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Understanding what GSP+ means for Sri Lanka:

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11 months ago

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By now, the term GSP+ has become almost a household word in Sri Lanka. As the European Union’s GSP scheme’s current cycle is set to expire by the end of 2023 and the new cycle for the next ten years (2024–2033) is about to begin, Naveera Perera, the Research and Publications Manager (Internal) of the Moot Court Bench International Trade Law Program, interviews Gomi Senadhira, an expert in International Trade Policy who, among other key roles, has held the positions of, Director General of Commerce of Sri Lanka, Sri Lanka’s Permanent Representative of the World Trade Organisation (2004-2006), the Chair of the WTO Committee on Trade and Development (2005), Minister of Commercial and Economic Affairs at the Sri Lanka Mission to the European Commission in Brussels (2001-2004), and the Commonwealth Senior Advisor for Trade Policy and Negotiations to the Government of the Seychelles (2013-2015), to discuss what GSP and GSP+ are and has subsequently meant for Sri Lanka. This article was originally published on Moot Court Bench International Trade Law Program Website

Compiled by Naveera Perera

Q: What does the term ‘GSP’ mean?

A: “GSP” is an abbreviation of “Generalised System of Preferences”. It is one of the most important tools in global trade policy to support the economic development of developing countries through international trade. However, to understand what it really means and its legal status, it is necessary to understand another important international trade term: MFN, the Most Favoured Nation principle. The MFN is the most important principle in multilateral trade law, as embodied in Article 1.1 of the General Agreement on Tariffs and Trade (GATT). It requires all members of the GATT (now the WTO) to be treated in the same manner in terms of market access. In other words, the best tariffs or non-tariff conditions extended by any member of the GATT to any other country have to be automatically and unconditionally extended to every other member of the GATT. The only possible exceptions are Free Trade Agreements, which are covered under Article XXIV of the GATT. Thus, even if a developed country wanted to give trade/tariff concessions to a developing country, it was not possible to do so without extending it to all other members of the GATT.

At the time when GATT was negotiated, a few preferential systems existed between developed and developing countries. These included, among others, the Commonwealth preferences and preferential trade arrangements between France and her former colonies. Therefore, attempts were made to find a way to use preferential trade as a tool of international development policy at the United Nations. This was deliberated at the first session of the United Nations Conference on Trade and Development (UNCTAD I) in 1964. Then in 1968, the second session of UNCTAD adopted a resolution to establish a system of generalised, nonreciprocal and non-discriminatory preferential tariffs system in favour of developing countries. This is what is known as the Generalised System of Preferences (GSP).

Subsequently, the necessary legal cover was provided by the GATT: first through a temporary waiver for GSP from Article 1 obligation and then the Enabling Clause (which became an integral part of the GATT). Under these decisions, “Notwithstanding the MFN obligation under Article 1.1, developed countries can extend developing countries more preferential tariffs in a generalised, nonreciprocal and non-discriminatory manner”. With the approval of these waivers, developed countries could establish autonomous GSP schemes, according to its own regulations, whilst staying true to its basic principles, that is, “preferential tariffs for developing countries in a generalised, nonreciprocal and non-discriminatory manner”.

Q: How does GSP relate to EU-Sri Lanka Trade Relations?

A: The first to launch a GSP scheme was EEC (EU). When this was done in 1971, it was extended to all developing countries in a generalised, nonreciprocal, and non-discriminatory manner. However, the EEC also continued with the trade preferences for some of their former colonies in Africa, the Caribbean, and the Pacific (ACP preferences). The ACP preferences included broader product coverage and deeper preference margins (mostly duty-free) than what was provided under the GSP preferences. The Asian and Latin American (former) colonies were left out of this enhanced preferential arrangement. So, from the very beginning, Sri Lanka and other Asian developing countries were not getting MFN in the European market.

Q: Then why didn’t Sri Lanka and/or other Asian countries challenge that in the GATT?

A: To challenge that, Sri Lanka had to go against not only the EEC but also against other developing countries. That was the early stages of the Non-Alignment Movement and the Group of 77 (G77). Perhaps, at that stage, the cohesiveness of developing countries was much more important to us than market access, particularly because Sri Lanka’s development policies at the time were not export-oriented. We were inward-looking, concentrating more on import substitution. Possibly due to these reasons, Sri Lanka did not make much effort to obtain ACP-like preferences in the European Market. Instead, we were more focused on becoming the leaders of the G77 and the Non-Alignment Movement.

