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Sri Lanka
>> Regional Overview >> Sri Lanka Overview ACTIVITY DATA SHEET
PROGRAM: Sri Lanka
TITLE AND NUMBER: Improved Framework for Trade and Investment, 383-001
STATUS: Ending
PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: None.
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: None.
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: FY 2001Summary: This strategic objective will be completed in FY 2001; most of the related activities were completed by September 2000. This objective was USAID's main contributor to the Agency objective of expanded and strengthened private markets and to the Mission Performance Plan goal of broad-based economic growth. The purpose of the objective is to contribute to improvement of financial market and trade/investment systems, policies, and practices necessary to attract the levels of investment required for sustained growth and competitiveness. The activities focus on strengthening financial market practices and liberalizing related policies; and liberalizing trade and investment policies. Targeted beneficiaries include the private sector, including associations and firms; financial market institutions; and the Government of Sri Lanka (GSL). Under this objective, USAID accomplished its objectives and met performance targets through the achievement of numerous significant policy and regulatory reforms and best practices related to financial market and trade/investment systems, contributing to an improved framework for trade and investment.
Key Results: Over the life of this objective, numerous significant policy and regulatory reforms and best practices were achieved related to financial market and trade/investment systems policies. These included: introduction of debt instruments; establishment of a system for regulating listed corporate bonds; establishment of secondary trading in government securities; development of a code of conduct for primary dealers; removal of a stamp tax on mortgage-backed securities; pension funds allowed to invest in the share market; equal taxation treatment for bonds and shares listed on the Colombo Stock Exchange; a settlement guarantee fund established; international property rights law drafted and a related law course established; establishment of Association of International Standards to introduce ISO 9000; ISO 14000 introduced; establishment of National Agribusiness Council to pursue on-going agriculture policy reform; establishment of Institute of Directors for good corporate governance; integration of the Junior Achievement program into the National Education reform program; enactment of the Seed Act; duty on seeds, spores, and planting materials abolished; abolishment of import license for maize and import of certain corn seed liberalized; duty on all purebred breeding animals abolished; duty on irrigation and high tech agriculture equipment waived; duty on agriculture netting waived; duty waived on materials used for packaging milk and juices; duty on canning and food processing machinery reduced or abolished; and importation of bumblebees for pollination allowed.
Performance and Prospects: Performance under this objective since its commencement and during FY 2000 was on target, as nine policies were to be adopted and practices implemented by the end of FY 2000. As indicated above, over 20 significant policy and regulatory reforms and best practices were achieved by the end of FY 2000 related to financial market and trade/investment systems policies. In addition to the aforementioned policy and regulatory reforms and best practices, the following five activities were implemented during FY 2000, further augmenting an improved framework for trade and investment:
Strengthening Financial Market Practices-Financial market reform activities focused on further development of the debt market. Main actors in areas such as corporate debt markets and secondary trading in government securities were trained. Significant resources were contributed to train key Customs, Inland Revenue and Ministry of Finance staff on tax policy analysis. This resulted in taking initial steps to simplify tax reporting and increase compliance through more efficient auditing and issue of default notices.
Agro-Industry Policy Reforms-Prior to FY 2000, USAID-funded technical assistance supported 18 agribusiness associations with a total membership of 2,800. In FY 2000, these associations continued to identify constraints to agribusiness-related trade and investment and to advocate for additional reforms. The National Agribusiness Council was founded in FY 2000 with USAID support. Its membership is composed of the 18 agribusiness associations supported under this objective, and it represents approximately 75% of the agribusiness sector. The council's mandate is to continue to improve the enabling environment for a viable and profitable agribusiness sector in Sri Lanka. During FY 2000, an agro-industry strategy and policy action plan also were drafted. The policy action plan was a joint effort between the private sector and the government upon which future policy dialogue and policy and regulatory reforms may be based.
Intellectual Property Rights (IPR)-Under this objective, USAID assisted the GSL to draft a proposal for protecting IPR. When passed, Sri Lanka will be one of the few developing countries to meet the World Trade Organization obligations on IPR. Considerable time was spent developing awareness of the importance of intellectual property legislation and facilitating consensus among the relevant players. In FY 2000, the bill was translated into the Sinhala and Tamil languages. The government delayed introducing the revised IPR law to Parliament due to elections, but it is anticipated that the bill will be passed in 2001. Concurrent with efforts to amend the IPR law, USAID, through Georgetown University, developed a diploma program on intellectual property law that will develop legal professional expertise on the subject.
