Sector: ICT Total Cost: $500,000 Status: Completed
The four participating countries – Bangladesh, Bhutan, India and Nepal – of the South Asia Subregional Economic Cooperation program agreed on the project design of the SASEC Information Highway to promote better ICT connectivity and closer...
Sector: Transport Management Total Cost: $960,000 Status: Completed
This project enhanced interregional integration by increasing trade and travel among BIMSTEC South Asian countries – Bangladesh, Bhutan, India, Nepal, and Sri Lanka. It helped develop policy to address barriers in effective and efficient trade...
Sector: Energy Total Cost: $750,000 Status: Completed
This technical assistance prepared a proposal for a South Asia Association for Regional Cooperation (SAARC) regional power exchange to facilitate regional development of the power market and enhance power trading among SAARC member countries. It...
Sector: Multisector Total Cost: $4.72 Million Status: Ongoing
This project will enhance regional economic cooperation in South Asia through agreed regional cooperation projects and activities. It will assist participating countries to prioritize and prepare regional projects, create venues for regional exchange...
Sector: Public Sector Management Total Cost: $700,000 Status: Completed
This technical assistance strengthened knowledge-based collaboration among South Asian policymakers, researchers, and private sector investors in four research areas significant to regional cooperation. The Research and Information System for...
Sri Lanka became a full member of SASEC in May 2014, together with Maldives, following several years as an active observer. Bangladesh, Bhutan, India, and Nepal formed the project-based partnership in 2001.
Sri Lanka is working toward achieving a people-oriented and open socio-economic system that is focused on providing a decent quality of life for all. The report Sustainable Sri Lanka 2030 Vision and Strategic Path outlines Sri Lanka's aim to become a sustainable, upper middle income, Indian Ocean hub, with a prosperous, competitive, and advanced economy, an environment that is green and flourishing, and a society that is inclusive, harmonious, peaceful and just, through a balanced inclusive green growth (BIGG) approach. The report also highlights the country's aim to maximize its geostrategic potential to serve as an emerging transshipment and logistics hub as well as a commercial hub connecting different regions.
SASEC Projects in Sri Lanka
Since 2002, Sri Lanka has actively participated—as an observer, and then as a full member—in SASEC regional cooperation forums, knowledge-sharing activities, and capacity building. An ADB-supported project (worth $702.93 million) will help construct an elevated port access highway with related facilities, in line with SASEC operational priorities for transport. Four technical assistance projects (worth $3.48 million) support Sri Lanka’s energy and transport sectors.
Direction of Intra-regional Trade
The value of Sri Lanka's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2020, is captured in the tables below.
India is Sri Lanka's number 2 import source worldwide, with imported goods valued at over $3.9 billion.
India ranks 2nd as Sri Lanka's top export destination, with exported goods from Sri Lanka valued at $671 million.
Sri Lanka Trade - ImportSource: IMF Direction of Trade Statistics, as of October 2020
Sri Lanka Trade - ExportSource: IMF Direction of Trade Statistics, as of October 2020
Logistics Performance Index (LPI)
After garnering 2.7 in 2014, Sri Lanka posted an overall LPI score of 2.6 in 2018, ahead of the 2018 South Asia regional average score of 2.51. This brings the country at rank 94 out of 168 economies for 2018, compared to 89 for 2014. Sri Lanka's best scores come from tracking and tracing (2.79), timeliness (2.79), and customs (2.58).
Source: World Bank LPI (accessed December 2018)
Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.
Sri Lanka growth is forecast to slow to 2.4% in fiscal year (FY) 2022, constrained by low foreign exchange reserves and double-digit inflation. GDP is projected to pick up to 2.5% in FY2023, assuming the population overcomes its hesitancy in getting COVID-19 booster doses. Recovery of the tourism sector and the global economy is expected to support activity in FY2022 and FY2023. The country faces a major policy challenge as it prepares for its aging population.Source: Asian Development Outlook 2022 (ADB)
Real GDP in Sri Lanka is estimated to recover to 3.3% in 2021, with downside risks related to import restrictions, an ongoing fuel crisis, and potentially higher food prices. A rise in coronavirus (COVID-19) infections slowed recovery in the second half of 2021. Sri Lanka needs to continue its successful vaccination program, monitor vulnerabilities in the financial sector, and support students recovering from time lost to the COVID-19 pandemic to help ensure long-term growth.Source: South Asia Economic Focus, Fall 2021 (WB)