14th December, 2009

IPS launched a new publication on climate change titled ‘Mainstreaming Climate Change for Sustainable Development: Towards a National Agenda for Action’ on 14th December 2009 at the Ministry of Environment and Natural Resources. The report was handed over to the Hon. Patali Champika Ranawaka, Minister of the Environment and Natural Resources, before his departure to the Copenhagen Summit on Climate Change. The Chairman of the IPS, Prof. Buddhadasa Hewavitharana, handed over the report to the Minister.

The publication was authored by Athula Senaratne, Nethmini Perera and Kanchana Wickramasinghe, researchers attached to the Environmental Economics Policy Unit of the IPS. The publication presents findings of a policy analysis based on information from a recently held national workshop, discussions with experts and review of various sources of secondary information. Study highlights that Sri Lanka, being a tropical island with a significant poor population located in a disaster prone region, is highly vulnerable to climate change in terms of physical as well as socio-economic impacts. It presents a review of existing information on climate change in Sri Lanka and effects of global warming on local climate. Accordingly, changes in air temperature, rainfall patterns, extreme events, sea level rise and increased concentration of CO2 in the atmosphere are among the major climate effects that can create impacts over different economic sectors and regions.

The island is likely to face impacts in six major areas of critical importance - agriculture and irrigation, coastal zone, forests and natural eco-systems, human settlements and infrastructure, human health and on energy and industry. The report outlines the impacts on these areas highlighting the relationship between the respective climate effects and their impacts. The information gathered from different sources indicates that four major gaps, namely, lack of agenda and listing of priorities, information gap, coordination gap and, resource mobilization gap act as constraints in formulating effective actions against climate change impacts. While the lack of information, poor coordination and limited resource availability each have their own drawbacks, the lack of a comprehensive agenda overrides them all.

Climate change is a complex challenge. The IPS study stresses the necessity of a ‘National Agenda’ to face this complex challenge. The proposed national agenda covers – a national vision on climate change, a national policy on climate change, a strategic action plan (national strategy), a coordinating mechanism, a climate change information system and a mechanism for resource mobilization. Such an agenda should be aimed at mainstreaming climate change issues within the overall national effort towards sustainable development. Success of a national agenda would largely be determined by the effectiveness of measures taken to overcome the major gaps highlighted earlier.

IPS Chairman's Speech at book presentation

Media Highlights:

http://www.dailynews.lk/2009/12/23/bus02.asp

http://www.island.lk/2009/12/19/business.html

http://www.island.lk/2010/01/04/business8.html

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11 December, 2009

Anushka Wijesinha, Research Officer, IPS made a presentation on “Sri Lanka: SME Sector Growth and Trade Opportunities for SMEs” at the conference on “Trade Opportunities for SMEs among SAARC and ASEAN Countries” organised by TANSTIA-FNF Service Centre and the Friedrich Naumann Foundation in Chennai, India, on 11 December 2009.

The Sri Lanka session was chaired by Minister of Industrial Development, Hon. Kumara Welgama. Participants included government officials, SME experts, and entrepreneurs from the South Asian region, Malaysia, Thailand and the Philippines.

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December 11-12, 2009

The Executive Director, Dushni Weerakoon, Deputy Director, and Suwendrani Jayaratne, Research Assistant, represented the IPS at the 2nd South Asia Economic Summit hosted by the Research and Information System (RIS), New Delhi, India. The theme of this year’s summit was: “South Asia in the Context of the Global Financial Meltdown”

The global financial crisis impacted adversely on the South Asian region when it had barely begun to recover from the severe terms of trade shock resulting from the global food and fuel price hikes. The latter saw current account and fiscal balances and price stability across many South Asian economies weakening sharply as a result. The onset of the global economic downturn, particularly in key export markets for South Asia, has resulted in a significant drop in export earnings across the region. Recent global development has thus re-focused attention on the need to insulate economies from external shocks through greater diversification of export products and export destinations.