On the other hand, Andean, and Central American Countries (some of these countries are also loosely called “Banana Republics”) started lobbying at every possible point for ACP-like preferences in the European market. We do not have much literature on this, but available reports show the intensity of their lobbying. For example, during the official tour of these countries by Mrs. Rosalynn Carter, the US First Lady, in 1977, the main message the Presidents of Costa Rica and Colombia wanted her to take back to the US president on their behalf was to gain his assistance in getting ACP-type preferential market access to the EEC whilst receiving a similar arrangement for them in the US market.

After 10 years of consistent lobbying by Andean and Central American Countries, in 1990, the EU came up with a bizarre kind of GSP arrangement called “GSP Drugs” or the GSP “Special arrangements to combat drugs production and trafficking”. This facility was extended only to the Andean and Central American Countries. Some of these countries were among the top coca-producing countries in the world. Most of them exported bananas, cut flowers and other tropical products. The concessions under “GSP Drugs” were very similar to the concessions under ACP and provided duty-free treatment for most of the products. Only a few items, like bananas, were left out.

In the early 1990s, Sri Lanka and the Asian Group took this up at UNCTAD very strongly. We argued that “GSP Drugs” violates the non-discrimination principle of the GSP and pointed out that it should be either aborted or extended to all preference-receiving countries. The EEC defended it under the Enabling Clause. Though the EEC position was incorrect, no one wanted to challenge this in the GATT dispute settlement system, as it was weak and expensive, and the decisions were not effectively enforceable.

A few years later, in 1999, the EU introduced two other special GSP arrangements. These were; GSP Labour and GSP Environment. Additional tariff concessions were available under these arrangements, and these were open to all beneficiary countries under certain conditions. Subsequently, the EC introduced another GSP arrangement specifically for Least Developed Countries (LDCs) called “Everything But Arms (EBA)”. In addition to that, the EU also had developed a few other trade arrangements, like Euro-Med Agreements, under which some developing countries received deeper preferential tariffs.

Q: What other countries in South Asia raised similar concerns? Did any one of them succeed in getting ACP-like preferences?

A: Bangladesh, Nepal, the Maldives, and Bhutan received duty-free access to the EU market under EBA. Then after 9/11, the EU extended “GSP Drugs” to Pakistan. So overnight, Pakistan also got duty-free market access to the EU. Though India didn’t get ACP- like preferences, it was the second largest beneficiary (after China) of the GSP arrangements. Sri Lanka could not even fully benefit from GSP general arrangement due to very strict and complex “Rules of Origin” requirements, and Sri Lanka’s GSP utilisation ratio was below 50%. As a result, at the beginning of this century, Sri Lanka was seriously marginalised in the EU market and was paying the highest average tariff rate.

Q: You mentioned that Sri Lanka held a strong position against the Commission, arguing that we were being discriminated against. Could you elaborate on that?

A: To give you some context, in the year 2000, the WTO appointed a group of “Eight Wise Men” to study and clarify the challenges the multilateral trading system faced. This group was chaired by Peter Sutherland, the first WTO Director General and the former Commissioner of the European Commission in charge of Competition Policy and consisted of very eminent people (one of the eight men was John Howard Jackson – the John H Jackson Moot Court Competition is named after him).  This committee submitted a report (‘The Future of the WTO,’ published in 2004) where they noted:

“At the heart of GATT was the principle of non-discrimination characterised by the MFN clause and the national treatment provisions principally embodied in Article 1. The MFN Clause was regarded as the central organising rule of GATT and the world trading system of rules it constituted [para 58] …. Yet, nearly five decades after the founding of GATT, MFN is no longer the rule; it is almost the exception… Certainly, the term might now be better defined as LFN, a Least Favoured-Nation treatment [para 60] …. This is best illustrated by reference to the EU, which now has the MFN tariff fully applicable to only nine trading partners, albeit including the US and Japan. All other trading partners are granted concessional market access under Article XXIV, the Enabling Clause, GSP schemes, “Everything but Arms”, and other relationships [para 74].

