges from USD 150-200 per sample.
Proper implementation of Global Ceylon Tea campaign in consultation with the tea industry
stakeholders.
Protect the Ceylon Tea Brand name / Image through registration of Ceylon Tea Geographical
Indication (GI) in all important out-markets.
Make GMP mandatory for all tea factories. Introduce heavy penalties for the manufacturers of
adulterated teas.
Facilitate research and development for generic promotion of tea and tea-based products, such as
the potential of tea as a food item, ability to be used in nutraceutical and pharmaceutical industries,
global flavour on and fragrance industry.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 43
Trade
Gem and Jewellery
Fruits and Vegetables
Rubber
Tea
Fisheries
44
| WORKING DRAFT
INTERVENTIONS
Legislation, Regulations
and Governance working
group proposals
SECTOR: Legislation, Regulations and Governance
1.0 Stability of the nation
2.0 Creation of a nation with a Sri Lankan identity
Lead:
Ms. Dilani Alagaratnam,
President, Group Legal & HR,
John Keells Holdings
Members of the working
group:
Prof. Rohan Samarajiva
Founding Chair, LIRNEasia & Chairman,
ICTA
Dr. J.C. Swaminathan
Partner, Julius & Creasy
Dr. Arittha Wikramanayake
Precedent Partner, Nithya Partners
Ms. Sabrina Esufally
Business Development, Senior Manager,
Morrisons PLC
Mr. Aruna Samarajewa
Partner, Nithya Partners
Mr. Keerthi Pathiraja
Company Secretary & Legal Counsel,
Nestlé Lanka PLC.
Mr. Trinesh Fernando
General Counsel / Vice President - Group
Legal and Regulator, Dialog Axiata PLC
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 45
IMPLEMENTATIONS
Preservation of National Security
and Law & Order
(1) Establish a body that is responsible for
the security and safety of the nation
akin to the National Security Council,
which should include as its members the
president, the prime minister, the relevant
minister and deputy minister tasked
with the responsibility for defense and
law & order. The body should also be
responsible, inter alia,
(a) to identify a single source of
communication relating to matters
of national security, preferably a
member of the body established
as aforesaid;
(b) set up a national level threat level
indicator which is updated, as
determined by the aforesaid body,
from time to time and in a timely
fashion.
(2) Ensure effective enforcement of the
applicable laws especially, and in
particular, towards eliminating terrorist
and violent extremist content online
in a manner consistent with the rule of
law and the obligations the country
has undertaken internationally. In this
connection we would like to draw
reference to the Christchurch Call
to Action, which sets out a well-
considered basis for stakeholder
engagement and action.
There is a need to integrate diverse
groups defined by religion, language,
cultural, social or economic groupings
to create a Sri Lankan identity, if the
Nation is to prosper. The Constitution must
guarantee all groupings and communities
equality, power sharing whilst preserving
the supremacy of the Parliament. This is the
relevant context to the Constitution being
acceptable to all groups of people in the
country, which no doubt will result in the
stability and prosperity of the country.
In this connection sections 291A and
291B of the Penal Code, which relate to
2 offences dealing with religious feelings
should be extended to capture any ethnic
group or a community.
46
| WORKING DRAFT
Legislation, Regulations and
Governance working group proposals
INTERVENTIONS
SECTOR: Legislation, Regulations and Governance
3.0 Efficient Government administration
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 47
IMPLEMENTATIONS
(I)
It is important that there is a system
of governance, enshrined in the
Constitution, which would not result
in a duality with respect to decision
making. There must be a single source
of definitive/authoritative information
and thus one centre of power as dual
power centres in the Government is a
hindrance to development.
(2) Minsters of the Government, by
whatever name they are called, should
be made accountable for the delivery
of the key objectives of a government.

We recommend that performance
indicators, in line with Government
objectives, which are specific and
measurable be set up for each
ministry and made public at the
beginning of every fiscal year and
the performance against the same
be considered in allocating funds
and allocating ministries in the
ensuing years. The desire is that the
ministers’ annual performance against
goals is available to the public and
that the incumbent Government will
allocate funds and ministries based on
performance.

To this end it is recommended that
all ministers agree with the prime
minister their scope of work and their
deliverables, which are specific, time
bound and measurable. The ministers
must sign a contract at the time
they take over the portfolios and it
must be made public. This measure
seeks to ensure that the policy of the
Government in power is executed
in an orderly fashion, in line with the
expectations of the voting public.
(3) There should be national policies
formulated with respect to key areas
such as education, health, foreign
investments etc. and these policies
should not change with changes in
Government.
(4) National policies, once formulated,
should be administered by a set of
people who are fit and proper and who
do not change roles based on change
of governments or ministers. Ensure that
secretaries to ministries are competent
and the national policies are carried
through, untouched by changes to the
subject ministers. It is envisaged that the
ministers’ role would be a facilitative
role and hence will not detract from this
principle.
(5) Allocating subjects to ministers should
be based on merit (fit and proper for
the delivery of the expectations of the
portfolio) and not based on seniority
in the governing party, in parliament or
otherwise. This will result in more efficient
use of available resources.
(6) In determining ministerial portfolios,
similar subject matter must come
within the scope of one minister.
This will assist in making decisions
that impact the subject matter by
taking into consideration all relevant
matters/interests and in a holistic
fashion. Subjects which are totally
unconnected should not be assigned
to a minister.
48
| WORKING DRAFT
Legislation, Regulations and
Governance working group proposals
INTERVENTIONS
SECTOR: Legislation, Regulations and Governance
4.0 Certainty as to the operating framework
5.0 Creation of New Types of Jobs
6.0 Investment Law Regime
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 49
IMPLEMENTATIONS
National Budget
Announcements made in a National
Budget, which require changes to the
regulatory regime, should be enacted
within a time-frame of 30 to 90 days of the
passing of the National Budget to ensure
that there is certainty.
To facilitate this draft bills / gazettes
incorporating changes to tax legislation
that are to be announced during the
budget should be compiled and ready
for submission to cabinet no sooner the
Budget is passed by Parliament. This would
ensure that the time lag between the
budget being presented to Parliament
and necessary changes to legislation to
support same is minimised.
Retrospective application of laws
As a general rule enacting laws and
regulations with retrospective operation
should be avoided.
Creating an environment in which
e-commerce thrives
(1) Introduction of a di minimis scheme to
enable SMEs and e-commerce markets
as this would encourage and support
new trading options and reduce
transaction costs.
(2) To abolish the requirement for manual
submission of Form 1 and 2 under
Direction 1 of 2017 under the Foreign
Exchange Act as it hinders trade
transactions under documentary
credits and documentary collections.
This obligation should be placed on
the banks to obtain, maintain and
report the required details.
(3) Ensuring that the data protection law
is enacted at the earliest.
(4) Ensuring that cyber security related
measures are in place.
(5) Inward remittances for online payments

There is an opportunity loss due to
the lack of availability of international
online payment platforms in Sri Lanka
that will enable businesses to directly
receive money for goods and services
provided overseas. This is a low-
hanging fruit that will help the digital
economy and SMEs in Sri Lanka to
scale and grow their businesses.
It is important to rationalise the following
laws towards realising the objectives of
these statutes.
(1) Amending Schedule B of the Board
of Investment Act to list the Foreign
Exchange Act of 2017 in place of the
abolished Exchange Control Act of
1953.
(2) Board of Investment Act and Strategic
Development Acts should be amended
to include, in the relevant schedules, the
Inland Revenue Act No. 24 of 2017.
50
| WORKING DRAFT
Legislation, Regulations and
Governance working group proposals
INTERVENTIONS
SECTOR: Legislation, Regulations and Governance
7.0 Intellectual Property Law regime
8.0 Competition Law
9.0 Labour Law Regime
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 51
IMPLEMENTATIONS
(1) Enabling legislation consequent to Sri Lanka’s accession to the Madrid Protocol must be put in place.
(2) Provisions relating to registration Geographic Indications should be enacted.
Sri Lanka presently does not have a law
for the regulation of competition. When
the Consumer Affairs Authority Act No. 9 of
2003 was enacted, it repealed the Fair
Trading Commission Act No. 1 of 1987
which had substantive provisions on the
regulation of mergers and monopolies.
These provisions were excluded from
the Consumer Affairs Authority Act with
the intention that the Government would
subsequently enact a special law to deal
with mergers and monopolies. However, this
was not followed up thereafter, resulting in a
lacuna in the regulation of competition.
Consequently, there is no law to deal
with mergers and monopolies. This poses
severe threats to maintaining a fair market
and a level playing field. There are
several instances where large entities have
deliberately violated basic principles of
competition law and engaged in overt
anti-competitive behaviour due to this
failure. We believe that this could be
aggravated in the future with increasing
competition from large overseas
conglomerates entering the market.
Foreign investors are concerned when they
learn that we have not competition law in
the country since such laws are standard
feature in every market even in the region.
It is therefore imperative that laws be
enacted for the purpose of protecting
consumers by creating a balanced
framework for market behaviour.
Amending the Labour Law regime to
capture the following in the main based
on a recognition of the need to generate
employment, bring women into the work
force and create a meritocracy. Labour
laws must promote flexible work and current
work arrangements such as sub-contracting
and also strengthen the employer-
employee relationship.
(1) Enable night work for women in a
controlled environment
(2) Encourage child care facilities based
on what has been proposed by the
Government in the recent Budget
(3) Regulate ‘Contract Labour ’ providers
as any other employer, being providers
of a valuable service.
(4) Facilitate diverse forms of employment
such as part time work, work from home
/ distant locations arrangements,
flexible hours of work.
(5) Enable a five day work week, so as
to permit businesses to determine the
hours of work suited for their respective
businesses.
(6) Ensure that the safety net envisaged
at the time of the enactment of the
Termination of Employment (Special
Provisions) Act is put in place and
permit businesses to lay off employees
based on the current compensation
formula, without a requirement of
having to obtain the consent of the
Commissioner of Labour.
(7) Amend the Payment of Gratuity Act,
Shop and Office Act, etc. so as to
accommodate concepts such as ‘part
time work’.
52
| WORKING DRAFT
Legislation, Regulations and
Governance working group proposals
INTERVENTIONS
SECTOR: Legislation, Regulations and Governance
10.0 Land Law regime
11.0 Company Law regime
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 53
IMPLEMENTATIONS
(8) Ensure that the proposed Employment
Law, currently in draft form, be enacted
at the earliest, after consulting with the
stakeholders.
(9) Provide an efficient mechanism by
which foreign labour required in the
country is permitted work visas.
(10) Amend existing regulations which
prohibits spouses of foreign employees
from working and obtaining facilities
such as a driving license, as this serves
as a deterrent to technology transfer
to locals.
Amendment to the Registration of
Title Act 21 of 1988
Sections 33 and 59 of the Act should be
amended as it provides that no court can
question the title and change the register
if possession has been established, unless
the title has been obtained through
fraudulent means. This limitation is too
restrictive and acts to the detriment of the
affected persons.
Apartment Ownership Law
Express provision for horizontal
condominiumisation should be set out.
Currently the Condominium Management
Authority does not recognise the ability to
use the Apartment Ownership Law in this
manner is a hindrance to better utilisation
of land parcels.
Real Estate Investment Trusts (REITs)
Legal recognition for establishment of
REITs is required to grow and develop
our property market and realise its full
potential.
Recording of interests of the State
in land
Until such time the registration of title
across the country is completed, which at
its current pace is likely to take a very long
time, it is important to have a mechanism
for recording of State interests, if any,
with regard to land parcels. Lack of this
creates many issues to the public at large.
(1) Provisions akin to Chapter 11 in
the USA are put in place to assist
companies in distress.
(2) Any modification necessary to Winding
Up procedure and Administrations
procedure.
(3) Registration of beneficial owners in
the case of trust to prevent money
laundering and other illegal activities
following trends in company legislation
in Europe.
54
| WORKING DRAFT
Legislation, Regulations and
Governance working group proposals
INTERVENTIONS
SECTOR: Legislation, Regulations and Governance
12.0 Access to information
13.0 Environmental Law regime
15.0 Laws and regulations currently in draft form
14.0 Alternative Dispute Resolution mechanisms
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 55
IMPLEMENTATIONS
Ability to access and download
documents from a computer system with
respect to documentation available to
the public and maintained by Government
bodies should be facilitated. The
requirement is acute particularly in relation
to court records, company registry and
Intellectual Property Office documentation
and Land Registry documents. The ideal
solution is a comprehensive automation of
the courts.
Sr Lanka must be an e-driven country with
‘linked databases” which enable process
driven “transacting” with minimal human
interaction. This will reduce corruption.
It is important to proceduralise as many
transactions as possible, particularly day
to day transactions, as it will make the
Government efficient and leave less room
for corruption.
The law should be strengthened to
encourage the public to Refuse, Reduce,
Reuse and Recycle plastic. In this context
enabling legislative changes to be
introduced to permit supermarkets to
charge for the issue of plastic bags,
a model that has been tested and
found to be successful in substantially
reducing the demand for plastic bags by
consumers worldwide. Currently this is not
possible due to a regulation issued by
the Consumer Affairs Authority (CAA) in
2008 that prevents the same, which the
CAA is unable to withdraw due as it was a
regulation made pursuant to a commitment
made to the Supreme Court of
Sri Lanka.
The Chamber also recommends that the
Government takes an inventory of laws
and regulations
i.
drafted and awaiting submission to the
cabinet of ministers for approval;
ii. approved by the cabinet of ministers
but awaiting final drafts from the Legal
Draftsman;
We believe that work already done
should be resurrected and expedited,
as these are low hanging fruits and
would clearly benefit the Ease of
Doing Business Indices.

