Land Expropriation Policy Brief

Land expropriation in Sri Lanka, governed by the Land Acquisition Act, plays a key role in public welfare and infrastructure development. However, three critical challenges persist: vague criteria for urgent acquisitions, a subjective definition of "public purpose," and delays or inadequacies in compensation for affected landowners. These issues raise concerns about fairness, transparency, and the potential misuse of power. To address these, our policy briefs provide in-depth insights and actionable recommendations for reform.

To access the Land Expropriation Policy Briefs, click below

Advocata SOE Reform Roadmap : Getting the State Out of Business: The Compelling Case for Privatisation of State-Owned Businesses

Sri Lanka's state-owned enterprises (SOEs) are a major hindrance to the country’s economic prosperity. The state's footprints extend across all major industries - telecommunications, banking, ports, petroleum, and power generation. With over 400 SOEs spread across 33 sectors and employing roughly 250,000 workers, they form an inefficient, bloated bureaucracy. The IMF's Governance Diagnostic Assessment flags SOEs as being high-risk for corruption, plagued by weak management, shoddy oversight, rigged procurement processes, political interference, and a lack of transparency. Sri Lanka cannot afford the status quo. Decisive action to privatise SOEs is essential to break free from the cycle of inefficiency and corruption, and unlock sustainable economic growth.

Here is the link to the Advocata SOE Reform Roadmap in English on

Getting the State Out of Business: The Compelling Case for Privatisation of State-Owned Businesses

Here is the link to the Advocata SOE Reform Roadmap in Sinhala

Here is the link to the Advocata SOE Reform Roadmap in Tamil

Advocata Policy Brief : The Role of Public Private Partnerships (PPPs) as a Sustainable Alternative to Public Infrastructure Investments in Sri Lanka

The Budget Speech 2024 revealed that Sri Lanka plans to accelerate Public Private Partnerships (PPPs) to secure the required investments and expertise to facilitate continued provision of much needed public infrastructure projects across the country. Against the backdrop of Sri Lanka’s efforts to come out of its current economic crisis, which was largely caused by the mismanagement of public finances and unsustainable levels of national debt - partly taken to fund large scale public infrastructure projects, this indication to involve the private sector in public infrastructure service provision going forward is a positive and sustainable sign.

However, the PPP framework in Sri Lanka at present is characterised by multiple institutional and regulatory weaknesses, which should be resolved before PPPs can fully serve to facilitate sustainable infrastructure investments in the country.

Here is the link to the Advocata Policy Brief on The Role of Public Private Partnerships (PPPs) as a Sustainable Alternative to Public Infrastructure Investments in Sri Lanka

WPAN Policy Brief : Informal Employment With a Focus on Domestic Workers in Sri Lanka

Domestic workers in Sri Lanka have been a significant part of the paid care eco-system, and have long suffered from poor working conditions caused by many economic and social barriers. Prior to the establishment of specialized child care, and elderly care agencies which are still limited to urban Sri Lanka, domestic workers made up almost all of the paid care sector in the country.

Here is the link to the WPAN Policy Brief on Informal Employment With a Focus on Domestic Workers in Sri Lanka

Press Release: Advocata Institute Applauds Economic Transformation Bill, Calls for Careful Implementation and Transparency

Originally appeared on Daily FT, Ada Derana

The Advocata Institute welcomes the government’s stated intention to move from an inward-oriented economy to a more open economy to boost international trade, foreign investment and productivity.

The Sri Lankan government has gazetted the Economic Transformation Bill to overhaul the country's economic landscape. This ambitious Bill aims to create a more competitive, export-oriented, and digitally-driven economy while achieving net-zero emissions by 2050- however, enshrining economic targets in law may prove to be problematic.

Some of the key reforms include the establishment of new institutions that are intended to address some important issues. The Bill proposes establishing an Economic Commission to streamline economic activity and trade, and splitting the role of the Board of Investments (BOI) between Zones SL, Invest Sri Lanka, and the Economic Commission. Additionally, the bill also sets up specialized bodies to focus on promoting foreign investment (Invest Sri Lanka), developing industrial zones (Zones SL) and international trade (Office for International Trade), boosting productivity (National Productivity Commission), and providing economic expertise (Sri Lanka Institute of Economics and International Trade).

