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The Political Economy of Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka

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Better Policies for Better Diets:

IPS Policy Insights

Non-communicable diseases (NCDs) have posed a critical health challenge for Sri Lanka for several decades. Estimated to account for 83 per cent of all deaths in Sri Lanka today, NCDs have serious health and economic consequences for both individuals and the country.1 In 2000 and 2010, the deaths that occurred due to NCDs were estimated as 74 and 76 per cent of the total deaths respectively.2 Unhealthy dietary patterns are one of the main behavioural causes for escalating NCD incidences.3 While 72.5 per cent of the Sri Lankan population eat less than five servings of fruit and/or vegetables on average per day4 only 26.9 per cent of the males and 28.0 per cent of the females consume five or more servings of fruits and/or vegetables per day.5 Further, 26.5 per cent of school children aged 13-17 years reported that they consumed a carbonated soft drink at least once per day.6 This shows how unhealthy dietary patterns are followed in Sri Lanka every day.

Political Economy and NCDs

Fiscal interventions are crucial to correct market failures, create incentives to reduce dietary risk factors for NCDs, and generate government revenue.7 Fiscal policies and regulations are implemented within complex country-specific systems. They are influenced by several contextual factors such as social norms and acceptances, stakeholders, their interests and influences, resource implications, equity and human rights, and feasibility. These factors are collectively recognised as the political economy. A country’s political economy greatly influences policy development, implementation, and realisation. A proper understanding of the political economy can help formulate better policies to meet the NCD challenge and create a healthy food environment.

Sri Lanka has introduced various measures including fiscal policies and regulations to promote healthy dietary patterns. The main objective of this policy brief is to highlight how the political economy of the food environment in the country influences the development of policies on healthy diets. The following findings are based on a political economy analysis conducted by the Institute of Policy Studies of Sri Lanka (IPS) as a part of the study on ‘Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka’. The study examines the following aspects:

Policy framing – recognition of the main policy issue (underlying assumptions, perceptions, and concepts);

Policy contents – recognition of key policy elements; and Policy development – actors, stakeholders, and their interests.

The findings and recommendations are based on a review of policies introduced from the year 2000 onwards.

Key Findings

Policy Framing

Commendably NCDs, nutrition, and the food environment are recognised as important policy issues and framed well in the policy documents prepared by the health sector, mainly by the Ministry of Health.

Policy Contents

Healthy food consumption, production of healthy foods, social marketing and health promotion campaigns, nutrition labelling, nutrition education and retail sales of healthy food are the areas covered relatively well in the policy documents reviewed. However, many of the policy documents do not devote adequate attention to some crucial aspects such as funding sources, governance, gender sensitivity, and stakeholder identification. For example, the National Health Strategic Master Plan 2016-2025 Preventive Services Programme – Food Safety states, “The government of Sri Lanka will take over the responsibility in terms of finances and resource allocation to improve the food safety” as an assumption.8 But it does not either explain or present the financial sources and mechanisms to be used for this purpose. Likewise, in most policy documents, there is no explicit commitment to adopt fiscal measures to achieve the targets specified in those respective policies.

Policy Development

The Ministry of Health plays a central role in developing policies to reduce NCDs, promote healthy diets, and establish a safer food environment in Sri Lanka. Apart from the Ministry of Health, the Ministry of Agriculture has also demonstrated its interest in nutrition and the food environment. Production of healthy foods, marketing and trading, and nutrition education are some of the key areas covered in the policy documents of the agriculture sector. Other than these two ministries, other public sectors have not indicated any noticeable interest in NCDs, nutrition or the food environment.

Additionally, international development partners such as the World Health Organization (WHO), United Nations Children Fund (UNICEF), United Nations Population Fund (UNFPA), World Food Programme (WFP), and the World Bank (WB) are important stakeholders playing a supportive role in upgrading the nutrition status and food environment and addressing NCDs-related issues.

Recommendations

Continue to focus on policy framing and cover crucial policy elements:

The recognition and attention given to NCDs, nutrition and the food environment are progressive steps that need continuation. This is particularly important given the current NCD burden in Sri Lanka and the increasing trend of NCD-related morbidities and mortalities. However, the review of the policy documents revealed the lack of comprehensive coverage of important policy elements where some of the crucial aspects like governance structures, funding sources, and gender sensitivity are not adequately addressed.

It is essential to comprehensively confer due recognition to all the crucial aspects to implement the policies effectively and to achieve desired outcomes. For example, identifying governance structures is important for the effective implementation of policies. It also indicates the country’s commitment and responsiveness in addressing the issues identified in the policies. Likewise, it is necessary to identify funding sources to implement the proposed actions. No matter how well developed a policy is, it will not achieve its intended impact if the resources to implement the policy are not available.

Proactively seek the active
participation of all stakeholders
in policy development:

The efforts of the health sector (i.e., Ministry of Health) to develop policies on NCDs, nutrition and the food environment are commendable. Yet, the lack of involvement and interest by other sectors is a huge deterrent to achieving the expected outcomes of policies aimed at promoting healthy diets in Sri Lanka. Currently, these issues are regarded as “health issues” and other sectors/ministries either do not adequately recognise or completely ignore these concerns when they formulate policies for their respective sectors. The food environment, nutrition and NCDs are complex and interconnected issues.