Around the same time, the discrimination Sri Lanka faced in the EU market was highlighted in a research undertaken by Oxfam/UK (‘Running into Sand’, published in 2003 by Oxfam). On page 28, they noted: “The available evidence suggests that the EU’s Common External Tariff (CET) is fundamentally anti-poor. Here too, the principle of perverse graduation applies. In Britain, tax rates on imports of goods from India are around four times higher than for the USA, rising to over eight times higher for countries such as Sri Lanka and Uruguay.”

While the above publications proved a point in favour of Sri Lanka’s claims, before these studies were published, the Sri Lanka Mission to the EC in Brussels directly took it up with the Commission in 2002. Our arguments were based on our own studies.

Perhaps, 2002 also marked the start of a new chapter in EU-Sri Lanka trade relations. The South Asia division in the Commission’s Trade Directorate was only established that year. Prior to that, South Asia and South America were handled by the same section. Within that section, South America comparatively received more focus, barely providing much attention to “South Asia” as a region. India had a strong presence in Brussels and better access to the commission. So, on a one-on-one basis, India managed to negotiate her concerns with the EC. By then, India was the second largest beneficiary of the EU GSP Scheme. The South Asian LDCs managed access through the LDC track and, by 2001, had full duty-free market access to the EU under GSP-EBA. Pakistan also had received duty-free market access, purely due to political reasons, under “GSP Drugs”.

At the very first meeting we had with the new South Asia section, we made a strong representation of the marginalisation of Sri Lanka due to the EU’s discriminatory trade policies. Around the same time, then-Prime Minister Ranil Wickremesinghe visited Brussels and also took this up with the Commission. At the end of a prolonged process over a few months, the EC agreed to have a joint study through one of its think tanks and also funded it. The Joint study largely came with the same conclusions as our original study, although theirs was a bit watered down. While this was going on, the commission suggested that Sri Lanka apply for GSP Labour to get additional duty concessions. So, we went on to apply for it, and we were the first developing country to get the GSP Labour. However, even with the GSP Labour, we were very much marginalised in the EU due to GSP rules of origin, which were loaded against small countries like Sri Lanka.

Q: So, where does GSP Plus (GSP+) come in, and how is that different from the previous GSP scheme?

A: In December 2001, Thailand became the first country to start a case (EC – GSP Drugs) in the WTO dispute settlement system. They followed the relevant procedure, first requesting a consultation and a panel. However, the dispute did not progress beyond the consultation phase, and the panel was not established. Presumably, Thailand and the EU may have possibly come into an agreement during the consultation process and decided not to move forward with the case. This is not unusual within the WTO dispute settlement system.

After the GSP Drugs facility was extended to Pakistan, in March 2002 India challenged the EU GSP scheme at the WTO. India argued that the tariff preferences accorded by the EC under the special arrangements nullified or impaired the benefits accruing to India under the most favoured nation provisions of Article I:1 of the GATT and the relevant paragraphs of the Enabling Clause. The WTO Panel decision in December 2003 and the Appellate Body decision in April 2004 agreed with the main points of the Indian submission.

In fact, the WTO ruling on the India – EU GSP case confirmed what Sri Lanka has been advocating for more than ten years. That is, EU preferential arrangements nullified or impaired the benefits that should have accrued to Sri Lanka under the MFN provisions of the GATT and the relevant paragraphs in the Enabling Clause.

Subsequent to the WTO Appellate Body Decision, the EU launched a renewed GSP scheme in April 2005. The new scheme contained, instead of five arrangements of the previous scheme (General, “Drugs”, Labour, Environment, and EBA), only three arrangements. It continued with the general arrangement and EBA, but “Drugs”, Labour and Environment arrangements were combined to form a new arrangement called “GSP+”. The GSP+ introduced a few additional conditions. The potential beneficiaries of the arrangement were the beneficiary countries of the “GSP Drugs” arrangement (other than Pakistan) and the countries that were receiving GSP Labour or were in the final stages of qualifying for GSP Labour. Under the arrangement, subject to the Rules of Origin, the beneficiary countries received duty-free market access for most of their exports.

However, it is important to understand that the “GSP+” does not provide Sri Lanka with a major competitive advantage over most of our competitors, as they had similar or better access into the EU market under the arrangements like ACP, “GSP Drugs”, or EBA. It only offered Sri Lanka a level playing field in the European Market after thirty years of being denied something which was rightfully ours.