The 2nd South Asia Economic Summit focused attention on regional initiatives to face the challenges of the global economic crisis, including initiatives aimed at strengthening regional economic integration. IPS presentations provided several inputs towards the discussion. The Executive Director was a speaker at the session on “Global Economic Crisis and Implications for South Asian Economic Integration and Development” and Chaired a session on “Special and Differential Treatment to LDCs in South Asia”. Dushni Weerakoon, Deputy Director, IPS, presented the theme paper at the session on “Regional Economic Integration: Deepening of SAFTA”. Suwendrani Jayaratne, Research Assistant, IPS, presented a paper on “Vertical Integration of Industries in South Asia” at a session on “South Asian Integration: ADB Case Studies”.

The 2nd South Asia Economic Summit was a follow-up to the 1st South Asia Economic Summit initiated and hosted by the IPS in Colombo during 28-30 August, 2008.

http://www.ris.org.in/saes_summit_2ndprg.htm

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December 3-4, 2009

Executive Director and Deshal de Mel, Research Economist, represented the IPS at the "5th Meeting of RETA 6417 - Supporting Networks of Research Institutes and Think Tanks in South Asia", organized by the Asian Development Bank in Dhaka, Bangladesh on the 3rd-4th December 2009.

IPS presented research proposals on topics including "The Liberalization of Civil Aviation in South Asia: Opportunities and Challenges" and "Trade Facilitation Issues in South Asia" under the SACEPS umbrella for possible funding by the ADB.

November 27, 2009

IPS and Friedrich-Ebert-Stiftung (FES) with the collaboration of the South Asia Centre for Policy Studies (SACEPS) held a Brainstorming Session on the proposed South Asia Migration Commission (SAMC). The objective of the Brain Storming Session was to revise the Draft Concept Paper on the SAMC and finalize it for submission for the 16th SAARC Summit in Thimphu, Bhutan in 2010.

The Welcome Address was delivered by Joachim Schluetter, Resident Director, Friedrich Ebert Stiftung, Colombo. Dr. Saman Kelegama, Executive Director, IPS, made the Introductory Remarks while Sridhar Khatri, Executive Director, South Asia Centre for Policy Studies (SACEPS) made the Opening Remarks. Among the other delegates present were, Farooq Sobhan, President, Bangladesh Enterprise Institute (BEI); S. Irudaya Rajan, Professor, Research Unit India on International Migration, Centre for Development Studies (CDS), India, Rabab Fatima, Regional Representative for South Asia, International Organization on Migration (IOM), Bangladesh; Hussain Niyaaz, Director General, Economic & Development Cooperation Department, Ministry of Foreign Affairs, Republic of Maldives; Sonam Tobgay, Principal Consultant, Bhutan Thimphu Consultants International, Bhutan, Mahmoud Saikal, Former Deputy Foreign Minister of Afghanistan & Senior Advisor to Dehsabz City Development Authority, Kabul.

Concept Paper

Draft Report

Programme

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2-3 November, 2009

A four member IPS team participated at the 5th Anniversary of the ARTNET at the UNESCAP, Bangkok, during 2-3 November 2009. Executive Director of IPS was a discussant at the Plenary Session on the second day and in a parallel session organized by the UNDP-RCC, while Deshal De Mel and Parakrama Samaratunghe were presenters at two parallel sessions.

More details of the IPS teams’ contribution can be obtained from the following weblinks.

http://www.unescap.org/tid/artnet/artnet_conference.asp

http://www.unescap.org/tid/artnet/mtg/con09_ppt.htm

http://www.unescap.org/tid/artnet/mtg/con09_photos.htm

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3rd November 2009

Parakrama Samaratunga, Research Fellow and Head of Agricultural Economic Policy Unit made a presentation on “Sri Lanka: Adapting Trade Policies to Promote Food Security and Sustainable Agriculture” at the “Asia-Pacific Trade Economists’ Conference Trade-Led Growth in Times of Crisis” at UNESCAP, Bangkok, Thailand, on the 3rd November, 2009.