There is value in identifying the laws
that are currently in the statute books,
but are obsolete or have not been
used in decades and repealing them.
An effective dispute resolution
mechanism for commercial disputes is
essential for economic development.
Government assistance is requested to
make Colombo a centre for alternative
dispute resolution. Governments in the
region such as Hong Kong, Singapore
and Maldives, for example, support this
endeavour by providing infrastructure
including a suitable venue and resources
for staffing for the development of the
dispute resolution centres in their relevant
countries. Accordingly, we request that
CCC-ICLP ADR Centre, established
with the participation of the Ceylon
Chamber of Commerce, be provided
with assistance especially in obtaining
from the Government a venue for holding
mediations/arbitrations. The proposed
rules of mediation and arbitration of the
CCC-ICLP ADR centre seek to address
the main obstacles for corporates and
individuals from seeking ADR solutions,
including the reduction of the time taken
to resolve disputes and also keeping the
costs within agreed limits.
56
| WORKING DRAFT
POLICY INTERVENTIONS / KEY ACTIVITIES
Power and
energy working
group proposals
SECTOR: Power and Energy
Lead:
Mr. Saliya Wickramasuriya,
Independent Energy Expert
Mr. Asgi Akbarally
Director, Akbar Brothers (Pvt) Ltd.
Members are
constituted from
the existing National
Agenda Committee
of the Chamber on
Energy
1.
Restructure and standardise the bidding processes including Request For
Proposals (RFPs) to increase competition, compare bids accurately, and capture
maximum long-term economic value.
2.
Engage professional industry advisory companies to protect national interest
when evaluating and negotiating energy contracts with international parties, until
Sri Lankan experts gain capacity.
3. Mandate the National Procurement Commission (NPC) to perform the functions
of the Procurement Appeals Board (PAB), so that the appeals process could be
carried out in an independent and impartial manner.
4. Allow ‘power wheeling’ within the transmission network. This measure could lead
to significant investment in power generation by major industries and help in
achieving the Non-Conventional Renewable Energy (NCRE) generation targets,
while reducing CEB’s need for generation capacity additions.
5. Amend the Electricity Act to exclude the requirement to bid for small-scale NCRE
projects and implement a ‘Feed-in-Tariff ’ with agreed formulae and periodic rate
revision. Applications may include a forfeitable bond, and approvals need to be
time limited.
6.
Rationalise short-term LNG imports with upstream development timelines. Strategic
LNG imports in the short term through flexible contracts, use of an offshore
delivery solution (FSRU or FSU+ barge) instead of land-based terminal, would
be beneficial in balancing imported LNG with possible natural gas production
in the future. Ideally, this could be achieved through agreements with institutions
involved in both exploration and the LNG retail business and by giving control
of the LNG supply portfolio to the Ministry of Petroleum Resources Development,
who currently has responsibility for both upstream and downstream gas.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 57
7. Address the lack of an independent regulator in the petroleum. This can be
achieved through legally empowering the regulator (Public Utilities Commission
of Sri Lanka) with clearly defined roles and responsibilities. It must further be noted
that the role of the regulator should ideally be an evolving one.
8. Develop a technology roadmap for a 100% (renewable/indigenous) grid, utilising
global expertise to create a notional generation plan for alternative scenarios.
9.
Phase in unbundling of the CEB based on functionality, with independent
financial reporting, beginning with independent accounting between generation
units, transmission licensees, and distribution units. CEB to conduct mandatory
dispatch audits periodically to ensure transparency and good practices within
the system. Listing a percentage of State-Owned Enterprises (SOEs) on the stock
market would also help to increase public oversight and increase accountability.
10. Attract private sector participation in the sector through public private
partnerships, including in electricity transmission and distribution.
11. Introduce Key Performance Indicators (KPIs) aligned with economic and
environmental goals for the utility companies.
12. Align generation planning with sustainability goals and in-line with technological
trends of the sector. Planning should be restricted to a single currency, with a
sensitivity analysis taking into consideration full social and environmental cost.
Full report with detail interventions can be
found in this publication -
https://drive.google.com/file/d/1sKFtvI46
pZV9C48rKIrUyMWoS5KwRUaJ/view
58
| WORKING DRAFT
a) Amalgamate NEDA, IDB, and other related public sector
institutions (such as Small Enterprises Development Division)
working on the SME sector to create an “SME authority”. This
which will act as an umbrella organisation, responsible for SME
policy, advocacy and coordination of proposed island-wide
one stop shops. The existing staff and resources should be
utilised without additional burden to Government coffers.
1. Streamline SME development ecosystem and create
an enabling environment.
INTERVENTIONS
Lead:
Mr. Arjuna Herath,
Senior Partner E&Y
Members of the working
group:
Ms. Samadanie Kiriwandeniya,
Chairperson, SDB Bank
Mr. Hasitha Wijesundara,
Senior Advisory, GIZ SME Sector
Development Programme
Mr. Sujeewa Rajapakse,
Managing Partner, BDO Partners
Mr. Jude Fernando,
Deputy General Manager,
SME & Midmarket
Hatton National Bank PLC
Mr. H. M. S. Lakshman
Wijeyawardene
Director, NEDA
SME WORKING
GROUP PROPOSALS
SECTOR: SME Development
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 59
Formulate a SME Advisory Council
under the relevant line ministry,
as the sole facilitator for the
establishment of the SME Authority
(under MOIC), which will consist
of key representatives of the
relevant Government ministries,
institutes, agencies (including
CBSL), commercial banks, chambers,
universities and more.
Formulate mandatory, statutory
amendments to the National
Enterprise Development Authority
Act, No. 17 of 2006 and Industrial
Development Act No.36 of 1969.
Enact a new Act to govern the SME
Authority, and grant it with exclusive
mandate and power to serve the
SME sector.
Map out current services and
develop a detailed plan for
transforming the existing structures
and strategies that the selected
Government institutions practice
and motivate these institutions to
adhere with an island-wide SME
Development Strategy.
Pool in qualified resources from
NEDA and IDB to work for the
amalgamated entity and, strengthen
the capacity of the staff on policy
analysis, performance monitoring, inter
and intra institutional coordination,
database management and
dissemination of information.
Facilitate provision of information/
guidance for SMEs regarding
regulatory and institutional
procedural requirements in carrying
out their businesses through the
website of the SME Authority.
IMPLEMENTATIONS
60
| WORKING DRAFT
INTERVENTIONS
b) Establish district level “one stop shops” as a focal point of
assistance for SMEs to coordinate and facilitate service deliveries
including, but not limited to licensing, registration, and business
development services (using the existing resources).
c) Develop a centralised SME database
d) Establish a common SME definition that is excepted by all institutions
and policymakers
SME WORKING
GROUP PROPOSALS
SECTOR: SME Development
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 61
IMPLEMENTATIONS
SME Authority to coordinate
the programmes of multiplicity of
agencies serving and assisting SMEs
at a regional level by pooling in
resources from government institutes
(such as NEDA, IDB, SED, Vidhatha
Centres), establishing a clear
communication line and provisioning
of solid training to selected staff.
Develop a consultative body with
the potential private agencies/
organisations (including business
consultants and banks) to be
involved in service and information
provision at the one stop shops,
specially to facilitate business
development services.
Technologically enable the one
stop shops by way of a dedicated
portal to allow SMEs to direct their
requirements online through an
application, which will ultimately get
directed to the respective agency
in order for timely and quality service
delivery.
Carry out a census to collate the most recent information on SMEs which will then be used by the proposed authority in decision
making and work of initiatives such as the one stop shops.
The SME Authority to take required steps to ensure the national level definition is being followed island-wide by all the parties. The
Authority will also take actions to revisit the national SME definition once in every three years based on the economic and business
development in the country (unless there is a major change in the economic structure).
62
| WORKING DRAFT
INTERVENTIONS
2. Improve access to finance for SMEs
3. Facilitate SME access to markets
SME WORKING
GROUP PROPOSALS
SECTOR: SME Development
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 63
IMPLEMENTATIONS
Establish a “Credit Guarantee
Institution”, under the CBSL, as a
channel for SMEs to access credit
facilities from lending institutions
(commercial banks) without a
collateral, at a reasonable rate.
y Complete required regulatory
amendments to support the
establishment of the credit
guarantee institution.
y Use the mechanism of PPP, where
CBSL will act as the funding
and monitoring entity, whilst the
lending institutions will provide
SME funding accepting the
guarantee provided.
Establish a separate SME (unit) within
regional development department of
CBSL for regulation of SME loans
Set up a long-term SME Loan Fund,
with the donor community support
(donations, gifts, grants), loans or any
other source of funding, administered
by the CBSL SME Unit.
Create a linkage between banks
and suggested one stop shops, as a
platform for SMEs to link with banks to
resolve their access to finance issues.
Uplift equity financing mechanisms for
the SMEs through incentivising setting
up venture capital mechanisms
at District level (channel funds
on concessionary terms to VC
companies, tax concessions).
Provide regulatory incentives to
encourage banks to increase
lending to SMEs (eg; reduce risk
weightage of lending to SMEs)

Increase exports by SMEs by 20%
over the period of three years.
Formulate effective Government
policies to create linkages and
facilitate market for goods and
services of SMEs.
y
Public sector retail shops to
dedicate certain amount of shelf
space specifically for SMEs.
y
Facilitate large private
corporates to create linkages
with SMEs.
Upgrade and popularise SME.lk as
an effective portal for SME trade,
which will also facilitate e-commerce.
Enhance opportunities for SMEs
to participate in foreign trade
promotion exhibitions.
Organise regular SME trade fairs
through PPP.
Support SMEs to gain e-marketing
skills and promote e-marketing/e-
commerce.
64
| WORKING DRAFT
INTERVENTIONS
4. Scaling up SMEs
5. Entrepreneurship and skills development with a
focus on women’s entrepreneurship - Scarcity of
skilled workers in SMEs has been a major issue. The
sector is struggling to attract trained workers and
to retain skilled workers for efficient and high-quality
production and service delivery.
SME WORKING
GROUP PROPOSALS
SECTOR: SME Development
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 65
IMPLEMENTATIONS
Upon establishing the SME
database, look at targets to
elevate a certain % of SMEs in each
category (micro, small, medium) to
the next category
Establishment of SME specific
industrial zones.
Promote business incubation through
SME Authority and one stop shops.
Create / update a registry of all
SME training / business development
services providers.
To overcome these:
Expand vocational training with the
support from the private sector
y Allocate more resources for the
vocational training institutes
y
Timely update the curricula of
vocational training to suit the
changing economic requirements
PPP training arrangements with some
tax incentives for private sector
engagement.
Loan facilities at concessionary rates
for training and development under
strict supervision.
Encourage universities and other
tertiary sector institutions to provide
training support for SMEs.
Promote industry specific technical
training jointly with sub sector specific
institutions (e.g. Gem and Jewellery
Institute)
Presently there is a low female labour
force participation in the workforce
that is not utilised for the economic
development in the country. Lack
of social acceptance, technical
know-how, finance facilities, access
to networks, access to and influence
policy makers are some issues
faced by women entrepreneurs. The
aforementioned implementation
initiatives should be implemented with
focus given towards women.
Innovation and
Digitisation working
group proposals
SECTOR: Innovation and Digitisation


Consumer
Export
Private Sector
Import
Manufacturing 4.0Logistics and TransportAgriculture 4.0Livestock/Aquatic 4.0Construction 4.0Tourism






Digital Identity / Authentication
Capacity Building (STEM)
Public Sector
Domestic
Downstream Enablers
Banking and FinanceHealthcare 4.0Retail 4.0Etc.Digital/E-commerce and Payments
E-Government - Tax, Customs, Law & Order
Industry
4.0
Upstream Enablers
Industry 4.0 Platforms
GDP
Big Data, Analytics and AI
IoT Platforms (device and vertical independence)
Cloud Infrastructure - Compute, Storage
Broadband and Connectivity Infrastructure (4G, WTTX, FFTX, 5G, etc.)
68
| WORKING DRAFT
Innovation and Digitisation
working group proposals
SECTOR: Innovation and Digitisation
KEY ACTIVITIES
Interventions
Establish global payment platforms in Sri Lanka such that there will be an increase in electronic payment penetration from the current 47%
(2015) and more SMEs will be able to connect with the digital marketplace.
Develop a policy framework to implement national strategy for Big Data Analytics and AI. The proposed policy should establish
horizontalised data convergence strategy to share data between public and private sector entities.

Implementation of existing policy strategy documents in consultation with the private sector such as:
1.
Innovation and Entrepreneurship Strategy of Sri Lanka 2018-22
2.
National IOT roadmap
3.
Proposed National Digital Economy Strategy with the thrust sectors of agriculture, tourism and manufacturing.