Thus, policies that intend to address these issues must take a more holistic approach actively involving all the parties concerned. Further, the involvement of the highest level of the government such as the National Nutrition Council chaired by the President is recommended to lead and coordinate these processes, thereby assuring the highest level of political will and commitment.

This policy insight was prepared by IPS researcher Sunimalee Madurawala (sunimalee@ips.lk) based on findings from a study on ‘Fiscal Policies and Regulations to Promote Healthy Diets in Sri Lanka’ funded by the International Development Research Centre (IDRC), Canada. For more policy insights from IPS, visit: https://www.ips.lk/publications/policy-insights/.



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European Union has a favorable perspective on the current GSP+ review process.- Charles Whiteley

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The Head of South Asia Division, European External Action Service of the European Union Charles Whiteley stated that the European Union has a favorable perspective on the current GSP+ review process.

He made these remarks during a meeting held today (30) at the Presidential Secretariat with President Anura Kumara Disanayake, as part of an official visit by a European Union delegation to Sri Lanka.

Mr. Whiteley highlighted the longstanding partnership between Sri Lanka and the EU, which has led to significant trade gains. He affirmed the EU’s willingness to continue supporting Sri Lanka in achieving further commercial progress.

He stated that the GSP+ concessions from the European Union are anticipated to encourage Sri Lanka to provide products that meet standardized quality requirements. He further said that the continuation of GSP+ trade concession is assessed on alignment with the current government’s policy commitments and progress.

The meeting assessed Sri Lanka’s advancements in executing 27 international conventions related to the European Union’s GSP+ tax concession, known as the Generalized System of Preferences.

President Disanayake expressed his gratitude for the EU’s assistance during Sri Lanka’s economic crisis. He acknowledged that the GSP+ facility has played an important role in supporting the country’s export sector and economic recovery.

The President further noted that the collapse of Sri Lanka’s economy was the result of a deeply flawed political system, marked by corruption and mismanagement. The President stated that the current administration is working to rebuild the country through stable and transparent governance, though this transformation will require time.

Highlighting a key shift in political support, the President pointed out that unlike previous governments, which relied heavily on support from the South, the current administration was elected with the collective support of Sinhala, Tamil and Muslim communities from across the country. The President reaffirmed his government’s commitment to delivering on the promises made to all citizens.

Also present at the meeting were Minister of Labour, Deputy Minister of Economic Development Dr. Anil Jayantha Fernando, Minister of Justice and National Integration Harshana Nanayakkara, Attorney-at-law, Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma , Senior Additional Secretary to the President Roshan Gamage, the Ambassador designate of the European Union to Sri Lanka and the Maldives . Carmen Moreno, General for Trade and Economic Security – Policy Officer of the European Commission’s Directorate Guido Dolara, Desk Officer for Sri Lanka at European External Action Service Ms. Galija Agisheva along with other EU and Sri Lankan officials.

[PMD]

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CBSL presents Financial Statements and Operations Report 2024 to President

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The Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe, officially handed over the Financial Statements and Operations Report 2024 of the Central Bank of Sri Lanka to President Anura Kumara Disanayake at the Presidential Secretariat on Tuesday (29).

A copy of the report was also presented to Secretary to the President Dr. Nandika Sanath Kumanayake.

Several senior officials from the Central Bank were present at the occasion.

 

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HNB Investment Bank promotes Hayleys’ Rs. 7 billion debenture issue as Joint Placement Agent

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Hayleys PLC, one of Sri Lanka’s foremost diversified conglomerates, has announced its plans to raise up to Rs. 7 billion through a debenture issue, marking one of the largest corporate debt offerings scheduled for Q2 2025. This strategic initiative has received in-principle approval from the Colombo Stock Exchange.

At the core of this transaction, HNB Investment Bank (HNBIB) plays a leading role as Joint Placement Agent to the issue, alongside Commercial Bank of Ceylon PLC. Renowned for its bespoke financial solutions and strong track record in capital market transactions, HNBIB’s involvement is pivotal to the success of this offering, reaffirming its expertise in structuring and placing sophisticated debt instruments, most recently demonstrated by way of being the exclusive manager for the country’s first-ever high-yield bond issuance earlier this year.

Hayleys’ initial tranche will offer 50 million listed, rated, unsecured, senior, redeemable five-year debentures priced at Rs. 100 each, aiming to raise Rs. 5 billion. In the event of oversubscription, the company retains the flexibility to issue an additional 20 million debentures, increasing the total potential value to Rs. 7 billion. The funds raised are intended to further optimize Hayleys’ capital structure, underlining the company’s forward-looking financial strategy.

The subscription list for the debentures will officially open on 5th May 2025.

Backed by a strong AAA (Lka) rating from Fitch Ratings Lanka Limited and senior status, the securities offer a compelling investment opportunity, combining stability with the potential for attractive returns.

As Hayleys PLC gears up for this significant fundraising exercise, the selection of HNB Investment Bank as a trusted partner, reinforces confidence in the success of the offering, once again highlighting its role in delivering value for issuers and investors alike.

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