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Building Sri Lanka’s economic future through smarter cities

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Each year on November 8, planners around the world celebrate World Town Planning Day—a moment to reflect on how planning can build fairer, greener, and more prosperous societies. The 2025 theme, “With Planning We Can!”, reminds us that planning is not just about regulating land use—it is about shaping the destiny of nations.

In Sri Lanka, urbanization is one of the most powerful forces defining our development pathway. Yet, over the decades, urban growth has remained uneven—concentrated in a few regions while vast areas with great potential, from the North to the East and from Uva to the South, remain underdeveloped.

To achieve true national prosperity, Sri Lanka needs a comprehensive, balanced, and inclusive National Urban Development Policy—one that integrates all provinces, strengthens regional economies, and ensures that every city, town, and village contributes to a shared national vision.

Because with planning, we can build a future where every region matters.

Urbanization is often a mirror of economic transformation. Countries such as Singapore, South Korea, and Malaysia used planning-led urban growth to accelerate their economies. Sri Lanka, however, continues to experience slow and spatially fragmented urbanization.

While the official urbanization rate stands at around 19%, the reality is far more complex. When peri-urban and functionally urban regions are included, nearly half the population already lives in areas economically tied to cities. Yet much of this growth is unplanned—spreading linearly along roads and lacking efficient infrastructure.

This has resulted in congestion, high service delivery costs, and widening disparities between regions. Western Province, with 28% of the population, contributes nearly 44% of GDP. Meanwhile, provinces like the Northern, Eastern, and Uva—rich in resources and human potential—remain underutilized.

To correct this imbalance, Sri Lanka’s urbanization must be guided, strategic, and regionally balanced.

Sri Lanka’s settlement pattern is diverse. The country is composed of:

· Core Urban Populations – Residents of municipal and urban councils.

· Suburban and Fringe Settlements

– Areas around main cities with growing housing and employment links.

· Peri-Urban Populations

– People living on the edges of rural and urban zones, economically tied to nearby towns.

· Small and Emerging Growth Centers

– Towns that provide services to rural hinterlands but lack urban-scale infrastructure.

From Jaffna to Galle, Kandy to Trincomalee, and Kurunegala to Badulla—these settlement types coexist, but not always in coordination. A new approach must weave them together into a single national system of Functional Urban Areas (FUAs)—connected by economy, mobility, and governance.

Sri Lanka’s development challenge is not lack of talent or resources—it is unequal spatial development.

· Western Province dominates economically, yet faces congestion, high land costs, and overuse of infrastructure.

· Northern and Eastern Provinces

have vast land, skilled populations, and coastal trade potential, yet remain under-industrialized.

· Central and Uva Regions

possess rich natural and cultural assets that can drive sustainable tourism and agro-industries.

· Southern and North Western Regions

hold strong manufacturing and fisheries potential but require better connectivity.

Balanced national development means every province becomes part of the growth story. The future must not be a competition between regions, but a network of interconnected, complementary city regions—each contributing uniquely to Sri Lanka’s prosperity.

To manage growth wisely, Sri Lanka must adopt a structured, forward-looking framework. The National Urban Development Policy envisions a system of Livable Cities 2060, based on three guiding principles:

· Logical Urbanization – Guiding population and investment toward areas where infrastructure, employment, and services coexist efficiently.

· Functional Urban Areas (FUAs)

– Recognizing urban influence by function, not administrative limits.

· Livable Cities 2060

– Compact, green, inclusive, and resilient urban regions ensuring quality of life for all.

Vision: Livable Cities 2060

By 2060, Sri Lanka will feature a balanced network of compact, climate-ready, and well-connected urban regions that support equitable economic growth and a high standard of living.

Key Targets:

· 60% of population in official urban areas by 2060

· Less than 20% of land urbanized

· 30% reduction in commuting time by 2045

· 80% of residents within 800m of public transport by 2050

· Net-zero municipal emissions by 2060

Ten Strategic Pillars

· Urban Space

– Compact land use, vertical development, and function-based city classification.

· Urban Population

– Skilled, inclusive, and civically active communities.

· Urban Lands

– Urban land banks, zoning reform, and land value capture.

· Urban Economy

– Industrial diversification, regional innovation hubs, and SME promotion.

· Urban Food Security

– Protect peri-urban agriculture and encourage local food systems.

· Urban Housing

– Affordable, disaster-resilient, mixed-income housing integrated with transit.

· Urban Safety

– Climate-resilient, crime-free, and disaster-ready cities.

· Urban Mobility

– Smart transport, rail integration, and non-motorized connectivity.

· Urban Environment

– Blue–green networks, circular economy, and renewable energy.

· Planning & Governance

– Evidence-based decision-making, institutional reform with favorable laws, and professional capacity building.

Island wide Transformative Impact

If implemented consistently, this policy can deliver:

· Reduced regional disparities through balanced investment

· Economic diversification

across all provinces

· Efficient urban infrastructure

and reduced congestion

· Climate-smart cities

ready for future challenges

· Empowered local governments

and professional planning systems

· Higher national productivity

through spatial efficiency

As we commemorate World Town Planning Day 2025, Sri Lanka stands at a turning point. The next phase of national growth must be planned, inclusive, and regionally balanced.

From Colombo to Jaffna, from Kandy to Batticaloa, from Galle to Anuradhapura—each region has a vital role to play in shaping our collective future.