Implement digital ID system with the necessary data protection legislation in place to seamlessly connect with its citizens to offer services
such as banking, health and payment of taxes.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 69
Connecting
Sri LANKA THROUGH
Innovation and
Digitisation
70
| WORKING DRAFT
y
Implementing the Public Investment Committee (PIC) or an equivalent
high-powered committee to take over the role of selecting,
prioritising and creating a pipeline of infrastructure projects drawn
from varied line ministries based on economic and/or financial
feasibility.
y
The PIC should decide on mode of funding for project (e.g.
Consolidated fund, external resources/multilateral donor funding,
FDI/PPP and variants thereof)
y
Ensuring consistency and continuity of the priority project pipeline
is important to ensure the required economic and social objectives
are met.
INTERVENTIONS
Lead:
Mr Pravir Samarasinghe,
CEO, Overseas Realty Ceylon PLC
Members of the working
group:
Mr. Kamal Dorabawila,
Principal Investment Officer,
International Finance Corporation
Mr. Thilan Wijesinghe,
Chairman, National Agency for PPP,
Ministry of Finance
Mr. Christopher Joshua,
Managing Director,
Access Engineering PLC
Mr. Lakshman Jayasekara,
Project Director, Team Leader,
Western Region Megapolis Master
Plan Project
Mr. Rohan Tudawe,
Chairman,
Tudawe Brothers (Pvt) Ltd.
Infrastructure
working group
proposals
SECTOR: Infrastructure
1. Prioritisation of Infrastructure Projects
The lack of fiscal space owing to high debt repayment (82.9% of GDP)
has led to significantly low levels of Government capital expenditure on
Infrastructure.
2. Infrastructure Financing Policy
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 71
Draw up a robust project pipeline
through the Public Investment
Committee (PIC) or equivalent
institution.
PIC or the equivalent should have
the secretary to the Treasury acting
as the chairman of the committee;
as the planning, allocation and
management of public finances are
under its purview. The related line
ministries should also be represented
in this committee.
Broadly functions of a PIC or the
equivalent institution should include:
y
To evaluate projects with clearly
defined parameters based on
the merits of economic, financial
and social factors, so that there
will be a prioritised permanent
list of projects over a three - five
year horizon with their identified
funding mechanisms (public,
private and PPP).
y
To examine whether projects are
being managed in accordance
with sound business principles
and prudent commercial
practices throughout the projects
lifespan.
IMPLEMENTATIONS
Policies to attract private funding
should be encouraged and the
newly formed National Agency for
Public-Private Partnership (NAPPP)
should be facilitated with sufficient
authority and guidelines to implement
PPPs.
The NAPPP can play the role of
an intermediary who structures the
private public funding mechanism
and looks at the long-term agreement
with the parties concerned where
project quality and delivery targets
are established. The NAPPP can
also tap into a variety of innovative
sources of project financing.

In other countries PPPs have been
successfully executed in providing
physical infrastructure and non-
specialist services for education and
health.
72
| WORKING DRAFT
INTERVENTIONS
Infrastructure
working group proposals
SECTOR: Infrastructure
3. Funding mechanism for feasibility and
assessment studies
Enabling the procurement process to be competitive and transparent
without placing further pressure on fiscal consolidation.
4. Improving the procurement process
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 73
IMPLEMENTATIONS
Feasibility studies or viability
assessments should be done prior
to commencement of projects in
order to identify projects based on
economic impact, social impact and
financial viability. By doing this, it will
also identify the most appropriate
funding mechanism.
The costs of the study must be
commensurate with the costs of the
planned investment.
A long-term arrangement should
be in place, to fund and facilitate
viability assessments or feasibility
studies.

Identification of specific risks
associated with projects using
a technical framework. When
considering PPPs, risk allocation
must be carried out via a formal
mechanism provisioning optimum
levels of risk to both private and
public sector. If appropriate risks are
not addressed in the formulation
stage projects would end up being
costly for society.
Fast-Tracking the PPP procurement
guidelines which is currently under
review by the National Procurement
Commission.
Fine-tuning the general procurement
guidelines and ensuring all ministries
follow these guidelines when
procuring without giving rise to
prolonged delays.
Reduce time committed to obtaining
multiple ministry and stakeholder
approval and need to manage
logistical and practical issues in
convening and decision making
in procurement committees; and
strengthen technical capability within
procurement committees to evaluate
large-scale projects.
74
| WORKING DRAFT
Infrastructure
working group proposals
SECTOR: Infrastructure
Public Investment
Lack of fiscal space in Sri Lanka acts as a bottleneck in getting the required infrastructure for the country. This calls for the private sector
involvement in facilitating these investments. Therefore, funding mechanisms (private funding, public funding and PPP) were classified under each
sector, to identify which sectors can go under the different funding mechanisms.
Sector
Private Funding
Public Funding
PPP
Roads and Highways


Railway



Aviation


Ports and Shipping



Housing and Urban Development / Regeneration



Waste Management



Communication Services


Power and Energy



Water



Physical Infrastructure in Education and Health



Sewage


SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 75
PUBLIC
INVESTMENT
y Roads and Highways
y Railway
y Aviation
y Ports and Shipping
y Housing and Urban Development / Regeneration
y Waste Management
y Communication Services
y Power and Energy
y Water
y Physical Infrastructure in Education and Health
y Sewage
76
| WORKING DRAFT
INTERVENTIONS
y
Reduce the negative impact on the banks’ liquidity, credit risk
and administrative difficulties in lending to the priority sectors and
encourage the banks to lend to the priority sectors.
y Currently, interest subsidy schemes and other sector reforms are
implemented by multiple government authorities and banks are
eligible to receive interest subsidy for the loans granted by them
through a relevant interest subsidy scheme. Dealing with multiple
government authorities with different operating procedures and
objectives increase the operational complexities for banks.
y
The interest subsidy is provided only for the preforming facilities and
in the event of default, the banks are required to absorb the total
credit risk.
y
These interest subsidy schemes are implemented to compensate the
cost of funds of banks while encouraging them to grant loans to the
specific priority sectors of the economy. However, unusual delays in
receiving the interest subsidy increases the operating cost of the
banks and discourage banks to participate in such schemes.
y
The banks are required to classify lending to Government sponsored
projects due to delay in payments by the Governments, discouraging
banks from lending to Government sponsored projects and priority
sectors.
1. Lending to priority sectors
Financial Sector and
Capital markets working
group proposals
SECTOR: Banking
Lead:
Mr Ravi Abeysuriya,
Group CEO, Candor Equities Ltd.
Overall:
Mr. Krishan Balendra,
Chairman,
John Keells Holdings PLC
Ms. Ayomi Aluwihare,
Partner,
F J & G de Saram
Ms. Ruvini Fernando,
Director, PPP and Deal Strategy,
PricewaterhouseCoopers
Members of the Banking
Group :
Mr. Dimantha Seneviratne,
CEO,
National Development Bank PLC
Mr. Rajive Dissanayake,
Chief Strategy Officer,
Hatton National Bank PLC
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 77
IMPLEMENTATIONS

Introduce a new framework for
all interest subsidy schemes and
other sector reforms to minimise
the operational complexities of
dealing with multiple authorities
and delay in recovering the interest
subsidies. To achieve this objective,
all interest subsidy schemes should
be coordinated, facilitated and
implemented through CBSL..

Implement credit guarantee schemes
with a view to mitigate credit risk of
the loans granted by the banks for
specific sectors under theses schemes.
Possible relaxations to the NPA
classification requirements for the
loans granted to Government
sponsored projects.
78
| WORKING DRAFT
INTERVENTIONS
Financial Sector and Capital
markets working group proposals
SECTOR: Banking
y
Reduce the high cost of bank intermediation by addressing the
delays in the legal system and introducing the required bankruptcy
laws.
y
Facilitate evolution of the financial services industry based on
regional/global trends by passing requisite legislation
y
Recovery and arbitration proceedings tend to be very time
consuming, expensive and protracted with delays.
y
The most significant impediment seems to be the willingness of judges
to grant postponements on basis of ‘personal reasons’ of lawyers
representing litigants. This delays proceedings with commercial loss
to parties and great disrepute to all concerned.
y
Bring inclusive economic growth, regional development, employment
generation and poverty reduction through increasing the lending to
SME sector.
y
Lack of information infrastructure for SMEs
y Non-availability of a deep SWAP market to hedge the currency risk
of foreign borrowing for SME lending.
y
Higher risk premium in loan formulations due to lack of collaterals.
2. Financial laws
3. Development of the SME sector
Mr. Stuart Rodgers,
Country Head of Commercial Banking,
HSBC
Mr. Lakshman Silva,
CEO,
DFCC Bank PLC
Mr. Ravi de Silva,
Secretary General,
Sri Lanka Banks’ Association
Members of the Capital
Markets Group:
Mr. Mafaz Ishaq,
Director,
Calamander Capital
Mr. Nishantha Hewavithana,
Head - Research & New Products,
Colombo Stock Exchange
Mr. Nissanka Weerasekara,
Independent Private Equity Investment
Advisor
Mr. Senaka Kakiriwaragodage,
Managing Director,
NDB Zephyr Partners Lanka (Pvt) Ltd.
Mr. Ruwan Perera,
President,
The Unit Trust Association of Sri Lanka
Mr. Prashan Fernando,
President,
Colombo Stock Brokers Association
Mr. Maninda Wickramasinghe,
Country Head,
Fitch Ratings Lanka
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 79
IMPLEMENTATIONS
Re-examine the recovery laws
and enactment of legal reforms for
efficient implementation of recovery
laws such as
1.
Courts to complete commercial
cases within set time limits.
2.
Expedite resolving of commercial
disputes through a smoother
and more effective arbitration
process
3.
Introduce a mechanism for
speedily restructuring of
companies facing financial
difficulties and strengthen
debt-recovery laws by plugging
the loopholes that allow the
defaulters to obtain restraining
orders from courts and drag
the commercial cases for long
periods.
4.
Enact the required bankruptcy
laws
5.
Establishment of special
bankruptcy / debt recovery
courts which handle only debtor-
creditor cases
6.
Convergence of CBSL
provisioning calculations with
IFRS requirements to avoid
administrative complexities.
Appoint an official receiver whose
office should be strengthened
by adequate resources and
independence to operate to
expeditiously contain the decline
of a company in trouble and to
rehabilitate them where possible.
Take initiatives to broaden the SWAP
market through SWAP arrangements
with CBSL for borrowing made by
banks for SME lending.
Permit the development of a long-
term inter bank SWAP market by
removing the existing regulatory
barriers.
Expedite of the project on
providing borrower rating from
CRIB and extending obtaining
credit information relating to utility
companies
80
| WORKING DRAFT
INTERVENTIONS
SECTOR: Banking
y Credit growth the banking sector is highly impacted by the following.
1.
Implementation of BASEL III, which requires a substantial
increase in capital base
2. Adoption of IFRS 9, likely to impair the capital base of the
banks
3. A substantial portion of profits of a bank will be netted by the
state by way of taxes which will significantly affect the banks
ability to lend
4. Difficulties in attracting capital due to low performance in the
capital market to meet the new capital requirements
5. Difficulties in raising funds due to low investor confidence due to
excessive taxes on the industry, highly volatile tax policies such
as retrospective taxes (Super Gains Tax, introduction of new tax
treatments for existing investment securities).
4. Slow down of economic growth due to reduction in
credit supply
Financial Sector and Capital
markets working group proposals
Members of the Non-bank
& Financial Institutions
Markets Group:
Mr. Roshan Abeygoonewardena,
Chairman, The Finance Houses
Association of Sri Lanka
Mr. Krishan Thilakarathne,
Immediate Past Chairman,
The Finance Houses Association of
Sri Lanka
Mr. Romani de Silva,
Member, The Finance Houses
Association of Sri Lanka
Mr. Brandon Morris,
Member, The Finance Houses
Association of Sri Lanka
Mr. Rohan Tennakoon,
Member, The Finance Houses
Association of Sri Lanka
Mr. Ravi Yatawara,
Member, The Finance Houses
Association of Sri Lanka
Mr. Chaminda Hettiarachchi,
Member, The Finance Houses
Association of Sri Lanka
Mr. Ravi Tissera,
Member, The Finance Houses
Association of Sri Lanka
Mr Denzil Mallawa Arachchi,
Head of Secretariat, The Finance
Houses Association of Sri Lanka
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 81
IMPLEMENTATIONS
Possible relaxation or deferment of
new capital requirements such as
counter cyclical buffer.
Consistent policy framework on banks
taxation and a long-term view in
application of banks taxes and
tax rates.
Possible relaxations to the existing
banking tax structure (eg. Debt
Repayment Levy).
Avoidance of retrospective taxation.
82
| WORKING DRAFT
INTERVENTIONS
SECTOR: Banking
y
Enhance the guidelines governing banking operations to strengthen
the banking sector.
y
Bring long-term productivity and efficiency through reduction in
cost, efficiency gains, economy of scale, enhancement of consumer
base and innovations.
y Non availability of clear policy framework on voluntary
consolidation to motivate the banks on voluntary mergers
addressing on issues such as branch closers, implication of
consolidation on employment, tax treatment, etc.
y
Introductions of new technology will be important as cost to income
(C/I) to be a critical factor in the future in improving the profitability
of banks.
y
Slow adoptability of the regulator for the new technology and
difficulties in obtaining approvals.
y
High costs on technology due to non availability of cloud computing
y Non-availability of common data centres.
5. Sector consolidation and re-capitalisation
6. Technology
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 83
IMPLEMENTATIONS

Introduce a policy framework that motivates the voluntary consolidation within the banking sector addressing requirements such as
ownership control and degree of foreign ownership allowed, capital requirements and capital treatments, asset liability transfers,
tax benefits and tax treatments, asset liability transfers, etc.
CBSL to facilitate e-KYC through Face-Recognition Apps to facilitate e-banking
Establish a policy framework on cloud computing, common data centres, digitalisation and fin-tech
84
| WORKING DRAFT
INTERVENTIONS
1. Enable the provision and regulation of demutualised
exchanges
2. Enact Securitisation Act
3. Establish a Central Counterparty Clearing House
(CCP) system
4. Steps to increase market size in the capital market
Financial Sector and
Capital markets working
group proposals
SECTOR: Capital Markets
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 85
IMPLEMENTATIONS
The SEC Act has to be amended
to include provisions enabling
demutualisation.
A Demutualisation Act has to be
enacted.
Provisions for civil sanctions against
securities law violations,
Licensing and regulation of
derivative and commodities
exchanges,

Incorporating legal duties on
auditors in respect of capital market
offences,
Enhancing of measures for investor
protection.
Provide a comprehensive legal and regulatory foundation for securitisations in Sri Lanka.
Essential that the infrastructure for
such a system is in place.
To ensure the continuity of a CCP
system, the SEC should take the role
of being the primary regulator and
enforcer.
Listing State-Owned Enterprises which
would result in better governance
and its recognition to the market,
thus expanding the potential of the
equity market.
Listing of minority stakes of key
commercial public enterprises.
Dollar board: Establish a dollar
board for listing of foreign and
domestic companies.
86
| WORKING DRAFT
INTERVENTIONS
SECTOR: Capital Markets
5. Steps to increase market liquidity
6. Increase transparency and liquidity in Government
securities
8. Development of Real Estate Investment Trusts
7. Increase transparency and liquidity in the Corporate
Debt market
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 87
IMPLEMENTATIONS
Continue to enforce a higher free
float percentage.
Establish a market making mechanism
to ensure a continuously liquid market
for listed stocks.