Junior Achievement Program-USAID, working with the Federation of Chambers of Commerce and Industries of Sri Lanka, was instrumental in initiating Junior Achievement in Sri Lanka in 1998, during which time 1,700 students in eleven schools participated. This program has rapidly expanded, and participation reached 5,000 students in 40 schools during FY 2000. The private sector now covers the majority of the costs of the program, far exceeding the original expectations of sustainability. This program is a model of a private-public partnership helping to produce a job-oriented workforce. The Sri Lankan Junior Achievement program, called the "Young Entrepreneur Sri Lanka Program," has been identified as a key component of the Ministry of Education's education reform program. The Ministry has requested Junior Achievement to introduce this program in the 139 priority schools selected for the pilot education reform effort.
Corporate Governance-In FY 2000, with USAID assistance, the Ceylon Chamber of Commerce formed an Institute of Directors to help Sri Lankan business leaders to strengthen corporate governance capacity and ensure their companies behave as good corporate citizens. To support this, the Institute revised the code of best practices and has prepared a directors manual.
Possible Adjustments to Plans: In 1998, USAID began providing technical assistance related to the development of a new competitiveness initiative, leading to the establishment of a new strategic objective, "Increased Sri Lankan Competitiveness in the Global Marketplace" (383-004). While this new strategic objective commenced in August 2000, activities for improving competitiveness undertaken in FY 2000 and 2001 are being funded under the "Improved Framework for Trade and Investment" objective, although reporting is under the competitiveness objective.
Other Donor Programs: Programs of the World Bank and Asian Development Bank emphasize continued progress on macro-economic reform and improvement in infrastructure. Bilateral donors providing support for private enterprise development, competitiveness, and agribusiness development include Germany, Norway, and Japan. The International Labor Organization assists on management/labor issues.
Principal Contractors, Grantees, or Agencies: International Executive Service Corps; Oregon State University/Development Alternatives Inc.; International Science and Technology Institute; and Nathan Associates/MSI, Inc. with J.E. Austin Associates.
FY 2002 Performance Table
Sri Lanka: 383-001
Performance Measures:
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY00 (Plan) FY01 (Plan) FY02 (Plan) Indicator 1: Nine policies adopted or practices implemented by September 1999 0 2 8 NA 3 NA NA Indicator 2: Three financial markets policies or improved practices in progress per year 0 5 1 NA 3 NA NA Indicator 3: Three trade and investment policies or improved practices in progress per year 0 7 7 NA 3 NA NA Indicator Information:
Indicator Level (S) or (IR) Unit of Measure Source Indicator Description Indicator 1: IR Number of policies and practices in the adoption/implementation stage Contractors' progress reports Adoption stage - All interested stakeholders are identified at this stage. Information is shared and a decision is reached concerning the advisability of entering into dialogue and consensus-building to encourage the adoption of the proposed reform. Indicator 2: IR Number of policies or practices in evaluation/analysis or dialogue stage ISTI progress reports Evaluation/analysis stage - All interested stakeholders are identified at this stage. Information is shared and a decision is reached concerning the advisability of entering into dialogue and consensus-building to encourage the adoption of the proposed reform. Dialogue stage - Stakeholders and policy makers enter into dialogue. Consensus about the problem and the proposed reform measure(s) is the goal. Results of the evaluation and analysis are used to gain such consensus. Indicator 3: IR Number of policies or practices in evaluation/analysis or dialogue stage IESC and OSU/DAI progress reports Evaluation/analysis stage - All interested stakeholders are identified at this stage. Information is shared and a decision is reached concerning the advisability of entering into dialogue and consensus-building to encourage the adoption of the proposed reform. Dialogue stage - Stakeholders and policy makers enter into dialogue. Consensus about the problem and the proposed reform measure(s) is the goal. Results of the evaluation and analysis are used to gain such consensus. U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 18,279 DA 11,584 DA 6,695 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 500 DA 0 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 18,779 DA 11,584 DA 7,195 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 18,779 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA
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Last Updated on: May 29, 2002 |