At the same time, it is also necessary to point out that the EU extended the GSP+ facility to Sri Lanka at a very crucial juncture of our trade relations. Prior to 2005, the tariffs did not impact much on our garment exports to the EU because those were covered by the quota arrangement. However, after 2005, it was different. The cheapest source secured the market, and 9% to 12% duty made a difference. So, after 2005, GSP+ helped our apparel exporters to remain competitive in the EU market.

Moreover, it is also necessary to point out that Sri Lanka’s GSP utilisation rate still remains relatively low, at 63%. In other words, only 63% of preference-eligible exports receive preferential tariffs, whereas 97% of preference-eligible exports from Pakistan and Bangladesh receive preferential tariffs. As a result, as illustrated in the GSP Hub portal of the European Commission, only 54% of Sri Lanka exports get preferential GSP tariffs (as against 86% for Pakistan and 97% for Bangladesh). That means even with the GSP+, nearly half of Sri Lanka’s exports are under the MFN (or what the Sutherland Report called LFN – Least Favoured-Nation) tariffs.

Q: Recently, there has been much contention about the European Parliament (EP) resolutions that have threatened the position of Sri Lanka and other countries’ participation within the GSP+ Scheme. What are your thoughts on that?

A: In June 2021, the European Parliament (EP) adopted a resolution urging the commission “….to use the GSP+ as a leverage to push for advancement on Sri Lanka’s human rights obligations and demand the repeal or replacement of the PTA, to carefully assess whether there is sufficient reason, as a last resort, to initiate a procedure for the temporary withdrawal of Sri Lanka’s GSP+ status….”. Before that, the EP had adopted similar resolutions on Pakistan and the Philippines.

After the EP adopted the resolution on Sri Lanka, to put things into perspective, I wrote an article to compare the resolution on Sri Lanka with the resolutions on the Philippines and Pakistan. In that article, I pointed out that the EP resolutions on Pakistan and the Philippines called on the Commission to take immediate action to withdraw the concessions, and interestingly, the language used in the resolution on Sri Lanka was milder.

Although the EP may pass a resolution, it should be noted that the enforcement of the resolution is the responsibility of the commission. When it came to Sri Lanka, it appears that the commission had opted for a more cautious approach. Take the case of the Philippines – the wording used in the resolution was more immediate, implying that no alternate form or tool could be used against the country. An important point in this respect is that, to date, no action has been taken. The Pakistan resolution was also similarly strongly worded, and yet nothing has happened. In contrast, in the case of Sri Lanka, GSP+ was said to be removed “as a last resort” if the government did not address the concerns raised on the PTA.

It is also necessary to emphasise that the use or misuse of the PTA directly and adversely impacts people in Sri Lanka. Similarly, the issues related to human rights or labour standards are matters that have a direct impact on the citizens of the country. Therefore, the people in this country are more interested than the Commission in solving such issues. If GSP+ is removed or not extended on the claim that human rights or labour standards are not enforced properly, the EU would only penalise them, the victims. As of now, the Commission has much more forceful tools at its disposal to penalise those who violate the basic rights of the people. Therefore, the withdrawal of the GSP+ status from Sri Lanka only is considered “a last resort” after exhausting all other options. Similarly, I believe the Commission would adopt a more cautious approach as it reviews the GSP Plus eligibility for the next cycle.


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Opinion

Boots on the ground,minds in the dark

Published

12 hours ago

on

2026/04/1

By

Confronting Sri Lanka’s Expanding Drug Threat

Senior security and intelligence professional with extensive experience in counter-terrorism, strategic risk assessment and law enforcement.

A Rising Tide Beneath the Surface

Sri Lanka’s recent success in intercepting large consignments of narcotics at sea is both reassuring and alarming. Reassuring, because it reflects the growing operational capability of the Sri Lanka Navy and the Police Narcotics Bureau. Alarming, because such volumes do not move without a market.

Are we merely intercepting supply, or are we ignoring a rapidly expanding demand within our own society?

· “If seizures are rising, it is not only a sign of enforcement success, it is also a signal of expanding demand.

“Boots on the Ground”: A New Meaning

In today’s Sri Lankan context, “boots on the ground” must be redefined. It is no longer limited to patrols at sea or coastal surveillance. It is about real presence intelligence-led, community-connected, and action-oriented.

Recent interdictions demonstrate a mature intelligence-to-action cycle. For this, the Sri Lanka Navy and Police deserve commendation.

Yet, behind every success lies a silent force

The Silent Shield: Intelligence Networks

Informants, analysts, and field operatives form the backbone of every successful operation.