The session organized by the FAO was a forum for the discussion of research studies of South Asian countries on “Adopting Trade Policies to promote Food Security and Sustainable Agriculture”. IPS is conducting the Sri Lankan study which attempts to enhance capability of agricultural trade policy makers in identifying appropriate trade policies and support measures, mainstreaming policies and measuring their impact in terms of meeting national development priorities and finally to mobilize resources through investment.

26th October 2009

Parakrama Samaratunga, Research Fellow and Head of Agricultural Economic Policy Unit made a presentation on "The Impact of Global Economic Crisis on Sri Lankan Agriculture” at the international symposium on "Impact of Financial Crisis on Agricultural and Rural Development in Asia" at Beijing, China on the 26th October 2009.

Proposed outcomes of the symposium include a series of policy briefs and working papers. A special issue of an academic journal and a book will also be forthcoming under the sponsorship of the International Food Policy Research Institute (IFPRI).

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26-27th October 2009

Executive Director and Deshal de Mel represented the IPS at the Asian Development Bank's (ADB) Fourth Meeting on "Supporting Network of Research Institutes and Think Tanks in South Asia Phase II" held at the Institute for South East Asian Studies (ISEAS), National University of Singapore during 26-27th October 2009.

Executive Director made observations on all the papers presented by both South Asia Centre for Policy Studies (SACEPS) and SANEI (South Asia network of Economic Institutes) while Deshal de Mel presented the findings of the IPS study for SACEPS on ‘Vertical Integration of Industries in South Asia”. De Mel’s paper identified the policy measures required to create a feasible environment for vertically integrated production networks in South Asia. The research was funded by the ADB.

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16th October, 2009

The IPS together with the International Organization for Migration (IOM) launched the first edition of the “International Migration Outlook- Sri Lanka 2008”. The report which is based on a study conducted by IPS (by Tilani Jayawardena and Ruwan Jayathilaka), and commissioned by IOM, outlines a comprehensive analysis of the trends, patterns and changes in migration from Sri Lanka in recent years. The report also addresses a longstanding need of streamlining Sri Lanka’s international migration data for better planning and decision making in migration management activities in the country. The Executive Director of IPS delivered the Welcome and Introductory Remarks. Chief Guest at the occasion was Hon. Athauda Seneviratne, Minister of Labour Relations & Manpower. Sunil S. Sirisena, Secretary, Ministry of Foreign Employment Promotion & Welfare was the Guest of Honour.

Highlights in the Media

http://www.dailymirror.lk/DM_BLOG/Sections/frmNewsDetailView.aspx?ARTID=64949

http://www.sundayobserver.lk/2009/10/18/new11.asp

http://www.sundayobserver.lk/2009/10/18/spe16.asp

http://www.dailynews.lk/2009/10/19/bus01.asp

http://www.island.lk/2009/10/21/business1.html

http://www.island.lk/2009/10/20/business6.html

Presentations

Presentation 1

Presentation 2

Introductory Remarks

25th September, 2009

To mark the 60th National Day of the People's Republic of China, the Ceylon Chamber of Commerce, Sri Lanka-China Business Council, and the Sri Lanka-China Friendship Foundation organized a Business Forum on the theme 'China's Road to Economic Success' at the Cinnamon Lakeside, Colombo.

Many dignitaries including the Ambassador of the People's Republic of China, Secretary-General, Colombo Plan Secretariat, Vice Chairman, Ceylon Chamber of Commerce, Parliamentarians, and others, participated at the Forum. The Executive Director of the IPS made a presentation on "Sri Lanka-China Economic Relations: An Overview" at the forum.