Implementing “market makers” to
promote liquidity in the market
Reforming the transaction cost
structure with the objective of
lowering them to an appropriate
level.

Implement a brokerage industry
consolidation plan where market
intermediaries deal in all capital
market products.
Sri Lanka needs to introduce minimum
capital requirements for market
intermediaries in the CSE.
Developing a reliable benchmark
yield curve across the entire term
structure.
Practices such as private placements,
partial filling of offered amounts,
outright cancellation or rejection of
announced auctions, etc. must be
limited to exceptional circumstances.
A more transparent and efficient
trading platform for Government
securities must be established.
Ensure that it receives support
from local regulatory bodies and
authorities in formulating a legislative
framework for its operations.
Fast track the implementation of
Collective Investments Scheme (CIS)
code. Alternatively, enable REITs under
the Unit Trust code as a first step until
the CIS code is implemented.
A stable tax regime must be kept in
place to instill confidence in investors
and enabling them to be tax neutral.

Increasing the size of the listed
corporate bond market is vital by
increasing the institutional investor
participation.

Introducing a formal market making
mechanism.
A central counterparty clearing
and settlement system is an
essential component to mitigate
settlement risks and promote investor
confidence.

Introducing repurchase agreements
(repos) on corporate debt securities.

Introducing bond derivatives will also
contribute to the development of the
market.
88
| WORKING DRAFT
INTERVENTIONS
SECTOR: Capital Markets
9. Establish derivative market

(A derivative is a financial contract with a value that
is derived from an underlying asset)
11. Broaden pension fund portfolio
12. Increase awareness of unit trusts
10. Introduce commodity derivatives
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 89
IMPLEMENTATIONS
Regulations for introducing
derivatives products needs to be
developed.
Trading, clearing and settlement
technology and mechanisms need to
be developed.
Sri Lanka needs to undertake a
comprehensive assessment and
prepare a realistic road map for
developing derivatives products and
markets.
The SEC and CSE should also link
the initiatives for increasing the size
and liquidly of the stock market to the
development of derivatives.
The CBSL, SEC and CSE should
explore the potential for introducing
derivatives on Government securities.
Pension funds should consider
creating more broadly diversified
portfolios.
Pension funds should consider
strengthening the capacity for in-
house fund management.
Pension industry should consider
incorporating external fund
management into their portfolio, by
doing so, the public have a choice
as to invest in the internally-managed
EPF and ETF or a privately-managed
pension fund.
Setting up of a separate “Pensions
Office” or regulator to formulate
and monitor the framework required
to enable private participation in
pension fund management.
The unit trust industry needs a
comprehensive plan for educating the
public about benefits of unit trusts.
Pension reforms needs to include
external fund management of
pension funds.
The unit trust industry will need
consolidation.
Review the existing taxation framework
for unit trusts and make appropriate
changes for the operation of and
investing in unit trusts.
A SEC-mandated robust licensing
framework for professionals in that
industry.
Assess the economic and practical
feasibility of setting up commodities
trading. This might involve leveraging
on the existing capacities of the CSE
to commodities trading.
The development of trading, clearing
and settlement structure.
The SEC should consider the
need for a separate commodities
legislation.
90
| WORKING DRAFT
INTERVENTIONS
y An apex committee should be set up and tasked with policy
development and include key stakeholders and key decision makers.
y
There needs to be regular (preferably monthly) forums where
the committee meets to discuss policy direction and latest
developments.
y
Regulator looks from a regulatory perspective and not from a
development approach. As such there is a conflict of interest for a
regulator as they can formulate policy to make regulation easy at
the cost of economic development.
y Government and regulatory policies on limiting the risk taking
abilities of the industry will negatively affect on credit granted
to risky sectors and will simulate lending for such sectors through
unregulated institutions.
y
There should be consistency in policies set out for the sector.
1. Policy development
2. Decoupling the regulator and policy developer
Financial Sector and
Capital markets working
group proposals
SECTOR: Non-bank & Financial Institutions
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 91
IMPLEMENTATIONS

Industry bodies should be
represented in the committee in order
to obtain their insights and address
any concerns.
Representatives from departments
important to the NBFI sector such as
Land Registration, RMV, legal system
representatives should be members
of the committee.
Ministry for Economic Development
should drive the formulation of
policies for the ultimate growth
and development of the country
and, should not be influenced by
regulatory constraints.

Institutions should be allowed to take
on risk and manage it.
Minimise inconsistencies between
economic policies and regulatory
guidelines.
92
| WORKING DRAFT
INTERVENTIONS
SECTOR: Non-bank & Financial Institutions
y Maximum interest rate on deposits. As per the new direction the
interest differential between NBFI and banks have reduce to 0.50%
to 1.50%. Low interest differential has resulted liquidity strain to most
of the NBFIs as the deposits are been shifted to banks as the interest
premium is less considering the credit rating of each company.
Accordingly, the credit flow to the SME sector could be limited.
y NBFIs are catering to a risky segment and the repayment behaviour of
such customers are different to banking customers (significant potion
of recoveries are made after 90 days). The proposed regulation on
NPA classification of 90 days will affect adversely on granting loans
to risky sectors such as SMEs as significant amount of current customers
may have to be arbitrary classified be classified as NPAs.
y
Lack of Information Infrastructure for SMEs
y
Higher risk premium in loan formulations due to lack of collaterals.
y
Reduce the high cost of NBFIs intermediation by addressing the
delays in the legal system and introducing the required changes to
the recovery laws.
y
Facilitate evolution of the financial services industry based on
regional/global trends by passing requisite legislation.
y
Recovery and arbitration proceedings tend to be very time
consuming, expensive and protracted with delays.
3. Development of the SME sector
4. Financial Laws
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 93
IMPLEMENTATIONS
Facilitate a market-based deposit
rates based on the credit ratings of
the respective entities or widen the
spread in deposit rates between
banks and NBFIs.
Delay the implementation of the
NPA 90-day classification. This is
to be done on a staggered basis
over a four-year period and up to a
minimum of 120 days considering the
sector specific operational model.
Re-examine the recovery laws and
enactment of legal reforms for efficient
implementation of recovery laws
such as
1.
The laws to be introduced with respect
to private money lenders and with
respect to exorbitant lending rates
and unethical collection practices.
2.
Mortgage of leased vehicles to third
parties: make it a criminal offence under
a new provision to be introduced to
the Finance Leasing Act, on par with
section 15 and 19 of the Consumer
Credit Act 29 of 1982
3.
Mediation board activities to be
streamlined in a manner which would
help the recovery activities to be
more efficient and effective. The
mediation board should compromise
more financially competent members.
4.
Parate execution to be introduced
to NBFI mainly focusing on property
mortgages.
94
| WORKING DRAFT
INTERVENTIONS
SECTOR: Non-bank & Financial Institutions
Credit growth in the financial sector is highly impacted by the following.
1.
Implementation of BASEL III, which requires a substantial increase in
capital base
2. Adoption of IFRS 9, likely to impair the capital base of the NBFIs
3. A substantial portion of profits of NBFIs will be netted by the State by
way of taxes which will significantly affect NBFI ability to lend
4. Difficulties in attracting capital due to low performance in the
capital market to meet the new capital requirements
5. Difficulties in raising funds due to low investor confidence due to
excessive taxes on the industry, highly volatile tax policies such as
retrospective taxes, higher NPAs.
y
Enhance the guidelines governing NBFIs operations to strengthen
the sector.
y
Bring long-term productivity and efficiency through reduction in
cost, efficiency gains, economy of scale, enhancement of consumer
base and innovations.
y Non-availability of a clear policy framework for the financial sector
as commercial banking, development banking, leasing and finance,
micro finance, etc.
5. Slow down of economic growth due to reduction in
credit supply
6. Sector consolidation and re capitalisation
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 95
IMPLEMENTATIONS
Possible relaxation or deferment of
new capital requirements.
Consistent policy framework on
taxation and a long-term view in
application of taxes and tax rates.
Possible relaxations to the existing tax
structure (eg. Debt Repayment Levy).
Policy framework with clear
demarcation of the sector as
commercial banking, development
banking, leasing and finance, micro
finance and re-focus on venture
capital business.
Restrict issuing any further licenses for
banks or any financial institutions.

Introduction of a policy framework
that motivates voluntary
consolidation within the NBFI sector
addressing requirements such as
ownership control and degree of
foreign ownership allowed, capital
requirements and capital treatments,
asset liability transfers, tax benefits
and tax treatments, and asset liability
transfers.

Introduction of new regulations in
relation to risk management and
governance of the sector.
96
| WORKING DRAFT
INTERVENTIONS
SECTOR: Non-bank & Financial Institutions
y
Introductions of new technology will be important as cost to income
(C/I) will be a critical factor in the future in improving the profitability
of NBFIs.
y
Slow adoptability of the regulator of new technology and difficulties
in obtaining approvals.
y
High costs of technology due to non-availability of cloud computing
y Non-availability of common data centres.
7. Technology
Financial Sector and Capital
markets working group proposals
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 97
IMPLEMENTATIONS
CBSL to facilitate e-KYC through
face-recognition apps to facilitate
e-banking.
Establish a policy framework on cloud
computing, common data centres,
digitalisation and fin tech.
Eliminate the requirement for NBFIs to
have a sponsoring bank in order to
obtain clearance for issuing products
like credit cards, etc. to avoid
unnecessary bottlenecks and costs.
98
| WORKING DRAFT
1. Overall policy consistency for manufacturing
3. Implementation issues of laws governing business
operations due to corruption
2. Amalgamation and modernisation of Industrial
Parks and Export Processing Zones (IP&EZs) for
the Sri Lankan economy to progress and move into
technologically-advanced, higher value-added
industries.
INTERVENTIONS
Lead:
Mr. Roy Joseph,
CEO, Hemas Manufacturing (Pvt) Ltd.
Members of the working
group:
Mr. Nalin B. Karunaratne,
Chief Executive Officer,
Ceylon Biscuits Ltd.
Mr. Sumit Law,
CEO,
International Distillers Ltd.
Mr. Sanjev Perera,
Director Operations,
Alpha Industries (Pvt) Ltd.
Mr. Nilantha Deetiratne,
Financial Controller,
Polypak Secco Ltd.
Mr. Salman Nishtar,
Chief Financial Officer,
Teejay Lanka PLC
Manufacturing
working group
proposals
SECTOR: Manufacturing
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 99
Formulate a clear national vision/
strategy for manufacturing to
encourage investment into the sector
(domestic and foreign).
Coordination/alignments between
respective line ministries and
departments (trade, finance,
education and more).
Set up a high-level committee
comprising of private and public
sector stakeholders to drive the
strategy for manufacturing.
y
Ensuring periodic review on the
progress against stated action
plans.