*  They operate under risk

*  Their exposure can collapse entire networks

*  Their contribution must be recognised discreetly, not publicly

“An exposed informant today is a lost network tomorrow.”

A Market-Driven Menace

Drug trafficking is not accidental, it is profit-driven.

The scale of maritime smuggling suggests that Sri Lanka is no longer just a transit hub. It is increasingly becoming a destination market.

This transforms narcotics from a policing issue into a national social crisis.

Inside the Network: A Structured Ecosystem

The drug trade operates through layered chains:

*  International syndicates

* Maritime couriers

*  Local facilitators

* Urban distributors

* Street-level peddlers

Each layer is insulated. Each link is replaceable.

“Break one link, and the chain adapts. Break the system, and the threat collapses.”

Demand Is Engineered

A critical reality:

Drug networks do not wait for demand; they create it.

* Free or low-cost initial access

* Targeting youth and vulnerable groups

* Expansion through peer networks

* Stealth distribution networks

Addiction is often designed, not accidental.

Awareness: Prevention or Promotion?

Sri Lanka’s awareness programmes show mixed results.

While well-intentioned:

* Overexposure can trigger curiosity

* Fear-based messaging is ineffective

* Generic campaigns lack relevance

“Poorly designed awareness can introduce what it seeks to prevent.”

The Missing Link: Awareness + Recovery

Awareness alone is insufficient.

A modern approach must include:

*  Simple, relatable communication

* Focus on life consequences

* Clear access to rehabilitation

Shift the message:

From: “Say no to drugs”

To: “If trapped, there is a way out”

When Success Creates Strain: The Justice System Under Pressure

An often-overlooked consequence of increased drug detections is the pressure it places on the justice and prison systems.

A large number of drug-related offences are non-bailable, leading to a steady rise in remand populations. This has resulted in:

*  Severe prison overcrowding

* Heightened tension among inmates

* Increased confrontation between prisoners and prison authorities

Overcrowded prisons are not only a humanitarian concern they are an escalating security risk.

The Forensic Bottleneck: Delays in Government Analyst Reports

At the centre of this strain lies a critical dependency the Government Analyst Department.

Every detection requires scientific confirmation. However, the system is under significant pressure:

* High volume of samples

* Shortage of trained personnel

* Limited availability of chemicals and laboratory materials
·

*  Multiple deadlines imposed by courts

These constraints have led to delays in submitting reports, which in turn:

*  Extend remand periods

*  Increase court backlogs

*  Fuel frustration among inmates

“Justice delayed in narcotics cases becomes both a legal failure and a security threat.”

A Sensitive Concern: Accuracy of Detections

Another emerging concern is that a number of samples sent for analysis reportedly do not contain narcotics.

If substantiated, this raises serious issues:

*  Are arrests being made on insufficient preliminary evidence?

* Are field testing methods reliable?

* Is there undue pressure to increase detection statistics?

The implications are profound:

*  Wrongful detention

*  Loss of public trust

* Weakening of legitimate enforcement efforts

Each inaccurate detection undermines the credibility of the entire system.

A Dangerous Imbalance

Sri Lanka now faces a structural imbalance:

*  Strong enforcement

*  Increasing arrests·

*  Limited forensic capacity·

*  Overburdened courts·

*  Overcrowded prisons

This imbalance creates a chain reaction of institutional stress.

The Strategic Gap: Where Is the Research?

Despite strong enforcement, Sri Lanka lacks a research-driven response.

The Police Narcotics Bureau and National Dangerous Drugs Control Board must be strengthened with:

*  Dedicated research units

*  Data on usage trends·

*  Behavioural analysis·

*  Evaluation of awareness programmes

Supported by international collaboration.

“Without research, strategy becomes a reaction.”

From Sea to Society

“Boots on the ground” must extend beyond enforcement:

*  Religious leaders·

*  Teachers and schools·

*  Parents·

*  Community networks·

The real battle is not only at sea but within society.

A National Priority

The consequences are severe:

* Loss of youth potential·

* Rising crime·

* Family breakdown·

* Long-term public health burden

This is a national security issue with generational consequences.

