[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-108650-en":3,"doc-seo-108650-105":30,"detail-sidebar-cat-0-en-105":92},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":13,"seo_description":14,"update_tm":28,"read_time":29},108650,7971461740886,"Theodore","https://ap-avatar.wpscdn.com/davatar_3d24733baf745e90a7e4bdd5f77d97b2",8,"Research & Report","Country Private Sector Diagnostic - Creating Markets in Sri Lanka - Private Sector-Led Inclusive Growth from Islands of Excellence - July 2022","Country Private Sector Diagnostic for Sri Lanka examines strong growth and human development over the past decade alongside the challenges created by policy distortions, institutional complexity, and the COVID-19 shock. The report identifies key constraints facing private businesses, including macroeconomic imbalances, inconsistent regulations, protectionism, trade fragmentation, and weaknesses in an enabling input supply. It also outlines opportunities to advance Sri Lanka’s 21st-century trajectory by expanding tourism jobs, strengthening “Islands of Excellence” in IT, specialized manufacturing, and agribusiness, and improving education, finance, transport, and electricity for market-led inclusion.","Public Disclosure Authorized Public Disclosure Authorized  \nPublic  \nCOUNTRY PRIVATE SECTOR DIAGNOSTIC  \nCREATING MARKETS IN SRI LANKA  \nPrivate Sector-Led Inclusive Growth from Islands of Excellence  \nJuly 2022  \nAbout IFC  \nIFC—a member of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create marketsand opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, [visit www.ifc.org](visit www.ifc.org).  \n© International Finance Corporation 2021. All rights reserved.  \n2121 Pennsylvania Avenue, N.W.  \nWashington, D.C. 20433 [www.ifc.org](www.ifc.org)  \nThe material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. The findings, interpretations, views, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the Executive Directors of the International Finance Corporation or of the International Bank for Reconstruction and Development (the World Bank) or the governments they represent.  \n[Cover Photo: Rakitha Wickramaratne/Shutterstock.com](Cover Photo: Rakitha Wickramaratne/Shutterstock.com)  \nCONTENTS  \nACKNOWLEDGMENTS VI  \nABBREVIATIONS VII  \nEXECUTIVE SUMMARY AND MATRIX OF ACTIONS IX  \n1. A DECADE OF STRONG GROWTH AND HUMAN DEVELOPMENT  \nHITTING CHALLENGING TIMES 1  \n1.1 Government Role Facing Headwinds 5  \n1.2 Quality of Growth Falls Short 8  \n1.3 State of the Private Sector 14  \n1.4 The Impact of COVID-19 17  \n2. KEY CONSTRAINTS OF THE ECONOMY FOR THE PRIVATE SECTOR AND  \nTHE WAY FORWARD 19  \n2.1 How the Sri Lankan Economy Seems to Have Grown in Spite of the Distortions 19  \nBusinesses Finding a Way to Work Around the Distortions 19  \nMaking Use of the Global Marketplace 19  \nMultiple Distortions Compounding Each Other 20  \n2.2 Main Cross-Cutting Constraints 20  \nMacroeconomic Imbalances 22  \nDistortionary and Inconsistent Policies and Institutional Complexity 25  \nProtectionism and Lack of Trade Integration 26  \nA Poor Investment Climate Affecting All but a Few Companies 29  \nPolicies that Stifle Land Access, Use, and Entrepreneurship 31  \n2.3 Inadequate Supply of Enabling Inputs 34  \nEducation: The Skills Base Does Not Match Demand 34  \nFinancial Sector: Public Borrowing Crowds-Out SMEs 41  \nTransport: Hub Opportunities Remain Untapped 47  \nElectricity: Meeting Future Demand at Market Prices 52  \n3. OPPORTUNITIES TO PUT SRI LANKA ONA 21ST CENTURY TRAJECTORY 55  \n3.1 Exploit the Potential of Tourism to Create Jobs in Lagging Regions and  \nBalance External Accounts 55  \nCurrent Sector Performance 55  \nConstraints and Way Forward 58  \n3.2 Support the “Islands of Excellence” in IT, Specialized Manufacturing, and Agribusiness 60  \nStrengthen the Innovation Ecosystem 61  \nIT-Enabled Services 66  \nKnowledge Intensive and High-Quality Manufacturing and Agriculture 69  \nREFERENCES 74  \nAPPENDIX 78  \nAppendix A. World Bank Lending and IFC Investment Portfolios 78  \nAppendix B. SOE Presence in the Economy, by Market Share 81  \nAppendix C. Islands of Excellence 83  \nNOTES 87  \nFigures  \nFigure 1.1. Poverty rate (1985–2013) 2  \nFigure 1.2. Health indicators (2017) 2  \nFigure 1.3. Access","cbCaieTJpfw6GWK3","https://ap.wps.com/l/cbCaieTJpfw6GWK3","pdf",6176333,6,1,110,"English","en",105,"# Executive Summary and Matrix of Actions\n# A Decade of Strong Growth and Human Development\n## Hitting Challenging Times\n# Key Constraints of the Economy for the Private Sector and the Way Forward\n## How the Sri Lankan Economy Seems to Have Grown in Spite of the Distortions\n## Main Cross-Cutting Constraints\n## Inadequate Supply of Enabling Inputs\n# Opportunities to Put Sri Lanka on a 21st Century Trajectory\n## Exploit the Potential of Tourism\n## Support the “Islands of Excellence”","[{\"question\":\"What is the main focus of this country diagnostic for Sri Lanka?