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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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Super El Niño threatens to deepen Sri Lanka’s drought and economic woes

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By Ifham Nizam

A potentially dangerous El Niño is gathering strength across the Pacific, with the World Meteorological Organization (WMO) warning that the climate event is expected to become very strong and continue into February 2027, raising the risks of drought, floods, extreme heat and major disruptions to rainfall patterns worldwide.

The warning has particular significance for Sri Lanka, where communities in several agricultural districts are already facing severe drought, depleted water sources and shrinking farm incomes.

The WMO said yesterday that forecasts from its Global Producing Centres show an “exceptionally high likelihood of nearly 100%” that El Niño will persist through February next year. The organisation said this is the first time one of its El Niño/La Niña updates has been so unequivocal, reflecting strong agreement among forecasting systems.

The event, driven by exceptionally warm waters in the tropical Pacific, is expected to strengthen further in the coming months, reach very strong intensity and peak towards the end of this year. Its climate impacts, however, are expected to continue well into 2027.

According to Meteorological Organization

Sri Lanka is already experiencing the consequences.

A Reuters report published on Wednesday from drought-affected areas said rainfall deficits of between 85% and 100% have been recorded in important farming regions including Ampara and Monaragala.

Wells, tanks, rivers and lakes have dried up, while tens of thousands of people are depending on government water deliveries, with some remote communities reportedly waiting up to 23 days for supplies.

The drought is also rapidly becoming an economic problem for rural communities. Croplands have withered, livestock operations have been affected and farmers who have lost their harvests are being forced to seek daily-paid employment to survive.

The latest WMO outlook also warns that the consequences of El Niño will not necessarily be uniform. The severity and timing of impacts in individual countries depend on geography, season and other climate drivers, including conditions in the Indian and Atlantic oceans.

For Sri Lanka, the Indian Ocean Dipole (IOD) will therefore be crucial. The WMO expects a positive IOD to develop, with a September-November seasonal mean of about 0.9°C. This could modify the normal influence of El Niño on rainfall over the region.

That creates another potential risk for Sri Lanka: the country may have to prepare not only for continued drought but also for episodes of intense rainfall, flooding and landslides later in the year. Climate variability increasingly means that a prolonged water shortage can be followed by sudden and destructive rainfall rather than a gradual return to normal conditions.

For Sri Lanka, the warning should therefore be viewed as an economic and national-planning issue, not simply a meteorological forecast. Agriculture, drinking water, electricity generation, food imports, public expenditure and rural livelihoods could all be affected.

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ABC Trade & Investment – All-China Environment Federation partner to drive Sri Lanka’s green infrastructure and investment

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ABC Trade & Investments (Pvt) Ltd, a leading homegrown conglomerate in Sri Lanka’s ICT distribution and diversified business landscape, has formally entered into a strategic Memorandum of Understanding (MoU) with the All-China Environment Federation (ACEF). The partnership establishes a collaborative framework aimed at accelerating new-energy development, water management, and environmental protection projects across Sri Lanka.

The agreement bridges advanced Chinese engineering capabilities, equipment, technical expertise, and investment resources with ABC Trade & Investments’ local operational strength, market insight, and project implementation skills. By pairing international technology with on-the-ground execution, the initiative is designed to address Sri Lanka’s long-term environmental and civil infrastructure priorities.

The MoU was signed by Amalrajah Jayaseelan, Director/CEO of ABC Trade & Investment (Pvt) Ltd, and Shi Xiang, Secretary-General of the Belt & Road Eco-Industry Cooperation Working Committee of ACEF. The signing took place during the China–Sri Lanka Environmental & Energy Exchange and Cooperation Meeting at the Nondescripts Cricket Club Grounds in Colombo, held under the theme “Empower Green Development, Jointly Build a New Pattern of China–Sri Lanka Environmental & Energy Industry.”

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Heavy buying interest slows down stock trading

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By Hiran H. Senewiratne

The CSE yesterday was very active at the outset but later slowed down due to heavy buying interest noted for select stocks.Amid those developments both indices moved upwards. The S and P SL20 went up by 23.73 points. Turnover stood at Rs 2.44 billion with 10 crossings.

The crossings were: Renuka Foods 19 million shares crossed for Rs 502 million; its shares traded at Rs 25.30, Dipped Products 1.9 million shares crossed to the tune of Rs 117 million; its shares traded at Rs 60.50, JKH 3.9 million shares crossed for Rs 78 million; its shares sold at Rs 19.70, Dialog Axiata 1 million shares crossed to the tune of Rs 46.6 million; its shares traded at Rs 46.40, Tokyo Cement 500,000 shares crossed for Rs 39.5 million; its shares sold at Rs 79 and Watawela Plantations 800,000 shares crossed for Rs 34 million; its shares were Rs 42.50 each.

In the retail market companies that mainly contributed to the turnover were; Vallibel Finance Rs 281 million (3.3 million shares traded), Dipped Products Rs 114 million (1.9 million shares traded), Haycarb Rs 90 million (424,000 shares traded), Alumax Rs 42 million (2.6 million shares traded), HNB Rs 38.5 million (102,000 shares traded), Swisstec Rs 30 million (506,000 shares traded) and Sierra Cables Rs 34 million (880,000 shares traded). During the day 118 million share volumes changed hands in 17802 transactions.

It is said that mixed market reactions were noted during the day. Financial sector, especially Vallibel Finance, performed well, while the manufacturing sector, especially JKH and Hayleys , performed significantly.

Meanwhile, Co-operative Insurance Company announced the redemption of 1,100,000 cumulative redeemable preference shares issued in December 2020 to the Health Department Co-Operative Thrift & Credit Society.

The total redemption consideration of Rs 16.61 million, including a 9 percent per annum cumulative dividend, is set for settlement on August 31, 2026.

Yesterday the rupee was quoted at Rs 328.25/35 to the US dollar in the spot market, stronger from Rs 328.30/60 the previous day, while bond yields were somewhat steady, dealers said.

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