STRATEGIC CONCLUSION

OFFENSIVE FRAMEWORK (SUPPLY DISRUPTION)

INTERNATIONAL PARTNERS

NATIONAL INTELLIGENCE

SRI LANKA NAVY / COAST GUARD

POLICE NARCOTICS BUREAU

STF / POLICE OPERATIONS

ARRESTS & SEIZURES

JUDICIAL SYSTEM

Focus: Intelligence-led interdiction, maritime dominance, legal enforcement

PREVENTIVE FRAMEWORK (DEMAND REDUCTION)

GOVERNMENT POLICY & RESEARCH

NDDCB / PNB COORDINATION

EDUCATIONAL INSTITUTIONS

TEACHERS / COUNSELLORS

RELIGIOUS & COMMUNITY LEADERS

PARENTS

YOUTH

Focus: Awareness, early detection, social resilience, rehabilitation

INTEGRATED NATIONAL STRATEGY

(OFFENSIVE) (PREVENTIVE)

Sri Lanka has proven its ability to intercept drugs.

But interception alone is not victory.

“If enforcement is strong but society is weak, the problem will return.

If both are strong, the threat can be contained.”

Conclusion

Sri Lanka is no longer confronting a distant or isolated narcotics threat it is facing a deeply embedded, evolving ecosystem that stretches from international waters to the minds of its youth.

The recent surge in maritime interceptions is not merely a success story. It is also a warning.

Every shipment seized at sea is a reflection of a demand that exists on land.

We must therefore move beyond the comfort of operational victories and confront the harder truth: this battle cannot be won by enforcement alone.

“Boots on the ground” must now mean more than patrol vessels and tactical units. It must represent a nationwide presence of awareness, vigilance, intelligence, and responsibility from coastal radar stations to classrooms, from intelligence cells to family homes.

At the same time, we must protect what protects us from the intelligence networks that operate in silence. Their strength lies in their invisibility. Their recognition must remain measured, discreet, and strategic.

The drug economy is adaptive. It creates demand where none exists, exploits vulnerability where it finds it, and thrives where systems are disconnected. If left unchecked, it will not only fuel crime it will reshape society, erode institutions, and compromise future generations.

What Sri Lanka needs now is not a fragmented response, but a coordinated national doctrine:

*  Strong at sea

*  Smart in policy

*  Deep in research

*  Present in societyBecause the real battleground is no longer just geography it is generational.

What is required now is not just stronger enforcement but smarter systems, balanced capacity, and a unified national response. Because this is no longer just about drugs. It is about the future of the nation.

Mahil Dole is a retired senior police officer and former Head of the Counter-Terrorism Division of Sri Lanka’s State Intelligence Service. With over four decades in policing and intelligence, he has interviewed more than 100 suicide cadres linked to extremist movements. He is a graduate of the Asia-Pacific Center for Security Studies in Hawaii and has received specialist training on terrorist financing in Australia and India.

By Mahil Dole

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Opinion

Sri Lanka has policy, but where is the data?

Published

1 day ago

on

2026/03/31

By

In recent months, President Anura Kumara Dissanayake has repeatedly expressed a concern that the government does not have the accurate data it needs to make good decisions.

At meetings with senior officials from ministries ranging from health and agriculture to education and infrastructure, the President has reportedly lamented that the government often lacks reliable information on what its projects are achieving, how funds are being spent, and whether public investments are producing results. The meeting on December 6th at the Matale District Secretariat was a case in point. The President emphasised the need for most accurate data to award compensation for damaged agricultural lands before the month’s end. He recalled that the Department of Agriculture’s data showed an excess of rice in the country, but the nation has faced a rice shortage.

For a country attempting economic recovery after the most severe crisis in its post-independence history, absence of accurate data is a dangerous position to be in.

Without data, decisions become guesswork. Without evidence, policy becomes speculation.

Ironically, Sri Lanka already possesses the policy architecture required to solve this problem. The National Evaluation Policy (2018) and the National Evaluation Policy Implementation Framework (2023) were created precisely to ensure that public spending is guided by evidence, results, and accountability. Yet today, despite these policies and the presence of a dedicated government agency tasked with monitoring development projects, the country still lacks the integrated digital monitoring and evaluation system needed to turn policy into practice. Until that gap is closed, Sri Lanka will continue to struggle with inefficient public investment, delayed projects, and policy decisions made without reliable evidence.