\",\"answer\":\"It assesses how Sri Lanka’s private sector has developed and what constraints and opportunities shape private sector-led inclusive growth.\"},{\"question\":\"Which main constraint areas are highlighted for the private sector?\",\"answer\":\"The report emphasizes macroeconomic imbalances, distortionary and inconsistent policies with institutional complexity, protectionism and weak trade integration, and an investment climate that hampers most firms.\"},{\"question\":\"What opportunities does the report propose to support Sri Lanka’s 21st-century trajectory?\",\"answer\":\"It recommends leveraging tourism for jobs in lagging regions and building “Islands of Excellence” across IT, specialized manufacturing, and agribusiness through strengthened innovation and enabling inputs.\"}]",1784472957,277,{"code":4,"msg":31,"data":32},"ok",{"site_id":25,"language":24,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":87,"head_meta":89,"extra_data":91,"updated_unix":28},"country-private-sector-diagnostic-creating-markets-in-sri-lanka-private-sector-led-inclusive-growth-from-islands-of-excellence-july-2022","",{"@graph":36,"@context":86},[37,54,69],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,48,51],{"item":41,"name":42,"@type":43,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":47},"https://docshare.wps.com/document/","Document",2,{"item":49,"name":12,"@type":43,"position":50},"https://docshare.wps.com/document/research-report/",3,{"item":52,"name":13,"@type":43,"position":53},"https://docshare.wps.com/document/country-private-sector-diagnostic-creating-markets-in-sri-lanka-private-sector-led-inclusive-growth-from-islands-of-excellence-july-2022/108650/",4,{"url":52,"name":13,"@type":55,"author":56,"headline":13,"publisher":58,"fileFormat":61,"inLanguage":24,"description":14,"dateModified":62,"datePublished":63,"encodingFormat":61,"isAccessibleForFree":64,"interactionStatistic":65},"DigitalDocument",{"name":9,"@type":57},"Person",{"url":41,"name":59,"@type":60},"DocShare","Organization","application/pdf","2026-07-29","2026-07-19",true,{"@type":66,"interactionType":67,"userInteractionCount":20},"InteractionCounter",{"@type":68},"ViewAction",{"@type":70,"mainEntity":71},"FAQPage",[72,78,82],{"name":73,"@type":74,"acceptedAnswer":75},"What is the main focus of this country diagnostic for Sri Lanka?","Question",{"text":76,"@type":77},"It assesses how Sri Lanka’s private sector has developed and what constraints and opportunities shape private sector-led inclusive growth.","Answer",{"name":79,"@type":74,"acceptedAnswer":80},"Which main constraint areas are highlighted for the private sector?",{"text":81,"@type":77},"The report emphasizes macroeconomic imbalances, distortionary and inconsistent policies with institutional complexity, protectionism and weak trade integration, and an investment climate that hampers most firms.",{"name":83,"@type":74,"acceptedAnswer":84},"What opportunities does the report propose to support Sri Lanka’s 21st-century trajectory?",{"text":85,"@type":77},"It recommends leveraging tourism for jobs in lagging regions and building “Islands of Excellence” across IT, specialized manufacturing, and agribusiness through strengthened innovation and enabling inputs.","https://schema.org",{"og:url":52,"og:type":88,"og:title":13,"og:site_name":59,"og:description":14},"article",{"robots":90,"canonical":52},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":93},[94,98,102,106,111,115,120,123,128,131,135],{"id":21,"doc_module":4,"doc_module_name":46,"category_name":95,"show_sort_weight":96,"slug":97},"Story & Novel",90,"story-novel",{"id":47,"doc_module":4,"doc_module_name":46,"category_name":99,"show_sort_weight":100,"slug":101},"Literature",80,"literature",{"id":53,"doc_module":4,"doc_module_name":46,"category_name":103,"show_sort_weight":104,"slug":105},"Exam",70,"exam",{"id":107,"doc_module":4,"doc_module_name":46,"category_name":108,"show_sort_weight":109,"slug":110},5,"Comic",60,"comic",{"id":20,"doc_module":4,"doc_module_name":46,"category_name":112,"show_sort_weight":113,"slug":114},"Technology",50,"technology",{"id":116,"doc_module":4,"doc_module_name":46,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":46,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":46,"category_name":125,"show_sort_weight":126,"slug":127},9,"Religion & Spirituality",20,"religion-spirituality",{"id":126,"doc_module":4,"doc_module_name":46,"category_name":129,"show_sort_weight":126,"slug":130},"World Cup","world-cup",{"id":132,"doc_module":4,"doc_module_name":46,"category_name":133,"show_sort_weight":132,"slug":134},10,"Lifestyle","lifestyle",{"id":136,"doc_module":4,"doc_module_name":46,"category_name":137,"show_sort_weight":107,"slug":138},19,"General","general"]