SAIL was a four-year project which aimed to provide policy and institutional support to improve the business enabling environment and promote investment and trade in Sri Lanka. SAIL also aimed to improve performance on World Bank Doing Business indicators, strengthen investment policies and promotion activities, and support the government’s goal to become an upper-income country. An improved investment enabling environment leads to greater domestic and foreign investment in Sri Lanka that creates jobs, increases economic growth, promotes stability, levels the playing field for all foreign investors, builds the tax base, and reduces Sri Lanka’s dependence on USAID and other donors.
The project focused on identifying and removing barriers to investment and trade; improving policies, laws, and regulations concerned with the business enabling environment impacting investment; streamlining investment approval processes; providing capacity building of reform related agencies; and supporting civil society advocacy and public-private dialogue.
SAIL worked in the following areas:
A significant hurdle the business community faces is the excruciatingly long time it takes for commercial courts to hear and adjudicate commercial disputes. IDG conducted an analysis of the commercial dispute processes in commercial courts to identify the most significant factors in this problem and worked with an inter-agency working committee to agree and then implement an action plan of procedural changes to address the problems. The inter-agency committee included the Ministry of Justice (MOJ), Ministry of Development Strategies and International Trade (MoDSIT), the Judicial Service Commission, and private practitioners among others. SAIL worked with associations of private businesses recognizing that advocacy for this reform needs to come those who have an interest in seeing a more effective, streamlined dispute resolution process.
To speed up the process of getting approvals for foreign and domestic investors, IDG worked with the Sri Lanka Tourism Development Agency (SLTDA) and the Urban Development Authority (UDA) to reduce the number of steps needed before moving forward with investment, to streamline processes, to simplify and reduce the numbers of forms, and to make information better available to potential investors as to what the processes and requirements are for getting investment approvals. The team also advised on creating a simple database to track approvals through the system, as a stopgap improvement until a more comprehensive automated system can be developed and put in place.
Sri Lanka has a particularly onerous labor regime in terms of the requirements placed on employers with respect to employment of workers, including some of the world’s lengthiest mandatory severance payments for terminated workers. While intended to help workers, these requirements wind up harming workers as many companies seek to evade the formal labor regime by hiring workers informally, or only in a short-term capacity, or through third-party employment agencies. The labor regime is also very confusing, with different rules applying to different industries, and multiple conflicting laws and regulations applying to labor. At the same time, Sri Lanka lacks many protections afforded to workers in other countries, including protection against discrimination on the basis of gender and ethnicity. To address these issues, IDG provided advice aimed at introducing a new, unified labor law that better safeguards workers without onerously burdening companies. IDG collaborated with an inter-agency working group, a civil society, and the trade unions to build their interest in advocacy.
Capacity Development of Key Reform Ministries. IDG provided comprehensive capacity building support for MoDSIT, MOJ and SLTDA. The project provided MoDSIT with onsite support as well as technical assistance to support policy analysis and implementation of agreed reforms related to making improvements in the investment climate. IDG also provided support to MoDSIT to build capacity to improve its outreach on reforms being implemented. The project supported MOJ to implement reforms proposed in the justice sector to improve the functioning of the Commercial High Court and disposition of commercial cases. The project also provided onsite support to build capacity of government staff to implement the proposed reforms. IDG also provided support to build capacity of SLTDA One Stop Unit to implement streamlined investment approval processes and to become a real “One Stop Shop” for investment in the tourism sector in Sri Lanka.
IDG built capacity of the Sri Lanka Tourism Development Agency’s One Stop Unit to implement streamlined investment approval processes and to become a real “One Stop Shop” for investment in the tourism sector in Sri Lanka. To speed up the process of getting approvals for foreign and domestic investors, IDG worked with the Sri Lanka Tourism Development Agency and the Urban Development Authority to reduce the number of steps needed before moving forward with investment and to streamline processes. The team also advises on creating a simple database to track approvals through the system, as a stopgap improvement until a more comprehensive automated system can be put in place. The Supporting Accelerated Investment in Sri Lanka project aims to improve performance on World Bank Doing Business indicators and strengthen investment policies and promotion activities. An improved investment enabling environment leads to greater domestic and foreign investment in Sri Lanka that creates jobs, increases economic growth, promotes stability, levels the playing field for all foreign investors, builds the tax base, and reduces Sri Lanka’s dependence on USAID and other donors. A significant hurdle the business community in Sri Lanka faces is the excruciatingly long time it takes for commercial courts to hear and adjudicate commercial disputes. IDG conducted an analysis of the commercial dispute processes in commercial courts to identify the most significant factors in this problem and is working with an inter-agency working committee to agree and then implement an action plan of procedural changes to address the problems. IDG assessed how reducing duties on ICT products and applying the World Trade Organization’s (WTO) Information Technology Agreement (ITA) would contribute to the development of the ICT sector in Sri Lanka and the country’s overall growth and development. Specifically, IDG examined Sri Lanka’s import and export structure as per the products listed in the WTO ITA. This included the Customs Import Duties (CID) and other Duties and Charges (para-tariffs) on imports to and exports from Sri Lanka for each Harmonized System (HS) Code associated with the WTO ITA. The study also analyzed the changes to Government revenue if Sri Lanka decides to remove CIDs and para-tariffs as per the WTO ITA. IDG assessed the Commercial High Court of Colombo and reviewed its cases, drafting a descriptive mapping of the Commercial High Court case process under the Supporting Accelerated Investment in Sri Lanka project. This included a review covering 29 cases, which included cases in intellectual property claims. Sri Lanka lacks many protections afforded to workers in other countries, including protection against discrimination on the basis of gender and ethnicity. To address these issues, IDG provides advice aimed at introducing a new, unified labor law that better safeguards workers without onerously burdening companies.Areas of Expertise
Private Sector Development
Enabling Environment
International Trade
Intellectual Property
Gender and Inclusivity
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