Presentation PDF

Highlights in Media

http://www.island.lk/2009/09/28/business1.html

http://www.dailynews.lk/2009/09/28/bus02.asp

http://www.dailymirror.lk/DM_BLOG/Sections/frmNewsDetailView.aspx?ARTID=62736

http://www.island.lk/2009/09/26/business1.html

19-21 August, 2009

The IPS in collaboration with the Ministry of Environment & Natural Resources, and Sri Lanka National Commission for UNESCO organized a workshop on ‘Mainstreaming Climate Change for Sustainable Development in Sri Lanka: Drafting a Strategic Plan to Coordinate National Action’, at Hotel Amaya Lake, Dambulla, during 19–21 August, 2009. The Welcome & Introductory Address was delivered by Dr. Saman Kelegama, Executive Director, IPS. Dr. Nimal Sanderatne, Former Senior Visiting Fellow, Postgraduate Institute of Agriculture, University of Peradeniya was the Chief Guest. Athula Senaratne, Research Fellow & Head, Environmental Economic Policy Unit, IPS, made a presentation on the introduction to the workshop. W.L. Sumathipala, Director, Climate Change Division & National Ozone Unit, Climate Change Secretariat, Ministry of Environment & Natural Resources made a presentation on ‘Science of Climate Change Adaptation’.

Conference in the media

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19 August, 2009

Suwendrani Jayaratne, Research Assistant, IPS, made a presentation on 'Challenges Faced by Trade Facilitation Mechanisms in South Asia' at a seminar on 'Trade Facilitation: Issues and Constraints in South Asia', organized by the SAARC Chamber of Commerce and Industry and the Federation of Chambers of Commerce and Industry of Sri Lanka and sponsored by Friedrich Naumann Foundation, at Colombo Hilton, on 19 August, 2009. Executive Director, IPS, chaired the session which had panelists from the private sector and the academia in South Asia.

7-8 July, 2009

The Executive Director of the IPS was a speaker at a number of sessions at the Regional Conference on “Managing Regional Integration in South Asia” organized by the South Asia Network on Economic Modeling (SANEM) and the Commonwealth Secretariat, UK in collaboration with the Bangladesh Investment Climate Fund (BICF) at the Dhaka Sheraton Hotel during 7-8 July 2009. Many leading economists of South Asia participated in this conference which was inaugurated by the Commerce Minister of Bangladesh.

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24 June, 2009

The IPS in collaboration with the World Bank Resident Mission, organized a one day conference on ‘Protecting The Poor In Sri Lanka: The Role of Safety Nets During Crises And Beyond’ on the 24th of June 2009 at the Ceylon Continental Hotel.

The conference created a forum for discussion of various options available for the Government of Sri Lanka and other development practitioners to support poor households in Sri Lanka to cope with the unfolding impacts of crises. It was essentially an attempt to collate global experiences in using safety nets to fight the impacts of crises and to facilitate a discussion on what options make sense for Sri Lanka in its efforts to protect its poor. Resource persons drawn from the public sector, international organizations, and academia and international experts connected via video conference, highlighted strategies and policies to overcome challenges faced by Sri Lanka. The Chief Guest at the occasion was Dr. Sarath Amunugama, Minister of Public Administration & Home Affairs and the Deputy Minister of Finance.

Dr. Saman Kelegama, Executive Director of the IPS in his introductory remarks stated that market driven economic growth contributes to poverty reduction in most countries, but markets alone cannot play the role of addressing poverty. Public policy plays an important role in providing the institutional foundations, within which markets operate, in providing public goods, and in correcting market failures. In addition to laying the foundation for economic growth, policy can supplement the effects of growth on poverty reduction, and one of the instruments that governments can use to that end is direct redistribution of resources to poor households. It is in this context that the design and implementation of safety nets become important, he stated.

Dr. Kelegama went on to say that the adverse impact of the global financial crisis on living standards in the developing world has given renewed emphasis to the importance of safety nets programmes. He stated that, “the poorest are particularly vulnerable to shocks however small in magnitude. For example, the nature of consumption distribution of Sri Lanka based on national level household data shows that a small shock can push a large number of the population that hovers around the poverty line into poverty, and those who are poor into extreme poverty. An on-going study that explores the impact of natural disasters on the beneficiaries of the Samurdhi safety net programme show that debt levels increase, key productive assets are sold, children are taken out of school, and consumption patterns are changed by households, among other things, to mitigate the impacts of shocks. These adjustments are often difficult to reverse. Current responses that include the right policies have implications well beyond the crisis. Focus should be given to responses that have clear longer-term implications for economic development rather than those that revolve around short-term policies that are ‘populist’ in nature.