Improve Sri Lanka’s rank to be in
the top 50 by 2025 in the following
indicators;
y
Incidence of corruption by World
Economic Forum
y Corruption Perception Index by
Transparency International
Establish a business corruption
reporting action unit.
Set up designated zones for
manufacturing to address;
y
Lack of industrial land
y Upgraded with modern
infrastructure and necessary
infrastructure to ensure availability
of employable labour
y
Supported with sustainable
environmental policies
y Other ancillary facilities such
as proper waste and emission
management, water treatment
facilities to attract investors and
ease the business operations
Bring existing Industrial Parks
and Export Processing Zones,
presently managed by different
Government agencies under one
entity for prudent management and
dissemination of information to the
investor community.
Develop a PPP approach to
developing and managing the
industrial zones.
IMPLEMENTATIONS
100
| WORKING DRAFT
INTERVENTIONS
Manufacturing
working group proposals
SECTOR: Manufacturing
Mr. D. S. J. V. Costa,
Director / CEO,
Modern Pack (Pvt) Ltd.
Mr. Kelum Kospelewatte,
Director,
Singer Industries Ceylon PLC
Mr. Viville Perera,
Director,
Richard Pieris & Co PLC
Mr. Thusith Gunawarnasuriya,
Procurement and Logistics Director,
Siam City Cement (Lanka) Ltd.
Mr. Lasantha Wijeweera,
Director,
Associated Motorways (Pvt) Ltd.
Mr. Tyrell Roche,
General Manager-Finance,
Lanka Tiles PLC
4. Re-looking at irrational tax structures in manufacturing
sectors with competitive advantage.
6. Supporting services and extension services for
domestically-manufactured products and imported
products.
5. Attracting and retaining skilled labour (reversing
brain drain)
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 101
IMPLEMENTATIONS
Remove unfavourable tax/duty
structure for manufacture such as:
y Double taxation due to dividend
tax
y
Rationalise the product inputs
that are subject to para tariffs
while finished goods are imported
duty free
y
High taxes on machinery and
other equipment used in the
manufacturing process
Addressing policy gaps/updating
policy impacting manufacturing.
Enforcing/updating (in line with
international standards) of existing
quality standards for domestic
manufactures and importers.
Create new standards (in line with
international standards) for products
that are not governed by standards.
Provide up to date equipment to
Government for inspection and
certifying purposes.
Maintain directory of skilled
categories/for specialised skill/profile.
Reorienting existing technical
colleges and setting up technical
colleges to cater to required industry
skills.
Updating all labour related laws
impacting decision to invest in the
manufacturing sector.
Drive agenda for STEAM and English,
in order to be relevant in the global
industry.
102
| WORKING DRAFT
INTERVENTIONS
Agriculture
Working Group
PROPOSALS
SECTOR: Agriculture
y National Agriculture Policy to focus on promoting self sufficiency of the six
main crops – paddy, maize, mung bean, chili, onion and potato.
y
Updating regulations and acts such as the Seed Act, Land Reform Act and
Paddy Land Act
y
Introduction of a Plant Varieties Protection Act in order to encourage the
import of different varieties of plant material required by industries.
y
Implementation of quality standards as minimum requisites (GAP) to bolster
sustainable practices and food safety.
y
Focusing on export fruit crops in order to improve Sri Lanka’s image as an
exotic fruit exporter.
y
Reformation of transportation and storage for agricultural produce to
minimise post harvest losses through the use of reusable crates, knowledge
sharing and the use of cold chains.
y
Implementation of a Land Use Plan and Land Data Bank with details and
specifications of the specific areas.
y
Investment in quarantine services to conduct pest risk analysis which would aid
imports and exports
y
Branding and marketing programmes and exhibitions to better position the
country’s exports in the international arena.
y
Awareness and education programmes for exporters to focus more on value
added exports instead of raw produce exports (canning, drying, organic
production, etc.)
y
Establishing water management and irrigation in dry zone regions in the country.
PUBLIC INVESTMENT (PROJECTS & ACTIVITIES REQUIRED)
Lead:
Mr. Rizvi Zaheed
Director, Vidullanka PLC
Members of the working
Group:
Prof. Buddhi Marambe,
Director, Agriculture Education Unit at
the University of Peradeniya
Mrs. Dawn Austin,
Managing Director, Nidro Supply
(Pvt) Ltd
Mr. Bandula Egodage,
VP-Corporate Affairs &
Communications, Nestlé Lanka PLC
Dr. A. Shakthevale,
Director, Lanka Dairies (Pvt) Ltd.
Mr. Chithral Munaweera,
Consultant, The All Island Dairy
Association
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 103
IMPLEMENTATIONS
Conduct education programmes
and seminars to increase
awareness of technology adoption,
fertiliser application, crop variety
development and crop rotation.
Establish farmer companies/
organisations/cooperatives to
bolster economies of scale, crop
variety development and improve
knowledge sharing.

Improve awareness of agriculture
and primary industry sector among
the youth to increase participation in
the industry.
Facilitate use of railway for long
distance logistics and the use of
plastic/corrugated crates.
Consolidate Ministry of Agriculture
functions and departments for ease
of policy roll out and ownership.
Project on creating more parent
stock, improving access to parent
stock of export fruits as well as
granting approval to import high
quality parent stock. (Note 06)
Develop the use of sea freight for
transporting identified agricultural
produce in order to reduce risk of
pests.
Key Performance Indicators
Expectations for 2025
Improvement in yield of the six major crops
26% on average for each crop
Improvement in the yield of export fruit crops
50% on average
Agricultural sector as a percentage of exports (non plantation/non value added produce)
ICT tool usage rate - active farmer users using applications. (proven successful in the fisheries industry)
50% of registered farmers
Percentage of agricultural produce transported via railway
10%
Percentage of companies compliant with Good Agricultural Practices [GAP]
50-60%

104
| WORKING DRAFT
INTERVENTIONS
Agriculture Working
Group PROPOSALS
SECTOR: Fisheries
PUBLIC INVESTMENT (PROJECTS & ACTIVITIES REQUIRED)
y
Formulating a National Fisheries and Seafood Strategy, export plan and a
roadmap that the Ministry of Policy Planning, Ministry of Fisheries, BOI and
EDB have to undertake. Regulation and quality control mechanisms as well
as the adoption of Best Aquatic and Fisheries Practices (BAP) for fisheries.
y
Re-examine the Food Act/Fisheries Act and make necessary amendments to
liberalise Sri Lankan seafood export industry.
y
Explore the possibilities for trade and agreements with countries such as
USA, Japan and the EU to improve ease of access to markets.
y
Initiate fisheries agreements with neighbouring countries such as Seychelles,
Mauritius, Maldives etc. for Sri Lanka to export directly as opposed to
returning to Sri Lanka (Note 04).
y
Removal of Government enterprise control and dependency of export-
oriented businesses.
y
Provision of incentives for new projects such as marine aquaculture and
aquaculture farming.
y
Introducing new technology to the fishing industry to improve the efficiency of
fishing operations.
y Minimising post harvest losses that are at a significant level due to improper
transportation and storage.
y
Industry-controlled Research & Development unit including hatcheries to
improve knowledge-base.
y
Recognition and empowerment of fisheries and seafood industrial organisations
to operate on par with EU and other international bodies.
Colonel Channa Weeratunga,
Executive Director, Global Fisheries
(Pvt) Ltd.
Mr. Irfan Thassim,
Founder/Director, Oceanpick (Pvt) Ltd.
All-Island Dairy Association
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 105
IMPLEMENTATIONS
Mechanise available small long line
vessels fishing in the EEZ.
y Upgrading a selected number
(100-200) vessels with a winch
and long line would enable
boats to return sooner after
fishing with a larger volume of
export quality fish.

Introducing collection vessels, on-
board frozen fishing vessels as well as
equipping the larger boats (40-55ft)
with Refrigerated Sea Water (RSW)
facilities.
Establishment of an advisory
committee with the participation of
the Seafood Exporters Association of
Sri Lanka.
y
This would enable members
actively involved in seafood
exports to contribute towards the
development of the industry.
Usage of cold storage facilities as
well as the use of rail transport as
a faster method of delivering fresh
produce.
Key Performance Indicators
2019
2025
Percentage of companies and fisheries compliant with best aquatic and fisheries practices
-
75%
Number of small long-line vessels upgraded with a winch and long-line
25
100
Post harvest loss - % of produce lost per annum
40%
<10%
Volume of fisheries-related produce transported via railway (%)
10%
50%
Increasing the proportion of inland and aquaculture fish production as a percentage of total fish
production:
y
Inland and aquaculture
y Wild capture fisheries
-
30/70
106
| WORKING DRAFT
INTERVENTIONS
Agriculture Working
Group PROPOSALS
SECTOR: Dairy
PUBLIC INVESTMENT (PROJECTS & ACTIVITIES REQUIRED)
y
A comprehensive plan encompassing the needs of farmers, producers as
well as the consumers of dairy products should be implemented in the
long run.
y
Re-look at the income tax structure to encompass all aspects of the value
chain in dairy under the concessionary tax rate of 14%. Taxes on dairy
related equipment to be re-looked at from the perspective of promoting
the goal of making Sri Lanka self-sufficient in milk requirements. The Livestock
Board and Customs to be linked to improve the importation and taxation
process.
y
Providing education and awareness for dairy farmers regarding procedures
as processes in the dairy industry.
y
Implementing a systematic plan and policy for optimising cattle herds and
minimising the number of unproductive animals.
y
Allotting crown lands / NLDB lands for fodder development and investment in
a silage making facility to overcome the unavailability of fodder throughout
the year.
y Carrying out a complete review on the importation of cow breeds (existing
infrastructure, compatibility of health control) and permitting selection by
experts. Encourage local breeding than importing breeds unsuited for local
climate.
y
Animal breeding - the current coverage of artificial insemination satisfies ~30%
of the national requirement. Current AI success rates are unsatisfactory due to
poor animal management and lack of resources and facilities. Thus, there needs
to be an improvement and an increase in Government veterinary services in
this regard.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 107
IMPLEMENTATIONS
Projects aimed at processing milk at
regional level to provide access to
value added dairy products.
Providing access to nutritious feed
that is rich in proteins. This would have
a direct impact on the yield.
Ensure consistent water access /
supply is available to dairy farms or
assist farmer to have access to water
in a concessional manner to provide
a proper water supply for farms.

Implementing a second round (night)
milk collection which would be
possible if the right feeding is done
as it would result in a 30% increase in
yield.

Increasing the number of artificial
inseminators trained to overcome
shortage of qualified personnel
required to meet the national
requirement.

Investment in facilities for cow
comforts (nutrition, environment and
shed management) and waste
management (to convert waste
potentially into renewable energy).
Key Performance Indicators
2019
2025
Use of artificial insemination in breeding as a percentage of total breeding requirement
30%
60%
Accessibility of water - Litres of drinking water provided daily per cow (on average)
50-60 L
Daily milk yield per cow (national average)
2 litres
3-4 litres
Number of cows being milked as a percentage of the total milk cow population (cattle)
52%
75%
Number of cows being milked as a percentage of the total milk cow population (buffaloes)
62%
80%
108
| WORKING DRAFT
SECTORS
Plantation
working group
proposals
SECTOR: Plantation
Lead:
Dr. Roshan Rajadurai,
Managing Director, Kelani Valley
Plantations PLC
Members of the working
Group:
Mr. Sunil Poholiyadda,
Chairman, The Planters’ Association of
Ceylon
Mr. S K L Obeyesekere,
Secretary General, The Planters’
Association of Ceylon
Mr. Harith Ranasinghe,
Chairman, Sri Lanka Tea Factory
Owners’ Association
Mr. Lionel Herath,
Branch Chairman, Kandy Region,
Sri Lanka Tea Factory Owners’
Association
Mr. Paani Dias,
Managing Director, Ceciliyan
Associates Ltd.
Tea
Rubber
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 109
INTERVENTIONS
Establish commercial scale mega
nurseries with certified and approved
planting materials supported by a
financial mechanism for replanting in
the smallholder sector.
Grant concessionary loans for
replanting and capital development
in the RPC sector.
Development of a sustainable
wage model with all stakeholder
involvement.
Establish new “land banks” and
introduce a land use policy for
plantation land and set up modern
up-to-date analytical laboratory
facilities for product testing.
Amend outdated quarantine laws to
encourage inclusion of genetically
modified plantation materials.
Extend the tax concessions given to
other export industries to plantation
industries as well (indirect exporters
status).
Develop a platform for auction of
high value added tea.
Finalise the leasehold tenure of RPCs
to support new investments and
developments.
Compliance by the State to the
covenants of the lease / sale
agreements in respect of land use
and diversification.
Form a regulatory body to monitor
tea factory capacities and monitor
the pricing formula.
Enter into new project ventures
such as:
y
Fuel wood plantations (Dendro)
and diversification to other
plantation crops
y
Housing schemes in plantations
near urban centres
y Development of tourism in
plantation regions through
establishment of tourist villages
and care centres
y Collaborative ventures for large
scale vegetable, flower and
foliage cultivation
y
Solar power farms on plantation
land
y Automation and development of
robotics