The scale of the problem

The Department of Project Management and Monitoring (DPMM), operating under the Ministry of Finance, is the central institution responsible for overseeing development projects implemented by government ministries. According to its 2024 Annual Performance Report, the department monitored 226 large-scale development projects across various ministries during the year. These projects collectively had an allocated budget of LKR 705 billion, but the actual expenditure amounted to only LKR 401.96 billion, representing about 56.9% utilization of the allocated funds.

In other words, nearly half of the planned development spending did not materialize.

While fiscal constraints and external factors contributed to this outcome, the data nevertheless highlights a deeper systemic issue: weak monitoring and decision-making structures that fail to identify and resolve implementation problems early.

The report also indicates that many projects face delays due to procurement issues, coordination failures, cost escalations, and operational bottlenecks. What makes the situation more troubling is that information about these problems is often fragmented and slow to reach decision-makers.

The government does monitor projects through reports and field visits, but the information flow remains largely manual and scattered across ministries. In the digital age, such a system is simply inadequate.

A policy that already foresaw the solution

Sri Lanka’s National Evaluation Policy (NEP), approved by the Cabinet in 2018, recognised this problem years ago. The policy aims to ensure that public investment decisions are guided by reliable evidence, efficiency, and measurable development results.

The NEP outlines several key goals:

· strengthening evidence-based decision making,

· improving efficiency in resource utilisation,

· ensuring transparency and accountability in public expenditure,

· promoting learning from successes and failures of past projects, and

· creating a national culture of evaluation.

To operationalise the policy, the government introduced the National Evaluation Policy Implementation Framework (NEPIF) in 2023. This framework explicitly calls for the creation of integrated information systems capable of gathering and analyzing data across the project cycle—from planning and budgeting to implementation and evaluation. In fact, NEPIF specifically proposes the establishment of a web-based integrated public investment management and evaluation information system to store project data and evaluation reports.

Such a system would allow decision-makers to access reliable information quickly, improving accountability and policy planning. Unfortunately, despite the clarity of this vision, the digital infrastructure necessary to implement it at a national scale is still largely absent.

A revealing moment at a Colombo seminar

The urgency of this gap became strikingly clear at a recent seminar in Colombo organized by a national NGO. The organization demonstrated its cloud-based monitoring and evaluation system which was comprehensive and updated by multiple layers of personnel, to a group of university students. On a large screen, a dashboard displayed real-time information on the organization’s twenty development projects across the country. Each project appeared as a branch of a digital tree, connected to activities, budgets, locations, and beneficiaries. With a few clicks, staff could generate reports showing the status of any project at national, district, or local levels, both of data and graphics. Updated data was available up to the previous day.

What would normally take weeks of manual compilation could be done in less than a minute.

Among the audience was a university academic who observed something obvious but powerful. ‘If a small NGO can run a system like this,’ he asked, ‘why can’t the Government?’ Another participant responded and told that the non-introduction of a digitalized Monitoring and Evaluation mechanism was due to some bureaucrats’ resistance. ‘I heard the Evaluation Reports of several projects of the government was not published because the respective Project Managers had opposed, fearing their failure would be exposed’, another academic commented. Those comments deserve serious reflection on the situation, I believe.

The digital revolution in monitoring and evaluation

Around the world, governments are increasingly adopting digital monitoring and evaluation platforms to track public investments in real time. These systems combine several elements:

· project databases

· geospatial mapping

· financial monitoring tools

· citizen feedback mechanisms

· performance dashboards for decision-makers.

Countries such as Estonia, South Korea, Rwanda, and Chile have integrated such systems into national governance structures. In these systems, ministers and senior officials can see instantly:

· which projects are progressing

· which projects are delayed

· how funds are being spent

· whether outputs and outcomes are being achieved.

More importantly, such platforms enable early intervention. Problems can be identified before they become crises. For Sri Lanka, which must now manage scarce fiscal resources with extreme care, such tools are no longer optional luxuries.

They are necessities.

The cost of not knowing

The absence of integrated data systems carries real economic consequences. Public investment decisions affect everything from roads and irrigation schemes to hospitals and schools. When these investments fail or underperform, the cost is not merely financial. It affects the daily lives of citizens.

A hospital without doctors. An irrigation scheme without water. A school building without teachers.

These are not simply implementation failures; they are information failures.

Without reliable monitoring systems, governments often learn about problems too late. By the time corrective action is taken, budgets have been spent and opportunities lost.