A well-crafted National Urban Development Policy can bridge regional divides, modernize our cities, and ensure prosperity reaches every community.

Because ultimately, with planning, we can build one Sri Lanka—united in vision, diverse in strength, and equal in opportunity.

By Y. A. G. K. Gunathilake
President Elect, ITPSL
Director, Western Province, Urban Development Authority



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Rs. 1 million fine proposed on substandard plastic producers

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Dr. Ravindra Kariyawasam

The government’s proposal to raise fines on manufacturers of substandard plastic products to as much as Rs. 1 million is expected to trigger a major compliance shift within Sri Lanka’s plastics industry, correcting long-standing market distortions caused by weak enforcement.

Environment Deputy Minister Anton Jayakody said the move targets producers who continue to bypass approved standards, undercutting compliant manufacturers and exacerbating environmental damage.

Environment Ministry Advisor Dr. Ravindra Kariyawasam said the initiative represents a structural market correction rather than a purely environmental intervention.

“Non-compliant producers have enjoyed an artificial cost advantage for years, distorting pricing and discouraging legitimate investment,” Kariyawasam told The Island Financial Review. “Meaningful penalties are essential to restore fairness and industry discipline.”

He said the widespread circulation of low-grade plastic products has eroded consumer confidence and delayed the sector’s transition towards higher-value and sustainable manufacturing.

Industry analysts note that a Rs. 1 million fine would significantly alter risk calculations for marginal operators, forcing upgrades in machinery, testing and compliance or pushing weaker players out of the market.

Kariyawasam stressed that the policy is intended to support responsible businesses rather than suppress industry growth.

“Manufacturers investing in recycling, biodegradable alternatives and quality assurance should not be penalised by competing with environmentally damaging, low-cost products,” he said.

The Deputy Minister indicated that tighter enforcement will be paired with policy support for sustainable packaging and circular-economy initiatives, aligning the sector with emerging global trade and environmental standards.

From a business perspective, the proposed regulation is likely to impact pricing, supply chains and capital investment decisions, while improving the long-term credibility of Sri Lanka’s plastics industry in both domestic and export markets.

By Ifham Nizam

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First Capital to unveil Sri Lanka’s Economic Outlook and Investment Strategies for 2026

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First Capital Holdings PLC (the Group), a subsidiary of JXG (Janashakthi Group) and a pioneering force in Sri Lanka’s investment landscape, is set to host the 12th edition of its renowned ‘First Capital Investor Symposium’ on 22 January 2026 at Cinnamon Life Colombo, starting from 5.30 pm onwards.

The 12th Edition will focus on Sri Lanka’s Economic Outlook for 2026, offering attendees a comprehensive analysis of market forecasts, investment strategies and emerging opportunities in the capital markets. The symposium serves as a crucial gathering for investors seeking insights to navigate the evolving economic landscape and make sound, strategic decisions.

As a leading investment institution, First Capital remains committed to promoting informed decision-making through comprehensive research and market analysis. By hosting this annual symposium, the organisation reinforces its role as a trusted partner in Sri Lanka’s capital markets, providing a premier platform for investors, professionals, and industry leaders to exchange knowledge, explore opportunities and build meaningful connections.

A key highlight of this year’s agenda will be First Capital’s presentation on the Economic and Investment Outlook, outlining market conditions and investment strategies for the period ahead. The presentation will be delivered by Ranjan Ranatunga, Assistant Vice President – Research of First Capital Holdings PLC.

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Rivers, Rights, Resilience Forum 2026 begins in Colombo

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Oxfam in Asia commenced the Rivers, Rights, Resilience Forum (RRRF) 2026, a three-day regional forum bringing together water experts, policymakers, civil society, researchers, and community leaders from across South Asia and beyond to strengthen cooperation on shared river systems and climate resilience.

The Forum is part of the Transboundary Rivers of South Asia (TROSA) programme, supported by the Government of Sweden, which works on the Ganges–Brahmaputra–Meghna (GBM) river basins, while also encouraging cross-basin learning at the regional and global levels. This year’s theme is “Building Resilient Communities and Ecosystems.” The Forum is co-organised by Oxfam in Asia and Dev Pro, Sri Lanka.

The forum opened with a welcome address by John Samuel, Regional Director, Oxfam in Asia, who highlighted the deep connection between rivers, politics, climate change, and sustainability. He underlined how rivers shape both environmental and social outcomes across South Asia and called for stronger collaboration between governments and civil society.

“Today building resilience is important in terms of climate and politics, and when civic space is shrinking, we should all work in solidarity,” he said.

Speaking at the Forum, Chamindry Saparamadu, Executive Director of DevPro shared examples of how communities in Sri Lanka have taken actions to ensure equitable access to water resources through catchment protection initiatives, community-based water societies etc. She further highlighted that learning exchanges would be useful to further strengthen inter-provincial water governance in Sri Lanka.

The Chief Guest, Syeda Rizwana Hasan, Advisor, Ministry of Environment, Forest and Climate Change and Ministry of Water Resources, Bangladesh, in her video message, emphasised the need for regional cooperation among South Asian countries beyond the upstream–downstream identity.

“Climate change will make water scarce, so South Asian countries have to come together to work on the common interest of their communities. Rivers are not just ecology but economics as well for communities. Forums like this help us to share our experience and learn from each other,” she said.

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