Implementation of Plan of Actions
(POAs) recommended in the Rubber
Master Plan (RMP) such as;
y
Expansion of national rubber
production in large parcels of
land from non traditional areas
y
Productivity enhancement in
rubber plantations
y Developing sustainable farming
Systems
y
Enhancement of resource use
efficiency and productivity in
rubber manufacturing industry
y
Strategic promotion of Sri Lankan
rubber products
y
Industry-wide technological
capability development
y
Institutional strengthening and
capacity building
110
| WORKING DRAFT
SECTORS
Plantation working
group proposals
SECTOR: Plantation
Palm Oil
Mr. K. L. Gunarathne,
Chairman, Sri Lanka Federation of Tea
Small Holdings Development Society
Mr. Sriyan Eriyagama,
Chief Executive Officer, Namunukula/
Kegalle Plantations PLC
Mr. Saman Doranegama,
General Manager,
Kegalle Plantations PLC
Dr. L. M. K. Tillekeratne,
Former Executive Director, Rubber
Research Institute of Sri Lanka
Mr. Viren Ruberu,
Former CEO,
Kahawatte Plantations PLC
Mr. Kamal Punchihewa,
Group CEO, Browns Plantations/
Browns Capital PLC
Mr. Mahasen Wijayaratne,
Manager HR & Administration,
Kotagala Plantations PLC
Mr. Binesh Pananwala,
Chief Executive Officer,
Watawala Plantations PLC
Mr. Thanveer Siddique,
Chief Operating Officer,
Pyramid Wilmar (Pvt) Ltd.
Coconut
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 111
INTERVENTIONS
Formulate a national policy guided
KPIs to promote a sustainable palm
Oil industry in Sri Lanka. Key areas for
consideration include;
y
Facilitating cultivation of up to
20,000 hectares of land within
RPCs as approved by the
Government
y
Incentivising palm oil cultivation in
the smallholder sector
y
Providing a sound regulatory
framework
y
Recognising palm oil as sixth
plantation crop
y
Facilitating research and
development in palm oil with
targeted commercial output
- export of oil palm planting
material; seed and tissue culture
Formulate a national policy with KPIs to
promote a sustainable coconut industry
in Sri Lanka. Key areas for consideration
include;
Providing a sound regulatory
framework:
y
To implement a price formula
for coconuts supplied for
manufacturing and exports.
y
To monitor and control
unrestricted importation of edible
and industrial oil.
y
To control malpractice such
as mixing of pure coconut oil
with any other edible oil and
marketing under fraudulent
labelling.
y
Vigilant supervision of all
production facilities and exports
to ensure strict hygienic and high-
quality standards.
y
To implement Coconut
Development Authority (CDA)
certification for bottled,
packeted and sealed pure virgin
coconut oil with SLS Standard
and ban loose sales of all edible
oils.
y
To encourage sellers and buyers
of coconut to channel all their
transactions via the weekly
auction of coconuts.
To address issues related to
fragmentation of productive coconut
lands and low production and
productivity of coconut lands
Encourage public-private sector
collaboration in research and
development and promotion:
y
For commercial application such
as value-added exports
y Adopt new technology to assure
consistent quality production and
to overcome resource limitations
y
Promote health benefits of
coconut and coconut based
products on health
y
Promote Sri Lanka’s access to
global markets
112
| WORKING DRAFT
INTERVENTIONS
Retail working
group proposals
SECTOR: Retail
Objective:
y
To build a hub it is essential that we bring policies that will attract
tourist to visit and be part of the immersive retail experience. Whilst
tourism sector related enticements are key, unless retail is allowed
to rise up to these levels, the maximum spend by a tourist will not
materialise, nor will the consumption expansion of our limited market
take place.
1. Facilitation in making Sri Lanka a retail hub:
Lead:
Mr. Murali Prakash,
Group Managing Director/CEO,
Ambeon Capital and Ambeon
Holdings PLC
Members of the Working
Group:
Mr. G. Rajendran,
Chairman, Essential Food Commodities,
Importers and Traders Association
Mr. Charitha Subasinghe,
Chief Executive Officer, Jaykay
Marketing Services (Pvt) Ltd.
Mr. Lahiru Pathmalal,
CEO and Co-Founder Takas
Mr. Nasser Majeed,
Chief Executive Officer, Softlogic Retail
(Pvt) Ltd.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 113
IMPLEMENTATIONS
a)
Bring duty to zero or near zero
level on key tourist related retail
products. Key would be clothing
and accessories, impulse buying
electronic, electrical items and
complementary items.

The revenue loss of perceived duty
(plans are never met as volumes
do not take place) can be easily
surpassed through an additional
spend by a tourist at minimum USD
50-75 level where other forms of
taxes would kick in locally. With large
volume increases it could be safely
assumed that the PAL and other
charges on import will compensate
for the duty due to heavy volumes.
The neighbouring markets such as
India and even China would be
large markets for shopping.
b)
Implement an automated integrated
VAT refund system:

Current system does not work well
and hence does not work as a
positive factor toward tourist spend. It
is possible to invite overseas players
to set up this facility on a BOO
(Build, Own, Operate) basis thus its
wide spread and easily actionable
both for tourists and collection of
revenue.
c) Ease of visa for travel and safety of
travellers
d) A better and direct connectivity from
Sri Lanka to key destinations
e) A shopping festival as part of
retail hub activity formally and fully
supported by the Government
through:
i)
Fund allocations to carry
through this mechanism
ii)
Special facilities to retailers
during this period of promotion
(two months)
iii) Relevant line ministries to enact
policies to implement as a
national programme along with
tourism.
114
| WORKING DRAFT
INTERVENTIONS
Retail working
group proposals
SECTOR: Retail
Objective:
y
Key issues are skills gaps and labour shortages in particular
encouraging more women to enter and remain in the labour force.
Objective:
y
The right infrastructure would be key to facilitate any industry and
this would facilitate not only the industry but the country at large.
2. Labour reforms required:
3. Infrastructure development:
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 115
IMPLEMENTATIONS
Allow for part-time permanency and
amending EPF / ETF and related
acts to facilitate many to come
into part-time employment. This will
help employers too as for part time
functions they need not have full-time
heads.
Facilitate a clear structure on
vocational training to build the skills
gaps and offer wide and varied
curriculum on retail. A national
level integrated policy similar to
TAFE system in Australia. NAB and
other offering institutes, etc. can be
augmented and brought under one.
Consider importing labour where
required as a short-term measure to
have the required numbers to build
retail.
Permit layoffs based on an agreed
formula than having to refer to labour
commissioner every time.
Permit ex-pat worker spouses to be
gainfully employed without special
requirements. This will facilitate more
Sri Lankans working abroad to return
as well.
a) Storage and supply chain
infrastructure:
i)
Food and other retail
perishables being available
timely, better price regulations
and being competitive to
export, all depends on how
best harvest is preserved and
moved through.
1.
Permit cold and dry storage
set up through PPP with special
relief measures to private
sector
2.
Permit cold transportation as
a nation building effort with
special duty structures
b) To facilitate re-export zones:
i )
This is to get local companies
along with overseas partners
set up facilities that would make
Sri Lanka a retailers’ hub and will
cater to the entire subcontinent
at zero taxes or at a nominal
tax rate (e.g. 1%). Anything within
this zone is allowed to be re-
exported at zero cost.
116
| WORKING DRAFT
INTERVENTIONS
Retail working
group proposals
SECTOR: Retail
Objective:
y
Sri Lanka primarily is a cash-based economy. Digital payments/
systems are not matured compare to neighbours and global trends.
Cash retail is inefficient and expensive. Digital solutions will facilitate
less corruption (no in-between leakages), greater transparency, less
inefficiencies (returned cheques to others), speed (cash movement
real time) and being future centric as most tourist movements today
are based on the digital economy
y
Parallel systems tickets (for public transport). This is not digital in most
cases and in the few digital payment cases they are closed loop
(one system for one place such as highways)
4. Digital transformation:
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 117
IMPLEMENTATIONS
a) For payments, LankaPay in
collaboration with payment providers
to move towards cashless solutions.
This infrastructure has been built
but needs to be rolled out with the
Central Bank of Sri Lanka.
b)
Invest in open loop systems for tickets
by working with payment providers.
This would mean that one payment
solution can be used for rail/bus
highways, etc. (one card for all
travel).
c) Facilitate setting up of a infrastructure
for the entire country which would
facilitate digital transformation. PPP
where possible. RFPs can be opened
for such areas to attract investors
both local and overseas.
118
| WORKING DRAFT
INTERVENTIONS
Transport &
logistics working
group proposals
Integration and coordination of departments and
authorities presently related to transport. This would
cover services related to maritime, railway, aviation
and road.
Creating an Integrated National Transportation and
Logistics Action Plan and align with respective State
development plans to drive multi modal synergy.
Lead:
Mr. Romesh David,
CEO, South Asia Gateway
Terminals (Pvt) Ltd
Members of the working
group:
Prof Amal Kumarage,
Senior Professor, University of
Moratuwa
Ms. Kasturi Wilson,
Managing Director, Transportation,
Hemas Holdings PLC
Mr. H. D. A. S. Premachandra,
Director/Chief Executive Officer,
LAUGFS Terminals Ltd.
Ms. Gayani de Alwis,
Chairperson, The Chartered Institute of
Logistics and Transport
Mr. Ruwan Waidyaratne,
Managing Director,
Hayleys Advantis Ltd.
SECTOR: Transport and Logistics
REFORMS
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 119
IMPLEMENTATIONS
Re-examine the current regulatory
functions and responsibilities among
different agencies with a focus
on streamlining interactions, and
integrating processes. An example
of this would be to examine the
separating of the regulator,
common service provide and the
operator in aviation and maritime.
Each department and authority
policies should include a National
Transport Policy, Highway Policy and
Sustainable Development Policy in
their agenda.
Group logistics related authorities
under a single ministry so that a
holistic integration is possible with
one vision and policy.
Appoint a competent authority
who could co-ordinate amongst
related institutions and stakeholders
(including Water Board, Ceylon
Electricity Board and Telecom) where
road network is explored.
Define a five to ten year National
Logistics and Transport Action
Plan that has bi-partisan political
acceptance and drives the
objectives, priorities and related
interventions across the logistics
value chain in consultation with
relevant ministries taking into account
the existing policy documents such
as the National Export Strategy,
National Maritime Policy, National
Ports Development Plan.
Form a private – public National
Logistics and Transport Committee
to drive private and public sector
investment and action plans which
are congruent with the long-term
National Logistics and Transport
Action Plan. This committee should
look at positioning Sri Lanka as
a hub/destination for maritime,
aviation and logistics. The committee
should drive the required increase
in capacity and infrastructure,
improvement in easing of doing
business, policy consistency and
transparency.
The topic of agency equity
ownership towards foreigners will
need further structured discussions
with all stakeholders. Meanwhile
steps should be taken to facilitate
investment by providing an enabling
environment.
120
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
Enhancing efficiency through increased digitisation,
technology adoption and other measures.
Encourage the use of public transport, high
occupancy vehicles and non-motorised transport in
urban areas. Influence the shift from private modes to
rapid transit systems through policies that focus
on quality.
Mr. Dinesh de Silva,
Head of Shipping & Logistics,
Unilever Sri Lanka Ltd.
Mr. Tissa Wickramasinghe,
General Manager, Commercial &
Marketing, Colombo International
Container Terminals
Ms. Shehara Jaywardana,
Joint Managing Director, McLarens
Holdings Ltd.
Mr. Chrisso de Mel,
Immediate Past Chairman, Sri Lanka
Shippers’ Council
Mr. Iqram Cuttilan,
Managing Director,
Aitken Spence Shipping Ltd.
Mr. Jiffry Zulfer,
Director, PickMe
Mr. Suren Abeysekera,
Chairman, Sri Lanka Shippers’ Council
Mr. Sanjeeva
Abeygoonewardena,
President, Sri Lanka Association for
Air Express Companies
Mr. Amal Rodrigo,
Representative, Hub Operators
Association of Sri Lanka
BUS
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 121
IMPLEMENTATIONS
A system to collect basic transport
and logistics statistics in a timely and
efficient manner.

Implementing Customs reforms to
enable efficiency and increase
transparency. Applying a de minimis
threshold will also act as a forerunner
in getting broader improvements in
Customs facilitation.
Digitalization of the Postal
Department to accommodate a low
cost distribution model for last mile
deliveries.
Technology enablement to support
the implementation of logistics hub
concept, e-governance, single
window, e-commerce and port
community system.
The Trade Information Portal to
be continuously updated to be
the single point of reference for all
logistics and trade facilitation matters
in the country.
Transport infrastructure measures
y
Bus reforms/bus priority lanes/BRT.

Integrated Vehicle and Fuel Tax
Policy to influence users to divert to
public transport usage from private
vehicle usage.
Focus on construction of highways
covering trunk roads/routes.
Set standards and specifications
in respect of any passenger
transportation vehicle/service.
Enable technology to cover access,
speed, accuracy, etc.
Ensure provision of reliable and
regular service during all times of
the day.
y
Prepare timetables for bus
service operations to minimise
unhealthy competitive practice
and to provide equal
and equitable operating
opportunities for all.
y
Facilitate real time information
provision on bus time tables for
users
122
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
Mr Jagath Pathirana,
Immediate Past Chairman, Sri Lanka
Freight Forwarders Association
Mr Dimithri Perera,
Country Manager, DHL Keells (Pvt) Ltd.
RAIL
Encourage the use of rail transport, influence the modal
shift of passengers and goods from road to rail by making
comfortable and faster service offerings.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 123
IMPLEMENTATIONS
INVESTMENTS
Utilisation of land owned by the Railway Department. Railway stations to be
developed as service/commercial centres.
y
Station based developments of property, auxiliary services, ground rentals,
park and rides and convenience focused developments
y Develop railway for freight transport facilities
y Attract longer distance freight to railways