Dr. Kelegama also added that crises often create the political space for governments to either improve existing programmes or create new ones. If an adequate safety net exists then it should be supported for protecting the poor. Crises have also presented opportunities for setting up better information systems for monitoring progress and future preparedness. In Sri Lanka, new thinking is emerging on introducing public works programmes, particularly in the context of the rehabilitation process of the post conflict economy in the Northern parts of the country. Sri Lanka stands to benefit from drawing on lessons from examples such as the National Rural Employment Guarantee programme in India.

All these international experiences thus become relevant. There is no single recipe for an effective safety net. Policy makers need to have a clear understanding of the range of options available and choose responses that make the most sense given their country context.

Dr. Kelegama further stated that the conference was essentially an attempt to bring global experiences in using safety nets to fight the impacts of crises to facilitate a discussion on what options make sense for Sri Lanka in its efforts to protect its poor.

Dr. Sarath Amunugama, Chief Guest at the conference, pointed out that the poverty is a problem of resource allocation. He emphasized that managing an economy/resource allocation is a difficult task and it becomes more difficult at times of crisis. The voice of the poor group should be taken into account in the process of investments in safety nets. However, Minister Sarath Amunugama recognized that this does not always happen in Sri Lanka. Most of the poverty related policy forums are not represented by the poor community. As a result, poor people are provided what they actually do not want. The primary requirement of the poor is the accessibility to livelihoods and job creation.

Dr. Amunugama highlighted that labour supply of the community is frozen as a result of safety nets which are not participatory development oriented. For example, he mentioned that currently Samurdhi programme, the government poverty alleviation programme does not have labour contribution component. He argued that safety nets can in fact discourage people from selling their labour and earning money. He pointed out that governments have to choose between investing scarce resources on safety nets or livelihood generating programmes which generate longer term wealth. The Minister made the case that the poor themselves would choose the latter. China, India and Vietnam have implemented these types of growth generating programmes and that is a key reason for the fast development of these countries. According to him, an economically successful country should have a shrinking safety net system rather than the increasing safety net system. Poor people should be allowed to find their employment opportunities and get rid of the poverty.

Mr Shekhar Shah, Regional Economic Advisor, South Asia of the World Bank launched two books namely, “The Design and Implementation of Effective Safety Nets: For Protection & Promotion” and “Conditional Cash Transfers: Reducing Present and Future Poverty” in the inaugural session. He discussed safety nets and its lessons which Sri Lanka can adopt.

During the conference deliberations it became clear that poverty at times of crises can be classified in two ways. That is, chronic poverty, and those who fall into poverty as a result of shocks which cause them to lose their jobs or increase prices of goods and services beyond their reach.

Therefore, reference to livelihoods and negative impacts on labour supply is more relevant to chronic poverty rather than poverty resulting from shocks. Safety nets providing temporary support in the event of negative shocks have limited impacts on labour supply and are in fact necessary to promote long term viability of livelihoods. There is however some interdependence between the two groups (chronic poor and the not necessarily poor populace adversely affected by shocks). The first layer of people affected by financial crises are those who are relatively well off – i.e. those who are employed and send money back to rural homes – and who have now lost their jobs. There is a case for introducing unemployment benefits of a temporary nature to support this layer of the affected. The second layer is the rural poor who suffer a fall in income as there is a drop in money transferred from their kin who have lost jobs are a result of crises. The fall of money transmission to the poorer households affects the chronic poor.

The Benazir Income Support Programme of Pakistan was presented by Mukhtar Ahmad, Director General (Operations), and Pooja Vasudeva Dutta, Economist of World Bank, New Delhi presented the case of the National Rural Employment Guarantee Scheme in India via video conferencing. Several important implications and lessons from the regional experiences in safety nets were made available to Sri Lanka. Particularly the importance of utilising technology in the implementation of safety nets in order to reduce the extent of arbitrary political capture and the importance of community involvement in the design of such programmes.