The policy will address crucial areas like debt management, agricultural modernisation, import-export regulations, and economic governance.

The Economic Transformation Bill sets ambitious debt reduction targets, aiming to bring the public debt-to-GDP ratio below 95% by 2032 and significantly reduce annual government borrowing needs. This strategy is complemented by a Public Financial Management Bill, which will be introduced alongside the Economic Transformation Act, to ensure responsible management of public finances and prevent future economic crises.

The Bill requires the Cabinet of Ministers to submit a report to Parliament every five years, outlining the policy framework and strategies to achieve the National Economic Transformation goals (Section 5). This may be revised from time to time and presented to Parliament. The first report is to be presented in 2025.

All policies, programmes, regulations, circulars, and directives of the Government shall conform to such National Policy on Economic Transformation. The government will also present a report each year on March 31st detailing progress made towards each target, and any corrective actions taken as and when needed (Section 7).

Limits for levels of debt and public expenditure are within the control of the government and are widely used in other countries. Targets such as Exports/GDP, FDI/GDP while clearly signaling the government's intent, belong more to the realm of policy than law. The bill makes provisions that where these targets have not been met, the Government shall inform Parliament of the measures being taken to remedy the situation and indicate when they will be met. While the remedial measures reflect a commitment to meeting these targets, the practicality of it may be questionable as many factors influencing these targets often extend beyond direct government control.

Key Aspects of Concern

• The composition of the Board of the Economic Commission, which proposes a ten member board with four ex officio members of the relevant line ministries while there will be six members appointed by the President. The chairperson of the Economic Commission Board will also be a Presidential appointment, while the Director General of the Economic Commission is a Ministerial appointment. The wide powers exercised by the President over these appointments leave room for questions of credibility and politicization of appointments which needs to be carefully considered. Independent appointments of these key officials is mandatory for effective national policy formulation.

• Advocata is concerned that certain provisions of the Bill do not apply to the Colombo Port City Special Economic Zone, established under section 2 of the Colombo Port City Economic Commission Act, No. 11 of 2021. This exclusion could lead to unfair competition.

• Another important point of concern is the incentives and exemptions offered to investors under this bill, which leaves room for ad-hoc short-term measures that can be changed from time to time under the prescription of the Minister.

• Setting targets on debt and primary balance is commonly found in laws, while targets for GDP growth, exports, and unemployment are often addressed as policy targets. By codifying these targets into law, they gain a degree of enforceability that is not typical for policy goals. This raises questions about the mechanisms for enforcement and the consequences for failing to meet these targets. The decision to legislate specific economic targets in Sri Lanka’s Economic Transformation Act is unusual but comes with potential challenges in terms of enforcement and practicality.

Dr Franziska Ohnsorge on Advocata Conversations | Ep.11| Murtaza Jafferjee | Dr Franziska Ohnsorge

We are back with our 11th episode of Advocata Conversations!

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact.

Our 11th episode is between Dr Franziska Ohnsorge ,Chief Economist at South Asia World Bank. She has been responsible for leading research programs on key economic issues in South Asia along with informing policy debates and World Bank lending. Prior to joining the World Bank, Franziska Ohnsorge worked in the Office of the Chief Economist of the European Bank for Reconstruction and Development and at the International Monetary Fund.

This conversation converses between Dr .Franziska and the Chair of Advocata, Murtaza Jafferjee.

The conversation focuses on the Title -South Asia Development Update 2024

Dr Franziska Ohnsorge in this conversation discusses about launching the South Asia development semi annual report that the World Bank produces on the growth Outlook of the region, further focusing on occupying policy makers. She pertains to describe this year’s report mainly involves on two things ; climate adaptation and creating more jobs in the market.