Initiate measures for commodity transportation with the correct distance
identification
Railway modernisation to increase frequency and capacity for :
y
Station modernisation
y
Railway electrification
y
Rapid transit systems (monorails/LRT)
Promote infrastructure construction for intermodal/ multimodal centres through
y
Integration with port, logistics centres and free trade zones
Centralised platform for e-ticketing
y Modernise the existing ticketing system to an online/integrated system
y Automated seat reservation system
y
Introduce a mobile-based rail tracking and seat reservation system for
public transportation
Private investment
Public-private investment
Public-private investment
Public-private investment
Public-private investment
124
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
LOGISTICS
Improving supply chain of perishables/cold storage
Promote development of multi modal infrastructure
enabling integration with global and regional value
chains through seamless multimodal passenger and freight
transfer, with adequate storage and handling and value
added services.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 125
IMPLEMENTATIONS
INVESTMENTS
Policy focus on improving cold supply chain for perishables (Agriculture / dairy):
y
Provision of adequate cold storage facilities
y
Proper infrastructure facility developments to facilitate Common User
Collection Centres
y
Promote effective agri-logistics involving access to cold chain, storage,
packaging and other post-harvest management techniques
Implementing standards on vehicles used for cargo transportation specially
related to SME industry
Setting up large-scale logistics centres and related projects by releasing
Government-owned lands, rationalization of legislation and more
Enabling integration with global value chains through seamless multi modal
connectivity
Focus on private investment that
is encouraged through land, duty
waivers on equipment, agri-related
financing, green financing.
Public-private investment
126
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
MARITIME
Policy focus on developing Colombo Port
Rationalise the usage and development of other ports to
complement each other
Eg: Hambantota, Trincomalee and Galle to exploit the unique logistics
potential
Fast-tracking implementation of e-connectivity to
facilitate seamless interaction between various
stakeholders.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 127
IMPLEMENTATIONS
INVESTMENTS

Initiate terminal developments at Colombo port that includes:
y
East and West container terminals- Increase container terminal capacity
(potential throughput of 15-16 million TEUs by 2025)
y Oil and bunkering handling terminal
y
Passenger/cruise Terminals
Enhance port infrastructure:
y
Improve ancillary and marine services (bunkering, handling, safety, ship
supply services, tugs, pilotage)
Specialisation of ports where break bulk, liquid bulk, solid bulk and container
handlings are segregated.
Align Hambantota into national ports master plan to complement each other

eg: ships with non-container cargo should be moved out of Colombo
Promote free port concept outside the port (dry ports)
Phased implementation of a port community system, Electronic Data
Interchange (EDI), e-commerce to be rolled into the National Single Window.
The implementation to be done with institutionalisation of the change and with
education of the required stakeholders.
The establishment of a single-stop, single-window, electronic port goods
declaration and customs inspection mechanism for quick entry and exit of
international cargo
Public-private Partnership
Public-private Partnership
Public-private Partnership
Public investment through private
sector dialogue
128
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
Diversifying the hub offerings to cover cruise, cars, oil,
gas and more, using the diversity of the ports.
AIR
Separate roles of landlord and common services
provider (ATC/security, etc.) from airport operator
(Ground handling of Pax/cargo).
Decide on funding mechanism for long overdue BIA
expansion.
SAFETY, SUSTAINABILITY AND
DIVERSITY
Encouraging adoption of sustainable and green
logistics in the country.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 129
IMPLEMENTATIONS
INVESTMENTS
Strengthening the offerings at Sri Lankan ports such as vessel ownership, maritime
education, dispute resolution, maritime laws and arbitration
Expansion of passenger and cargo handling facilities; such as for aero bridges,
transit spaces, check-in and Immigration/Emigration counters, ramp space, and
cargo terminals.
Deregulate ground handling and assign regulator for handling
Initiate steps to increase cargo and runway capacity
Public-Private investment – Use a
derivative of port PPP model
Technological approaches to improve the performance of transport
equipment and facilities – use of IoT
Promote sustainable reverse logistics
Private
130
| WORKING DRAFT
INTERVENTIONS
Transport & logistics
working group proposals
SECTOR: Transport and Logistics
Policy focus on road, air and sea safety considering the
environmental implications
Encourage diversity and inclusiveness in the sector
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 131
IMPLEMENTATIONS
INVESTMENTS
Highlight road safety as an urgent national issue and mobilise a National Task
Force including public, private and civil society stakeholders.
Framework to monitor the safety of
y
Road design
y
Road discipline
Set standards and specifications in respect of any passenger/goods
transportation vehicles/services to prevent poor standards and operating
practices. This includes:
y
Vehicle engine standards
y
Low emission zones
y Operator license
y
Vehicle maintenance and operational tests and checks
Setting standards for safe handling of petroleum, chemical and petrochemical
products and waste
Public-Private
Establish vocational training centres for women and open up jobs for women
such as gate operators, bus drivers and more. To enable this amend relevant
administrative circulars and national labour laws
132
| WORKING DRAFT
INTERVENTIONS
Lead:
Prof. Malik Ranasinghe,
Chairman, Sampath Bank, Members of
the University Grants Commission
Members of the working
group:
Prof. Nilanthi De Silva,
Senior Professor Parasitology,
University of Kelaniya
Prof. Lalith Gamage,
Managing Director/CEO, Sri Lanka
Institute of Information Technology
(SLIIT)
Dr. Piyasiri Tilakaratne,
Vice Chancellor, University
of Vocational Technology
Mr. Vajira Kulatilake,
Director / Chief Executive Officer,
NDB Capital Holdings Ltd.
Higher Education
group proposals
SECTOR: HIGHER EDUCATION
Objective:
y
Students have ownership and freedom of choice for their higher
education and the system moves from “Free without Choice” to “Self
Funded with Choice”.
y
HEIs would focus on USPs, competing with other institutions,
facilitating innovation and growth.
y
Students will be more eager to participate in tertiary education.
Objective:
y
Establish a standard of quality throughout the higher education
system.
1. Provide students greater freedom to choose their
desired course of study and Higher Education Institutes
(HEIs), both State or non-State.
2. Establish quality assurance and accreditation authority
encompassing all HEIs (State and non-State) in
Sri Lanka.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 133
IMPLEMENTATIONS
Provide endowments or grants for
students to enroll themselves in
higher education. The HEIs will be
reimbursed by Treasury / UGC /
TVEC on the submission of those
certificates. Selection of students
by the Higher Education Institutions
(HEIs).
Providing students rather than the
institutions with funds to incorporate
choice. Initially commence this as
a pilot project with a selected few
streams/degrees.
Develop a nation-wide academic
portal for students to access the
courses offered by HEIs, similar to UK’s
UCAS system.
The academic portal would have all
information regarding course modules
and thereby enabling students to
choose their desired courses.
The authority must be independent, robust
and put forward a national system for
quality assurance and accreditation.
Some of the essential features should
include:
Compulsory registration of all
HEIs (public and private) and the
programmes of study offered by them;
An authority with a clear legal
mandate to offer accreditation of
registered HEIs and their programmes
of study;
The accreditation authority must
be independent, i.e., not under the
Ministry of Higher Education or the
UGC;
The composition of the members of
the authority must reflect its mandate
and ensure its ability to function
effectively.
134
| WORKING DRAFT
INTERVENTIONS
Higher Education
group proposals
SECTOR: HIGHER EDUCATION
Mr. Murtaza Jafferjee,
CEO, JB Securities Ltd.
Mr. Faizal Salieh,
Non-Executive Independent Director,
Cargills Bank Ltd.
Objective:
y
Ensuring that tomorrow’s graduates are relevant and employable
through the participation of employers with HEIs.
y Allowing open access to all course information.
Objective:
y
Promote strong collaborations between TVEC, NAITA, DTET and
professional and employer bodies.
y
Expand TVEC to encompass emerging skills requirement
y
Establish training institutions and provide progressions pathways.
3. Ensuring that the courses are relevant to today’s
rapidly-evolving global economy.
4. Develop technical and vocational HEIs to expand their
reach and target industry needs.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 135
IMPLEMENTATIONS
Engaging employers, industry experts,
professional bodies and chambers
of industry to update and revise the
curriculum to be current with emerging
trends.
Establish department industry
consultative Units in all HEIs.
This unit will ensure administrative
efficiency and will also provide
students with insights into trends in
emerging skills.
Promote strong collaborations
between NAITA, DTET, TVEC
and employer bodies to expand
apprenticeship based training and
provide a training allowance to
apprentices.
Establish several training institutions in
collaboration with world-renowned
companies/training institutions,
similar to Ceylon German Technical
Training Institute, in areas of modern
technology.
Provide seamless progression
pathways from secondary education
to technical and vocational
education for those who do not
enter universities. Expand and
strengthen the newly-introduced
vocational stream in secondary
education.
Establish an endowment/loan
scheme similar to the scheme
proposed to university education
for middle level Technical and
vocational education in areas of
high labour market demand.
136
| WORKING DRAFT
INTERVENTIONS
Health working
group proposals
SECTOR: Health
Lead:
Dr. Lakith Peiris,
Managing Director, Hemas Hospitals &
Laboratory Chain
Members of the working
group:
Dr. Anil Samaranayake,
Director Health Information of the
Ministry of Health
Dr. Prasad Medawatta,
Group CEO, Lanka Hospitals
Dr. Ravindra P. Rannan,
Eliya - Executive Director & Fellow of
the Institute of Health (IHP)
Mr. Sirimal Fernando,
President - The Sri Lanka
Pharmaceutical Manufacturers’
Association
Ms. Kasthuri Chellataja,
President, The Sri Lanka Chamber of
Pharmaceutical Industry
1. Introduce Electronic Medical Records (EMR)
2. Address Non-Communicable Diseases (NCDs)
3. Effective utilisation of healthcare assets through
public private-partnership
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 137
IMPLEMENTATIONS
A)
Establish a electronic health record
system so that patients could
access their individual health record
irrespective of the place of treatment
and that health providers may
update that health record as they
treat the patient.
B) Develop Sri Lankan laws regarding
protection and sharing of personal
medical data of individuals
A) Establish a national framework on
NCD prevention, screening and
treatment that is adhered to by
healthcare providers in the private
and public space
B) Establish a continuous education/
awareness programme across
private and public sectors regarding
NCDs, with the aim of reducing
the prevalence of NCDs in the
population of Sri Lanka
C) Establish a centralised data
collection, analysis and reporting for
the purpose of comprehensive health
information view
A) Currently there is a long waiting
time for critical interventions and
diagnostic procedures in the public
sector that compromises patient
safety and the quality of life of
patients. Establishment of a PPP
between the public sector and the
private sector healthcare providers
will reduce long waiting times,
reduce the burden on the public
healthcare system, can reduce
capital expenditure by the GOSL
to increase capacity and for the
acquisition of new technology whilst
providing better services and clinical
outcomes at a lessor cost
B) Establish PPPs where private sector
healthcare institutions are allowed to
service an empaneled population if
Government healthcare institutions are
not present to service that population
C) For the major hospitals in the
public sector, the usage of certain
resource capacities are being
under-utilised at the moment.
This may include amongst others,
imaging services, operating theatre
and other diagnostic equipment/
services. Through the implementation
and use of a centralised platform
for scheduling , it would allow the
Ministry of Health (MoH) to have
a clear understanding of hospitals
where imaging devices are over and
under utilised so that the MoH can
accordingly manage the demand.
The same may be replicated in the
private sector and at an advanced
stage so that patients may seamlessly
be able to move to/from public
sector to private and vice versa.
138
| WORKING DRAFT
INTERVENTIONS
Health working
group proposals
SECTOR: Health
Mr. Ruwan Kumara,
Acting Chairman, the Food &
Beverages Steering Committee of the
Chamber
Mr. Shayam Sathasivam,
Chairman, the Cosmetics and
Pharmaceuticals Steering
Committee of the Chamber / Former
President, The Sri Lanka Chamber of
Pharmaceutical Industry
4. Capacity enhancement of Healthcare / Pharma
through higher education programmes
5. Promote medical tourism
6. Promote local pharma manufacturing
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 139
IMPLEMENTATIONS
A) Encouragement of setting-up higher
education facilities that support the
healthcare and pharmaceutical
industry.
B) Permit the registration and
recognition of nurses, MLTs,
pharmacists and other paramedics
to at least have a separate register.
C) Government to offer concessionary
loan schemes for nursing students
(similar to offered by other countries
like India by the Kerala Government).
D) Develop an ongoing mechanism
to incentivise students towards the
healthcare and pharmaceutical
industries, such as payment of a
stipend, etc.
A)
Establish a visa scheme for tourists
seeking to come to Sri Lanka for
medical treatment. This visa scheme
should be developed with a
specified criteria such as the required
stay time for patients undergoing
procedures in Sri Lanka.
B)
Promote Sri Lanka as an emerging
medical hub through Government
intervention such as funding for
promotional material, private
sector operators to showcase their
capability in different overseas
forums/events, identify key health
intervention that can be marketed to
select markets, etc.). This hub should
be supported by a digital health
record that can be transferred/
accessed by the patient, access to
quality-certified medicine, access to
qualified healthcare professionals.
C) Promote traditional health
aggressively in selected overseas
markets through development of
country specific promotional tools
and campaigns to establish/promote
Sri Lanka as an emerging wellness
hub
A) Position Sri Lanka as a global
manufacturer, through:
I.
Commencement of a study to
identify key molecules or drugs
that Sri Lanka should specialise
in as a hub for pharmaceutical
manufacturing and export to
meet global market demand.
II.
Engage with international
consultants to understand what
global markets where Sri Lanka
can engage as the manufacturer
for key identified products.
III. Government to develop
policy framework and relevant
committee to facilitate export-
oriented pharmaceutical
manufacturing
IV.
For identified molecules or
drugs, reach out to the leading
manufacturers in order to assess
what the country could do
in order to attract contract
manufacturing in Sri Lanka.
B) While the Government has
allocated Rs. 100 million towards a
biotechnology park, the continuous
focus towards this area should be
carried forward with appropriate
follow through to ensure that
this is the initiation of Sri Lanka
as a research hub for select
pharmaceutical products.
C) Examine how the Bio-Technology Park
and Nano-Technology Park (through
their respective ministries and
bodies) can be more synergistically
aligned in order to benefit the
pharmaceutical sector in Sri Lanka.
140
| WORKING DRAFT
INTERVENTIONS
Health working
group proposals
SECTOR: Health
7. Ensure pharmaceutical importers have sustainable
supplies to patients
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 141
IMPLEMENTATIONS
A) Development of a quality standard
for pharmaceutical products and
setup of a testing facility in order
to facilitate this monitoring of the
pharmaceutical products being
manufactured and imported into
Sri Lanka. Further, development
of regulations relating to the
quality review process to be
conducted by the independent
body charged with conducting
an ongoing quality review of
products locally manufactured and
imported to Sri Lanka alongside
the overall distribution chain of
these pharmaceutical products to
the end-customer. Subsequent to
the regulations being published,
circulation of quality guidelines and
results from quality inspections to
be made public and post-market
surveillance to be more regular and
pro-active (currently complaint-
initiated)
B) With regard to the imposition of price
controls: Where price control of
identified pharmaceutical products
are required, ongoing dialogue
and sufficient advance notice to
be given to importer/distributors to
account for their ordering lag times
and optimal order quantities in terms
of months for those pharmaceutical
products.
C)
Introduce pricing refinement:
Development of a pricing formula
through identifying acceptable
solution to the debate around CIF+
pricing model – e.g. benchmark on
Sri Lanka IQVIA median pricing if an
existing molecule, look to regional
pricing medians if a new molecule.
D) Review of the existing government
procurement guidelines in order
to incorporate the shift in the
global market towards biological.
This is done with the view of
identifying the required procurement
quality guidelines for biological
when compared to traditional
pharmaceutical products (i.e.
government procurement guidelines
applicable for bio-similar may not be
the same that applies to traditional
pharmaceutical products, where bio-
similar cannot be tested the same
way a traditional pharmaceutical
product). Implementation of this
policy can through review of existing
regulatory approval or availability
of the product in developed markets
(e.g. FDA approved, however, in
the absence of FDA-approval be
commercially available in the country
of origin and USA, EU, Japan and
other developed countries).
142
| WORKING DRAFT
Health working
group proposals
SECTOR: Health
Intervention
Point
Proposed KPI
1 A)
Total number of public PMCIs that are utilising an EMR – 600 by 2025
Total number of private healthcare institutions that are utilising an EMR – 60 by 2025
2 A)
Percentage of public healthcare institutions complying with the national framework for NCD prevention
Percentage of public healthcare institutions complying with the national framework for NCD screening
Percentage of public healthcare institutions complying with the national framework for NCD treatment
Percentage of private healthcare institutions complying with the national framework for NCD prevention
Percentage of private healthcare institutions complying with the national framework for NCD screening
Percentage of private healthcare institutions complying with the national framework for NCD treatment
3 A)
A central database that will capture the waiting time for patients who are seeking the following services:
CABG, angiogram/PTCA, electrophysiology, ASD / VSD closures, coarctation of aorta , aortic valve stenosis
Pulmonary valve in paediatrics, total knee replacements, total hip replacements, arthroscopies
Shoulder replacements, spinal surgeries (Laminectomy, etc.). Presently these times are available for the Western
Province.
3 C)
As a percentage of the total number of major hospitals (Teaching Hospitals, Provincial General Hospitals,
District General Hospitals and Base Hospitals), the number of major hospitals that are connected to a
centralised system to monitor asset usage.
As a percentage of the total number of major hospitals (Teaching Hospitals, Provincial General Hospitals,
District General Hospitals and Base Hospitals), the number of major hospitals that are utilising a system-based
scheduler for setting appointments for imaging devices and operating theatres
5 A)
Total number of visas issued for foreigners to enter Sri Lanka for the purpose of medical tourism
Total number of foreign patients treated in Sri Lanka
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 143
Intervention
Point
Proposed KPI
7 A)
Of the total pharmaceutical products sold in Sri Lanka, the percentage of pharmaceutical products that
are regulated through quality standards enforced by the Government of Sri Lanka through the respective
regulatory/NMRA.
Of the total pharmaceutical products sold in Sri Lanka, the percentage of pharmaceutical products that are
tested through the appointed testing facility before being sold in Sri Lanka
Total number of quality reviews of local manufacturers being conducted by the respective regulatory as
against the total population of local manufacturers
Total number of quality reviews of local distributors being conducted by the respective regulatory as against
the total population of local distributors
7 C)
Total number of pharmaceutical products being sold in Sri Lanka where the pricing is determined through the
pricing formula
144
| WORKING DRAFT
INTERVENTIONS
Lead:
Ms. Shiromal Cooray,
Chairman Jetwing Hotels Ltd.
Members of the working
group:
Mr. Mahen Kariyawasan,
The Sri Lanka Association of Inbound
Tour Operators
Mr. Harith Perera,
The Sri Lanka Association of Inbound
Tour Operators
Mr. Nalin Jayasundera,
The Sri Lanka Association of Inbound
Tour Operators
Mr. Amith Sumanapala,
The Sri Lanka Association of Inbound
Tour Operators
Mr. Sanath Ukwatte,
The Hotels Association of Sri Lanka
Tourism working
group proposals
SECTOR: Tourism
1. Moving towards a value-driven industry while
managing the maturing tourism industry in a
sustainable manner.
2. Recognition of tourism as a key export services
industry
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 145
IMPLEMENTATIONS
Study and implement best practices
from countries such as Costa Rica
which focuses on value, quality and
sustainability.
Target five million tourists and USD 10
Bn in tourism earnings by 2025. With
the increase in the number of arrivals,
the strategy should be designed to
increase the average spend.
Examine other value metrics in the
industry. This will require improvement
in data collection by the industry as
well as institutions like SLTDA. (Refer
appendix 1 for an exhaustive list)
Enable the industry to avail the similar electricity tariffs as an export sector
Devise a National Tourism Export Strategy
TOURIST ARRIVALS
2018
2025
2.33 Mn
5 Mn
11
.5%
C
AG
R
TOURISM RECEIPTS
2018
2025
12
.5%
C
AG
R
USD 4.3 Bn
USD 10 Bn
146
| WORKING DRAFT
INTERVENTIONS
Tourism working
group proposals
SECTOR: Tourism
Mr. Asoka Hettigoda,
The Hotels Association of Sri Lanka
Mr. M. Shanthikumar,
The Hotels Association of Sri Lanka
Ms. Amal Goonetilleke,
The Hotels Association of Sri Lanka
3. Align tax policies to be in line with the region to
remain competitive.
4. Formation of an inter-ministerial taskforce comprising
the respective subject minister, secretary to the
ministry and the director general/heads for the
respective department/Institution. This is to develop
policies for the industry in a coordinated manner to
address legal, regulatory and procedural issues.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 147
IMPLEMENTATIONS
Country
Sri LankaIndiaBangladeshPakistanMalaysiaSingaporeMaldivesThailandVietnamIndonesiaIncome Tax
14% 25%-30%
25%
30%
24%
17%
15%
20%
20%
25%
VAT, NBT and additional taxes paid on the top-line
VAT and GST
Now at 7%
(previously
15%)
18%
15%
17%
0%
7%
12%
7%
10%
10%
Other taxes
applicable
2% (NBT)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
TDL
1%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Provincial Tax
Up to 1%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Inter-Ministerial Taskforce
Tourism Ministry and Key Institutions such as SLTDA, SLTPB, SLCB
Ministry of Transport
and Civil Aviation
Ministry of Megapolis
Department of
Railways
Ministry of Foreign
Affairs
Ministry of Wildlife
Ministry of
Environment (including
CEA)
Central Cultural Fund
National Crafts
Council
Sri Lanka Police
Ministry of Youth
Ministry of Labour
Department of
Immigration and
Emigration
Ministry of Finance
(Excise Department,
Customs, Inland
Revenue)
Ministry of Local
Government
Ministry of Defence
Ministry of Primary
Industries
Department of
Ayurveda
Board of Investments
Proposed Policies
The ministries/departments involved in the tourism industry working together in one forum to take coordinated decision, with Tourism
Board being the main stakeholder. Examine matters such as (Refer appendix 2),
148
| WORKING DRAFT
INTERVENTIONS
Tourism working
group proposals
SECTOR: Tourism
5. Re-look at the Aviation and Port Policy
(in terms of cruise tourism)
6. Develop a Disaster Management Plan to manage
crisis situations (natural disasters / terrorist attacks).
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 149
IMPLEMENTATIONS