At the conference it was noted that whilst it is important to learn lessons from international best practices, it is equally important to draw home-grown success stories such as lessons from the positive cases of tsunami response where victims were given bank accounts and all cash that went to them was through the formal financial system.

It was the view of many participants that although policy makers in Sri Lanka have understood the issues and challenges in implementing safety net programmes, there has been a great deal of complacency with regard to addressing the solutions.

http://www.dailynews.lk/2009/07/01/bus20.asp

30 May, 2009

Deshal de Mel (Research Economist, IPS) and Lahiru Pathmalal (Consultant, IPS), made a presentation entitled "Peace and Development: Case Study of Sri Lanka" at the international conference on "Peace and Development" at the Laico Umubano Hotel in Kigali, Rwanda on the 30th of May 2009.

The conference was a forum for the discussion of the initial drafts of 7 country case studies on political and economic policy requirements to ensure sustainable peace in a post conflict environment. IPS is conducting the case study for Sri Lanka which examines the options for political devolution of power and the macroeconomic and microeconomic policy measures that are required to support post conflict recovery and sustainable peace in Sri Lanka. The project is coordinated by the Centre for Developing Area Studies, McGill University, Montreal, Canada, and the World Bank, Washington D.C.

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4-5 May, 2009

The Institute of Policy Studies of Sri Lanka (IPS) and Friedrich-Ebert-Stiftung (FES), Colombo, jointly organized an international conference on “Migration, Remittances and Development Nexus in South Asia” at the Taj Samudra Hotel during 4-5 May, 2009. Hon. Prof. G.L. Peiris, Minister of Export Development and International Trade, graced the occasion as the Chief Guest, and Prof. Farooq Sobhan, President, Bangladesh Enterprise Institute (BEI), Bangladesh, attended as the Guest of Honour.

An increasing number of institutions are involved in evaluating the migration and development linkage. Even though many conferences are held and more papers are written on the subject, focusing on the effects of migration on destination countries, the links between migration and development issues in the sending countries have been somewhat neglected, particularly as far as empirical research is concerned On the other hand, development impact of migration depends on the economic policies in home countries and destination countries. Economic policies need to be developed to maximize the impact of migration and remittances. Detailed information on the relationship between development and migration is therefore important in designing such policies in home and destination countries.

In such context, the conference focused on the relationship between development, migration, and remittances. Given the importance of remittances in South Asia, the conference examined the role of remittances and migration in each South Asian country in order to better understand the channels through which remittances and migration have an economic and social impact and share lessons that individual South Asian countries could learn from each other. The conference provided an open forum for discussion and debate among policy makers, researchers and civil society organizations from South Asia.

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30-31 March, 2009

The Institute of Policy Studies of Sri Lanka (IPS) and the UNDP Regional Centre in Colombo (UNDP-RCC), jointly organized an international conference on: “Broadening Economic Integration in South Asia: Incorporating Services Liberalization at a Time of Global Economic Crisis” at the Taj Samudra Hotel during 30 - 31 March, 2009. Hon. Prof. G.L. Peiris, Minister of Export Development and International Trade, graced the occasion as the Chief Guest, and Mr. Nihal Rodrigo, Advisor to H.E. the President on Foreign Affairs & former Secretary General – SAARC, attended as the Guest of Honour.

Dr. Saman Kelegama, Executive Director, IPS, made the welcome and introduction to the conference, and Mr. Omar Noman, Head UNDP-RCC and Chief of Policies and Programmes, UNDP Regional Centre for Asia and Pacific, made the opening remarks. The latest publication edited by the IPS, Executive Director, and published by Sage Publications, India, titled: “Trade in Services in South Asia: Opportunities and Risks of Liberalization” was launched during the inauguration. The book is an attempt to capture some of the key interests – both offensive and defensive - of different South Asian countries with regard to liberalization of trade in services.

The key objective of the conference was to facilitate informed discussion and consultations on the way forward for the SAARC countries’ engagement in trade in services negotiations. The conference was a first of its kind and sought to develop broad contours of a plausible negotiating agenda for liberalizing trade in services which can have beneficial employment and human development impacts in the region. The papers prepared by eminent resource persons drawn from across the region and outside the region shed light on the challenges ahead, and serve as key inputs for negotiators. Furthermore, the conference served as a forum for other stakeholders in civil society, government, academia and the private sector to debate contending views on this topical issue.