Media Coverage: SOE Losses Costing LKR 141,809 per Sri Lankan Household

Originally appeared on Daily FT, Lanka Business Online

The soft pedaling by the government to carry out crucial reforms of State Owned Enterprises is forcing taxpayer’s wallets to take the brunt of the hit, says Colombo based think tank, Advocata Institute.

Dhananath Fernando, the Chief Executive Officer of the Advocata Institute said, taking into account the upcoming election cycle, the Advocata Institute, urged the need to reform State Owned (SOE) Enterprises. Here it was said that irrespective of the government that comes into power, SOE reforms must continue.

The cumulative losses of key 52 SOE’s in 2022 amounted to LKR 744.6Bn, costing LKR 1.7Mn per registered taxpayer, LKR 33,949 per citizen and LKR 141,809 per household. Despite the sharp increase in tax collection, estimates of tax collection for 2024 cannot cover the losses incurred by these 52 SOE’s for the year 2022.

“The delay in restructuring is impacting ordinary Sri Lankans the most and the longer it takes and it’s going to make it worse for Sri Lankan citizens and taxpayers irrespective of who comes to power in the upcoming polls,” Fernando said. “There's a 1 in 3 who don’t make 30,000 rupees per month in Sri Lanka hence putting more burden on taxpayers makes no sense.”

It was brought to attention that despite the reforms that are underway, they have been running at a snail's pace. The current rate would be “just enough” for Sri Lanka to avoid another crisis but not enough to put Sri Lanka into a trajectory to be competitive in international markets.

Among the 16 recommendations highlighted by the International Monetary Fund, SOE reforms are reiterated to be of importance. Specifically the Holding Company as well as the need to include skilled and competent members for the advisory board.

The cyclical nature of the debt of SOE’s and the domino effect it has on the fiscal deficit on the Government was described through the example of Sri Lankan Airlines. The possibility of a second round of debt restructuring owing to an inability to deal with SOE’s and their losses was explained.

The need to divest Sri Lankan Airlines through transparent bidding process was implored as allowing this process to be politicized would lead to a zero sum game at the cost of the taxpayer.

Dhananath Fernando, CEO of the Advocata Institute, reiterated the nature of SOE’s being utilized as vehicles for corruption in light of the lack of transparency with regard to financial reports. Here he identified that only a mere 52 SOE’s have released their financial reports to the public. He noted that revenue from income tax barely covers the losses established by the SOE’s.

The losses sustained by Sri Lanka Airlines and the government expenditure on Samurdhi benefits was compared to conceptualize the enormous opportunity cost the people of Sri Lanka are subjected to.

Rehana Thowfeek, Research Consultant, Advocata Institute, expressed that the intervention of the State into markets has had a negative impact on consumer welfare. The cost of the inefficiencies are borne by the taxpayer to fill the pockets of politicians. Updates regarding the current reforms that are underway were highlighted; passing of SOE Reforms Act and a new Banking Act, the setting up of the SOERU (State Owned Enterprise Restructuring Unit) and the mandate of the Holding Company.

“So far SOE’s have served the employees and the politicians and not for the ordinary citizens of Sri Lanka,” Rehana Thowfeek said. “We are nearing two years to the default but the needle of reform hasn’t moved.”

The constant delays during the reforms process, in situations like Sri Lankan Airlines where the deadline for bids has been pushed back several times already only costs the taxpayer more money, said Shihar Aneez, an independent financial journalist.

Last week, the treasury absorbed USD 510Mn of accumulated debt owed to the state banks which is an additional burden of approximately LKR 347,000 per taxpayer and approximately LKR 98,000 per Sri Lankan household. Aneez further said SOE’s are used as a vehicle for corruption, especially during elections.

“SOE assets are primarily used for election purposes by politicians as SOE's are a popular destination to create jobs while running billions in losses, which taxpayers have to stomach,” Aneez said.

Bridge to Recovery:Boosting Employment and Productivity for Economic Growth

The World Bank in partnership with the Sri Lanka Press Institue and the Advocata Institute will be hosting a webinar on the 2nd of April, from 11:30 am-12:30pm, on the topic ‘Bridge to Recovery: Boosting Employment and Productivity for Economic Growth’.