Increase capacity to match
expected tourists at airports and sea
ports.
Special emphasis to be given for
cruise tourism. SLTDA to work with
relevant authorities to bring local
infrastructure and standards to
global cruise benchmarks.

Introduce a tourism friendly aviation
policy. SriLankan Airlines to play an
integral part in the development and
promotions of tourism.

Improve domestic airports and air
travel facilitate convenient and
affordable access to the major
tourism provinces.

Industry, private and public partnership
together with higher authorities to draw
attention to high national security
standards and map-out a crisis and
disaster management plan.
Have a clearly defined procurement
process for offshore PR and marketing
for the tourism industry during a crisis
period as it requires immediate action.
To develop a central news point to
disseminate regular and accurate
information on the actual situation.
Develop clear guidelines to handle
local and international media during
a crisis period in order to avoid
sensationalisation and dilution of
Brand Sri Lanka.
Crisis management plan to be
regularly reviewed, trial tested and
communicated.
150
| WORKING DRAFT
Appendix 1
In reference to Point 1 - Tourism
Proposed Interventions/Activities
Tourism marketing to be a key lever in moving towards a value driven sector: Procurement procedures for tourism promotional initiatives to
be made more flexible and dynamic in sync with the operational model of the industry. SLTPB funds to be used only for offshore promotions
approved by the said board.

Introduce tourism in the secondary education curriculum.

Introduce a visitor management system for cultural sites and wildlife parks. This will manage over visitation of the sites, offering different time
slots and price differentiations.
Organise and improve better facilitation at the tourist sites, national parks and any other relevant sites to international standards.
Engage to support and find solutions to the human elephant conflict.
Common policy on wildlife / marine sustainability and its impact to tourism under one policy to enhance tourism.
All entrance tickets to be centralised with easy purchasing options reaching international standards.
Promote and develop the rural industry to make them interesting tourist attractions.
Enhance Colombo’s entertainment facilities to attract and cater to exclusive foreign visitors.
SRI LANKA ECONOMIC ACCELERATION FRAMEWORK 2020-25 | 151
Appendix 2
In reference to Point 4 - Tourism
Proposed Policy, legal/regulatory issues to be taken up by proposed
Inter-Ministerial Taskforce
Moratorium on approvals for new inventory in Colombo and areas of oversupply
Development of a state-of-the-art convention centre (capacity for over 6-7k) for MICE tourism to maintain the existing room inventory.
Regulation of all accommodation units (including homestay) of non-residents and monitoring of due remittances as per the Financial Act.
Devise appropriation regulation on construction of properties limiting the number of floors on the coastal line and near the ancient city
sites and in the areas of beautiful landscape. Develop blueprint for every destination, covering all relevant areas relating to planning of
land space.
Construction of sites sewerage management, garbage disposal management, etc.
Plan out and determine maximum number of rooms required in different areas of the island and such numbers to be broken down to
boutique, five-star, four-star, three-star, two-star and below, and extend approvals accordingly.

Information hubs to be established with major cities, in particular highlighting Tourist Police.
Devise guidelines to provide accessibility for differently-abled people.
System of licensing and approvals to be brought strictly within the given framework.
All the licensing and approvals to continue under the present gazette notification but with strict monitoring.

Improve the network, quality, frequency, connectivity, and booking system of air transport and the train system.
project
partners
The document would not have been compiled without the
support from the staff of EY , KPMG and PwC. We are grateful
to the following individuals for their contribution:
EY
Waruna Perera - Senior Director – Transaction Advisory Services
Mithun Gnanasekeran– Senior Manager – Transaction Advisory Services
Yasith Fernando – Senior Manager –Advisory Services
Nevinda De Silva – Manager – Transaction Advisory Services
Nipuna Kadenearachchi - Assistant Manager – Transaction Advisory Services
Srimantha Jayawardena- Assistant Manager - Transaction Advisory Services
Lalinda Perera -Assistant Manager - Transaction Advisory Services
Nilakshi Morage - Executive – Transaction Advisory Services
Kavishka Indraratna - Associate - Advisory Services
Vindya Katipearachchi - Trainee Analyst - Transaction Advisory Services
PwC
Ruvini Fernando – Director
Aruna Perera – Director
Kavinda Weerakoon – Director
Maduranga Hettiarachchi – Consultant
Abhishek Kalupathirana – Consultant
Prashanthan Jeyavarman – Associate Consultant
Kieron Cooke – Analyst
KPMG
Dulitha Perera – Partner
Kamaya Perera – Partner
Raditha Alahakoon – Director
Ajantha Weerasekera – Director
Sashiprabha Dharmadasa – Director
Dhinali Pieris – Associate Director
Navya Gunawardena – Manager
Aruni Kulatunga – Manager
Shenelle Perera – Assistant Manager
Chamil Kodithuwakku – Assistant Manager
Aaqil Yakoob – Senior Consultant
Piyumi Bandaranayake – Associate Consultant
Azlan Sourjah – Junior Executive
Ashen Fernando – Analyst
Designed & produced by
The Ceylon Chamber of Commerce
50, Navam Mawatha, Colombo 02, Sri Lanka
www.chamber.lk