The overall result of the conference would see South Asian policy makers having a better understanding of the different interests in liberalization of services, and as a result help policy makers to approach the negotiations in a more productive and useful manner.

Dr. Saman Kelegama, in his opening remarks pointed out that it is essential that multi-sectoral dialogue and debate takes place with key stakeholders to gain a strong grasp over a country’s offensive and defensive interests prior to embarking on negotiations. This, he said, will ensure that commitments are made in areas of potential benefits, and market access can be sought in areas of export interest.

He further added that:

• Factor markets in South Asian countries are imperfect and inflexible, particularly labour markets. Therefore there are potential medium term negative impacts of exposure to competition which could result in medium term unemployment. These costs need to be balanced with the long-term benefits of liberalization and exposure to competition

• An effective but un-cumbersome regulatory regime is essential to address the need for protecting domestic interests (in terms of ensuring quality services for consumers) without creating undue hindrances to trade.

• Data on services and trade in services is very limited in South Asia, and the lack thereof makes it difficult for negotiators to fully identify the interests and needs of different service sub-sectors. Therefore, reliable data on services is essential to identify the scope for collaboration and cooperation within the South Asian region.

The Hon. Minister in his speech highlighted some of the practical issues relating to trade in the context of an economic crisis. He stressed the fact that despite no fault of the products exported by Sri Lanka, due to falling demand in import markets (mainly EU and USA), export earnings have been declining in recent months. This was particularly the case in sectors such as ready-made garments and ceramics – which continue to produce the highest quality goods with the best of labour/environmental practices, and yet have found it difficult to continue to export at previous levels.

The Hon. Minister also highlighted the following:

• Importance of diversification of both export markets and export baskets. Therefore, the importance of liberalizing trade in services in South Asia becomes paramount in achieving both objectives. Furthermore, given the significance of services in all South Asian economies (services account for about 55 per cent of South Asian GDP), it is essential that this sector is not excluded from SAFTA.

• Some examples where there is potential for regional cooperation to increase trade in services -- Tourism is one such area – reference for instance was made to cooperation to provide a package for tourists from outside the region to enjoy both the Himalayan mountains and the beaches of Southern India, Sri Lanka and the Maldives.

• Similarly the potential for cooperation and trade in energy services, given the abundance of water resources in Nepal and Bhutan provide scope for hydro electric power generation which could be traded across the region – however thus far, these resources have not been fully made use of.

• Use of the 5th Freedom to improve air connectivity in the region. In this regard, there are negotiations taking place on a Colombo-Kathmandu flight via Delhi.

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Summary Report

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18 March, 2009

IPS and the World Bank, Sri Lanka, organized a one day conference on “World Development Report 2009 -- Reshaping Economic Geography: Implications for Sri Lanka” on the 18 March, 2009 at the Galadari Hotel, Colombo. Hon. Sarath Amunugama, Minister of Public Administration and Home Affairs, and Deputy Minister of Finance attended as the Chief Guest. Dr. Saman Kelegama, Executive Director, IPS, made the welcome and introductory remarks, and Ms. Naoko Ishii, Country Director, World Bank, made the opening remarks. The World Development Report (WDR) 2009 was introduced by Indermit Gill, Team Leader, WDR 2009, followed by an analyses of the report by experts.

As economies grow from low to high income, production becomes more concentrated spatially. As countries develop, the most successful ones also institute policies that make living standards of people more uniform across space. The way to get both the immediate benefits of the concentration of production and the long-term benefits of a convergence in living standards is economic integration. Although the problems of economic integration defy simple solutions, the guiding principle does not have to be complex. The policy mix should be calibrated to match the difficulty of the development challenge, determined by the economic geography of places. Today, policy discussions about geographic disparities in development often start and end with a consideration of spatially targeted interventions. The World Bank’s WDR 2009 reframes these debates to include all instruments for economic integration—institutions, infrastructure, and incentives.