The event will feature panelists, Dr Sanjeeva Weerawarana (Chief Executive Officer, WSO2), Ms. Shyamali Ranaraja (Visiting Lecturer, Dept. of Law University of Peradeniya), Dr,Franziska Ohnsorg (Chief Economist, South Asia World Bank), Mr.Murtaza Jafferjee (Chairman, Advocata Institute). The discussion will be moderated by Dr. Gregory Smith (Lead Economist Maldives, Nepal & Sri Lanka, World Bank).

The discussion will be livestreamed on Advocata Institute Facebook and Youtube Channel, as well as the World Bank’s Facebook page

Taxpayer Burden & The Urgency of State-Owned Enterprise Reforms

In the wake of Sri Lanka's economic challenges, it is undeniable that State Owned Enterprises (SOEs) have had a substantial impact on the country's fiscal health. With the aim of creating further awareness and public debate on the urgency of implementing SOE reforms, the Advocata Institute hosted a press event on the on the 3rd of April,on the topic ‘Taxpayer Burden & The Urgency of State- Owned Enterprise Reforms’

This event addressed areas such as the burden that tax payer has to bare as a result of the loss making State owned enterprises (SOE), Transparency of SOEs and the status of the SOE law encapsulating the pivotal role of the holding company. Dhananth Fernando (CEO of Advocata Institute), Rehana Thowfeek (Research Consultant, Advocata Institute) and Shihar Aneez (Financial Journalist) provided their views at the press conference. 

For more infomation on SOE , visit  https://soe.lk.

The presentation can be accessed here

Watch the full discussion here

Women's Policy Action Network: Closing the Divide on Women's Access through Women's Access to Finance

The Women’s Policy Action Network hosted a conference on the 20th of March 2024, at Courtyard by Marriott on the topic Closing the Divide on Women's Access through Women's Access to Finance. The conference featured a panel discussion on the above topic with panelists who are experts in the relative conversations. The panel discussion covered topics such as the regulation of the microfinance sector in Sri Lanka, and the importance of financial consumer protection.

This discussion was supported by the Kingdom of the Netherlands and facilitated by the Advocata Institute.

Video to the full discussion can be accessed here

The policy brief on Closing The Divide Through Women’s Access To Finance can be accessed here

The presentation can be accessed here

WPAN Policy Brief : Closing The Divide through Women's Access to Finance

Financial inclusion is the access individuals and businesses have to useful and affordable financial products and services that meet their needs, such as for transactions, payments, savings, credit and insurance. They also must be delivered in a responsible and sustainable way promoting engagement in the formal financial sector.  Access to affordable finance aims to enhance living standards, increase income, stimulate business investment, reduce unemployment, and foster economic growth by expanding financial networks and reducing barriers to entry. 

Here is the link to the WPAN Policy Brief on Closing the Divide through Women’s Access to Finance

Media Coverage on Tax Free Periods: Call for the Removal of Taxes on Menstrual Products

Putting the period on ‘taxing’ the period

The imposition of taxes on menstrual hygiene products, needed by women and girls due to a biological process naturally occurring in their body, has been subjected to fair criticism from many parties. While there have been great demands for the Government to remove the taxes imposed on menstrual products and the raw materials needed to manufacture such, such items are currently subjected to a tax rate of 51.07%, and it continues to restrict the access of those menstruating to sanitary products.
Read the full article here

Half number of girls, women do not include sanitary napkins in household expenditures

Due to the affordability of sanitary napkins half the number of girls and women in Sri Lanka do not include sanitary napkins in their household expenditures, the Advocata Institute said. They said the affordability of sanitary napkins and its significant impact on the welfare of girls and women in Sri Lanka has become more pronounced in recent years. This is particularly evident due to the decline in their purchasing powers stemming from the Covid-19 pandemic and the economic crisis. .