The NEPIF recognises precisely this challenge. It emphasises that evaluation should be an integral part of the entire development cycle—from project design to implementation and feedback for future planning.

But such evaluation cannot occur without reliable data systems.

Building an evaluation culture

Another important goal of the National Evaluation Policy is to create a culture of evaluation within the public sector. This requires a shift in mindset. Evaluation should not be seen as a fault-finding exercise. Instead, it should function as a learning mechanism that helps improve policy design and implementation.

The NEPIF stresses that evaluation findings should inform planning, budgeting, and future project selection. However, without systematic information systems, evaluation results often remain scattered across reports that few decision-makers read. Digital platforms can transform this situation by making information visible, accessible, and actionable. They turn data into knowledge. And knowledge into better decisions.

What a national digital system could look like

Sri Lanka does not need to start from scratch. The institutional building blocks already exist:

· the Department of Project Management and Monitoring (DPPM)

· the National Evaluation Policy

· the National Evaluation Policy Implementation Framework

· various sector-specific monitoring systems across ministries.

What is missing is integration.

A national digital monitoring and evaluation platform could include:

1. A centralised project database:

All government development projects recorded with budgets, timelines, outputs, and implementing agencies.

2. Real-time progress dashboards:

Accessible to the President, Cabinet, ministry secretaries, and provincial administrators.

3. Geographic mapping:

Showing where projects are located and how they benefit communities.

4. Automated reporting:

Reducing paperwork and enabling faster decision-making.

5. Citizen transparency portals:

Allowing the public to see how public funds are used.

Such a system would dramatically strengthen transparency, accountability, and efficiency.

The opportunity before Sri Lanka

Sri Lanka today has a rare opportunity. Economic crises often force governments to rethink outdated systems. The country cannot afford inefficient public investments any longer. Every rupee spent must produce measurable results. The National Evaluation Policy and its implementation framework already provide the intellectual foundation for this transformation. What remains is political commitment. A bold decision to build the digital infrastructure of evidence-based governance.

A call to action

The President’s concern about the lack of reliable data in government is both accurate and urgent. But the solution does not require new policies. The policies already exist. What Sri Lanka needs now is implementation. A national digital monitoring and evaluation system would give policymakers something they currently lack: a clear, real-time picture of the country’s development efforts. Such a system would empower leaders to identify problems early, allocate resources wisely, save billions of rupees from wasting and ensure that development projects truly benefit citizens.

In short, it would give Sri Lanka what every modern state needs: a digital nervous system connecting policy, data, and decision-making. The question is no longer whether the country needs such a system.

The question is simply this: how soon Sri Lanka is willing to build it.

by Tilak W. Karunaratne

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Opinion

Tribute to a distinguished BOI leader

Published

4 days ago

on

2026/03/29

By

Mr. Tuli Cooray, former Deputy Director General of the Board of Investment of Sri Lanka (BOI) and former Secretary General of the Joint Apparel Association Forum (JAAF), passed away three months ago, leaving a distinguished legacy of public service and dedication to national economic development.

An alumnus of the University of Colombo, Mr. Cooray graduated with a Special Degree in Economics. He began his career as a Planning Officer at the Ministry of Plan Implementation and later served as an Assistant Director in the Ministry of Finance (Planning Division).

He subsequently joined the Greater Colombo Economic Commission (GCEC), where he rose from Manager to Senior Manager and later Director. During this period, he also served at the Treasury as an Assistant Director. With the transformation of the GCEC into the BOI, he was appointed Executive Director of the Investment Department and later elevated to the position of Deputy Director General.

In recognition of his vast experience and expertise, he was appointed Director General of the Budget Implementation and Policy Coordination Division at the Ministry of Finance and Planning. Following his retirement from government service, he continued to contribute to the national economy through his work with JAAF.

Mr. Cooray was widely respected as a seasoned professional with exceptional expertise in attracting foreign direct investment (FDI) and facilitating investor relations. His commitment, leadership, and humane qualities earned him the admiration and affection of colleagues across institutions.

He was also one of the pioneers of the BOI Past Officers’ Association, and his passing is deeply felt by its members. His demise has created a void that is difficult to fill, particularly within the BOI, where his contributions remain invaluable.

Mr. Cooray will be remembered not only for his professional excellence but also for his integrity, humility, and the lasting impact he made on those who had the privilege of working with him.

The BOI Past Officers’ Association

jagathcds@gmail.com

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