The Conference “World Development Report 2009 -- Reshaping Economic Geography: Implications for Sri Lanka” examined these issues from a Sri Lankan perspective. Regional disparities in economic development are a critical development issue in Sri Lanka. The country has long seen economic growth and prosperity concentrated in the Western Province whilst other provinces have failed to live up to potential.

Overall, the sessions examined why production becomes more concentrated spatially as economies grow, how economic integration can be used to promote spatial transformation, revisit the debates on urbanization, territorial development, and regional development. Sessions I and II in particular mapped and examined in detail the extent, causes and solutions to regional disparities in development in Sri Lanka, followed by a discussion on the education sector, as a case study on this subject.

IPS researchers served as resource personnel at the conference, drawing extensively on the research in the areas of Education, and Spatial Disparities undertaken by the Institute.

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Media Highlights

Lanka Business Online, 18 March, 2009-- “Sri Lanka must link leading region to rest of Country: World Bank”

18 February, 2009

The IPS organized a one day seminar entitled, “The Global Economic Crisis and Sri Lanka” on 18 February, 2009 at the Taj Samudra Hotel, Colombo. Hon. Dr. Sarath Amunugama, Minister of Public Administration and Home Affairs, and Deputy Minister of Finance, attended as the Chief Guest. Dr. Saman Kelegama, Executive Director, IPS, made the welcome and introductory remarks, while Ms. Naoko Ishii, Country Director, World Bank, made the opening remarks.

The seminar contributed to the debate on the impact of the current global economic crisis on Sri Lanka from a macroeconomic perspective. The seminar assessed the global financial and economic crises, its impacts on the region and on Sri Lanka in particular. Several key issues with regard to responding to the global economic crisis were highlighted during the seminar.

Despite the optimism that has been expressed with regard to Sri Lanka’s limited exposure to the crisis, it was made clear that such optimism is misplaced given the continued evolution of the crisis and the uncertain economic climate that prevails. In this context, it is essential that all countries take stock of the realised and potential impacts that may manifest. The importance of tailoring solutions to each country’s specific conditions was highlighted, emphasizing the inapplicability of “cookie cutter” solutions based on the response of other countries. The crisis has also shed light on windows of opportunity and positives ­ for instance the reduction in commodity prices, the opportunity and rationale for reform in key sectors such as fiscal and monetary policy, factor markets and reforms to safety nets. It was emphasized that any policy response to the crisis must distinguish between long term, short term and medium term measures ­ all within a framework of a long term vision for the country’s economic direction.

Resource persons drawn from the public sector, private sector, academia and international organizations highlighted strategies and policies to overcome challenges faced by the Sri Lankan economy in the crucial coming months. In addition, resource persons from Mumbai and Karachi participated in the discussions live, via video conferencing.

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Media Highlights

The Island, 25 February, 2009-- Global Economic Crisis deeper than expected……”

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2 February, 2009

Executive Director spoke at the inaugural session and at the session on ‘Common South Asian Position on Institutional Reforms in Global Trade Regime’ at the conference on “A Southern Agenda on Global Trade Governance: Some Views and Concerns from South Asia”.

The conference was organized by the South Asia Network on Economic Modelling (SANEM) and CUTS International, and was held at Sheraton Hotel, Dhaka.

7 January, 2009

The “Report of the Committee to make Recommendation on Development and Management of Estates Leased out to Regional Plantation Companies” was handed over by the Chairman of the Committee to the Minister of Plantation Industries, Hon. D.M. Jayaratne on 7 January, 2009 at the Ministry of Plantation Industries.

The Committee was appointed by H.E. the President as per Cabinet decision of August 2007. The Committee was headed by Neville Piyadigama and consisted of 10 members.

Executive Director represented the IPS in the Committee. One Chapter of the report was prepared by the IPS and inputs were made by Jayanthi Tennakoon and Dharshini Premaratne.

The Island, 12 January, 2009 — “Presidential Committee Highlights Burning Issues of RPCs