Read the full article here

Advocata Policy Brief : Tax Free Periods: Call for the Removal of Taxes on Menstrual Products

The affordability of sanitary napkins and its significant impact on the welfare of girls and women in Sri Lanka has become more pronounced in recent years. This is particularly evident due to the decline in purchasing power stemming from the COVID-19 pandemic and the economic crisis. Approximately 4 million Sri Lankans have descended into poverty since 2019, making the total number of Sri Lankans living in poverty approximately 7 million. Therefore, it is necessary to examine the ramifications of the lack of affordability of sanitary napkins which is worsened by the imposition of high taxes on sanitary napkins.

Here is the link to Advocata’s Policy Brief on Tax Free Periods: Call for the Removal of Taxes on Menstrual Products

Ep 3 | Moving The Needle On Gender Parity | WPAN | Nirmali Ameresekere | Dinali Peiris

Welcome back to another episode of the WPAN podcast discussion series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

This episode features Nirmali Ameresekere (Researcher, Advocata Institute) and Dinali Peiris (Director - Group Human Resources, MAS Holdings). They discussed about the Women Go Beyond program at MAS, and its significant contributions to empowering women locally and globally. The discussion addresses garment worker rights and the importance of parental leave which includes both parental and maternal leave, for working women.

Media Coverage on A Deep Dive into the Market Competitiveness of Ceylon Tea

Advocata Institute unveils insights on enhancing market competitiveness of Ceylon tea

Advocata Institute Research Consultant Sudaraka Ariyarathna shed light on the discrepancy between recommended replanting rate and the actual rate, mentioning that “while the recommended replanting rate stands at 2.5%, our research indicates a significantly lower actual rate,” highlighting the impact on Sri Lanka’s tea production yields compared to other black tea producing nations. This was the opening to “A deep dive into the market competitiveness of Ceylon tea” organised by Advocata Institute which was on 29 February.
Read the full article here

Importance of strengthening estate workers’ economy stressed

The challenges encountered by the upcountry Tamil community is beyond mere daily wages, said Minister of Water Supply and Estate Infrastructure Development, Jeevan Thondaman.

He was speaking at a discussion on “A Deep Dive into the market competitiveness of Ceylon Tea” organised by Advocata Institute at the BMICH on Thursday.

He stressed the importance of enhancing their quality of life by addressing various facets such as housing, land, education, health, and infrastructure.

Read the full article here

ADVOCATA INSTITUTE

Unveils Insights on Enhancing Market Competitiveness of Ceylon Tea

The Ceylon tea industry faces significant challenges which threaten its competitiveness and sustainability in the global market. High labour costs, labour shortages, and inefficiencies in land management are hindering productivity and profitability, while issues pertaining to quality control and the lack of a premiumisation strategy posse further obstacles to unlocking the true potential of Ceylon tea.

Read the full article here

Optimism over securing EU protection for Ceylon Tea

Sri Lanka expressed optimism about securing European Union(EU) protection for Ceylon tea within the next 12-18 months.

Chairman of the Tea Board, Niraj De Mel, emphasised the need to prioritise quality over volume, advocating for a return to basics to improve prices.

Read the full article here

Ep 2 | Empowering Women in E- Commerce| WPAN | Akhila Randeniya | Anishka De Zylva

Welcome back to another episode of the WPAN podcast discussion series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

In this episode Akhila Randeniya (Research Analyst, Advocata Institute) and Anishka De Zylva (Head of Corporate Affairs, Public Policy & ESG at Daraz). They discuss Sri Lanka's ecommerce growth hindered by slow adoption of digital payments and limited logistics connections. The discussion also addresses Sri Lanka's ecommerce growth hindered by slow adoption of digital payments and limited logistics connections.

A Deep Dive into the Market Competitiveness of Ceylon Tea

Advocata Institute hosted an event titled ‘A Deep Dive into the Market Competitiveness of Ceylon Tea’ to launch the report on "Market Competitiveness of the Tea Industry of Sri Lanka" authored by Sudaraka Ariyaratne (Research Consultant, Advocata Institute) The conference consisted of a panel discussion on Land & Labour Reforms : Efficiency Through Liberalisation and Quality Control & Premiumisation : Unlocking the True Potential of Ceylon Tea

Session on 'Land & Labour Reforms : Efficiency Through Liberalisation

The session commenced with a presentation by Sudaraka Ariyaratne, followed by a panel discussion with Hon. Jeevan Thondaman (Cabinet Minister, Water Supply & Estate Infrastructure Development), Dr Roshan Rajadurai (Managing Director, Hayleys Plantation Sector), Dr Romesh Bandaranaike (Former Director, Plantation Management Monitoring Division), moderated by Murtaza Jafferjee (Chair, Advocata Institute)

Session on 'Quality Control & Premiumisation : Unlocking the True Potential of Ceylon Tea’

The session continued on with another presentation by Sudaraka Ariyaratne, followed by a panel discussion with Niraj de Mel (Chairperson, Sri Lanka Tea Board), Dilhan C. Fernando (Chief Executive Officer, Ceylon Tea Services PLC), Dasarath Dassanayake (Former Head, Manufacture High Grown, John Keells PLC Consultant) moderated by Rehana Thowfeek (Research Consultant, Advocata Institute)

The presentation on Land and Labour Reforms: Efficiency Through Liberalisation by Sudaraka Ariyaratne can be accessed here

The presentation on Quality Control and Premiumisation: Unlocking the True Potential of Ceylon Tea by Sudaraka Ariyaratne can be accessed here

Both discussions will be available on our YouTube channel shortly.

Women's Policy Action Network Podcast Series

Welcome to the WPAN Podcast Series!

The Women's Policy Action Network is hosting its latest podcast discussion series, facilitated by the Advocata Institute, supported by the Kingdom of Netherlands. This discussion series delve into crucial topics including empowering women in the labor force via policy adjustments and labor laws, enhancing digital infrastructure, and advocating for social reform in Sri Lanka.

This is our introductory episode where Thathsarani Siriwardana and Akhila Randeniya introduce the series by discussing the events hosted by WPAN and also the launches of the policy brief. They also give insights to the discussions for future podcast episodes.

Check out our first episode where Thathsarani Siriwardana and Isuru Gunasekera give insights on parental leave policies in Sri Lanka. They also touch upon such topics that include implementing parental leave policy in a large organization and childcare outsourcing and maternity benefits in the private sector.

Sir Roger Owen Douglas on Advocata Conversations | Ep.10 | Murtaza Jafferjee | Sir Roger Douglas

We are back with our tenth episode of 'Advocata Conversations!'

This is a series of discussions, where we converse with esteemed industry leaders on policy and economy! With Advocata Conversations we aim to capture insights from experienced policymakers on policy reforms and their impact. This episode is between Sir Roger Owen Douglas, Former Minister of Finance, New Zealand and the Chair of Advocata, Murtaza Jafferjee. In this conversation Sir Roger speaks about his political leadership, policy-making, and legacy. He also discusses the political and economic reforms in New Zealand and addresses tax reforms and the importance of transparency.

Check out our previous episode with Prof Chin-Huat Wong, Deputy Head (Strategy) UN Sustainable Development Solutions Network (SDSN) Asia Headquarters, Sunway University

South Asia Economic Outlook: World Bank | Infrastructure Challenges & Economic Growth | Murtaza Jafferjee | Maurizio Bussolo

In this episode of Advocata Studio, Advocata Chair, Murtaza Jafferjee is joined by Maurizio Bussolo, (Lead Economist, Chief Economist Office for South Asia, The World Bank). In this video he discusses with Murtaza Jafferjee on trade, gender inequality, and economic growth in South Asia, and its impact on productivity. He also addresses the South Asia's economic growth and infrastructure challenges.

Watch the full discussion here:

Maurizio Bussolo, (Lead Economist, Chief Economist Office for South Asia, The World Bank) also presents a report on South Asia's economic outlook, highlighting slowing growth and challenges such as weak private investment and fiscal position.

The presentation by Maurizio on South Asia Development Update: Toward faster, Cleaner Growth can be accessed here