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251990 - 2015

ReportAnnual

2014

Contents

About IPSOur VisionOur ResearchOur Governing Board

02 - 06Highlights2014

08 - 10Executive Director’sReport

The Six ThematicDirections

Policy Eff iciency andCompetitiveness 12 - 18

Migration andDevelopment 19-21

Human Resources forSustained Development 22-25

Private SectorDevelopment 26-28

Poverty and Vulnerability 29-33

Environment, Natural Resources andAgriculture 34-40

41Senior Research Staff

42Junior Research Staff

43IPS Research InternProgramme

44 - 45TTI Funded Events/Programmes

46Support ServicesSupport Unit HeadsSupport Unit Staff

Finance andAdministration 47

CommunicationsOutreach 48-49

Library 50 - 51

Information Systems 52

53IPS Publications 2014

54 - 55Staff Achievements

56In-House Seminars

57IPS EventsEvents Organized by IPS 57ED’s Participation atConferences 58

Research Staff Presentations in 2014Domestic 59 - 60Overseas 61 -62Going Beyond Research 63

64Financial Statements

07Chairman’s Message

01 12

11Executive Director andHeads ofMain Research Units

1ANNUAL REPORT 2014

About IPS

IPS is an autonomous institutionthat aims to promote policy-oriented economic research and tostrengthen the capacity formedium term policy analysis in SriLanka.

Our Vision is to be a globally-recognized research institute thatis catalyst for Sri Lanka’s socio-economic transformation.

Our Research Programmes, asof 2011, are on six broad thematicareas. Reflecting a shift towards aholistic, multi-angle researchapproach, the research studiesembarked on this year have thus,been separated not via Unit butvia thematic direction. The sixthematic directions are as follows:

· Policy Eff iciency andCompetitiveness

· Migration andDevelopment

· Human Resources forSustained Development

· Private SectorDevelopment

· Poverty and Vulnerability

· Environment, NaturalResources andAgriculture

The IPS research programme isf inancially supported by theInstitute’s funds as well asexternally funded throughcollaborative projects with bothdomestic and internationalpartners.

Our Governing Board

Prof. W. D. Lakshman, Chairman

Secretary to the Treasury (ex-off icio),Governing Board Member

Governor - Central Bank (ex-off icio),Governing Board Member

Director - General, Department ofNational Planning (ex-off icio),Governing Board Member

Prof. S. G. Liyanage,Sanasa University, Kegalle,Governing Board Member

Dr. D. M. Ajith Dissanayake,Senior Lecturer,Faculty of Economics,University of Kelaniya,Governing Board Member

Dr. Lalithasiri Gunaruwan,Senior Lecturer,University of Colombo,Governing Board Member

Dr. Saman Kelegama,Executive Director

2 ANNUAL REPORT 2014

Highlights for 2014

JANUARY

Dr. Saman Kelegama, Executive Director, IPS was the Keynote Speaker at the ‘Invest in East’Forum, the f irst international investment promotion event focusing on Eastern Sri Lanka. Foreigninvestors representing over 25 countries in addition to top government off icials were present atthis forum.

MARCH

Dr. Saman Kelegama, Executive Director, IPS spoke on Gamani Corea’s Contribution to GlobalCommodity Price Stabilization at the Special Tribute Seminar in Honour of Dr. Gamani Coreaorganized by the South Centre in Geneva.

A delegation led by Mr. Qin Yucai, Director General, Department of Western Region Development,National Development and Reform Commission of P. R. China (NDRC) met with Executive Director,IPS, and Janaka Wijayasiri, Research Fellow, IPS, to discuss ‘Economic Belt Along Silk Road’ and‘Silk Road on Sea (Maritime Silk Road - MSR)’ based on the idea to improve maritime connectivityand common development.

FEBRUARY

3ANNUAL REPORT 2014

Highlights for 2014

JUNE

APRIL

A seminar organized to pay tribute to late Dr. Gamani Corea by the Gamani Corea Foundation(GCF), IPS and the Marga Institute on ‘Dr. Gamani Corea’s Contribution to Domestic & InternationalEconomic Policy’, was held at the IPS Auditorium in April.

The World Conference for Youth (WCY) 2014 held in Colombo concluded with the aim ofmainstreaming youth in the post-2015 development agenda. The IPS was a part of the conferenceboth as a key knowledge partner as well as a resource partner. Chatura Rodrigo, IPS ResearchEconomist, chaired the Publications Subcommittee of the WCY which overlooked the preparationand dissemination of all publication material in the conference. He also participated as a panelistat the round table session on ‘Poverty Eradication and Food Security’.

MAY

Dr. Dushni Weerakoon (Deputy Director) and Dr. Nisha Arunatilake (Fellow) participated at theFourth Regional Meeting of the Think Tank Initiative (TTI-RM4). The focus of this meeting heldduring 9-10 June in Kathmandu, Nepal, was on the needs for and the ways of greater cooperationamong think tanks in the region.


Highlights for 2014

SEPTEMBER

With the aim of developing research agenda on Migration and Development the IPS organized astakeholder meeting to prioritize research themes and issues to better cater to developmentpriorities and policy requirements of Sri Lanka.

The IPS organized a conference on ‘Policies for Mainstreaming Migration into Development inSri Lanka’ as a component of the IPS project Meeting the Development Challenges of Migration(MED_MIG). It is funded by the Think Tank Initiative (TTI) - a multi-donor programme managedby Canada’s International Development Research Center (IDRC).

AUGUST

The IPS, in collaboration with the Ministry of External Affairs organized a regional workshop on‘Establishing a Centre of Excellence on Ocean Sciences and Environment for the Indian OceanRim Countries’ in Colombo. The main objective was to establish a network among relevantinstitutions based in member countries to exchange and share ideas in relation to ocean sciencesand environment.

JULY

5ANNUAL REPORT 2014

Dharshani Premaratne, Research Off icer presented the ‘Key Findings of the Study on China-SriLanka Free Trade Agreement’ at a seminar organized by the Ceylon Chamber of Commerce. Theaim of the Seminar was to disseminate the research f indings of the study conducted by the IPSand to provide a forum for discussion about the potential areas that need consideration under theproposed China-Sri Lanka Free Trade Agreement.

OCTOBER

Dr. Saman Kelegama, Executive Director, IPS, made a presentation on the 3rd MillenniumDevelopment Goals Sri Lanka draft report prepared by the IPS team on UN Day at the UN Missionin Colombo. The IPS research team consisted of Wimal Nanayakkara, Dr. Ganga Tilakaratna,Sunimalee Madurawala, Chatura Rodrigo, Ashani Abayasekera, Suwendrani Jayaratne, AyodyaGalappattige, and Yolanthika Ellepola. With the support of the MDG Steering Committee Chairedby Dr. S. Batagoda, Deputy Secretary to the Treasury, the IPS published the report in late 2014.

Highlights for 2014

NOVEMBER

IPS and InterAnalysis Ltd. jointly organized a f ive day workshop on ‘Trade Analysis andEconomic Integration in Pakistan-India Relations: The Regional Dimension’. The workshop dis-cussed regional trade issues within SAARC drawing on work completed by participants whoattended previous workshops in Delhi, Islamabad, and Kathmandu. The key objective of the work-shop was to introduce the Tradesift software, developed by the InterAnalysis Ltd. in Sussex Uni-versity, and introduce the use of it in trade policy analysis in the region.


A Round Table discussion titled ‘Digital Dynamism’, took place at the IPS Conference Roomwith the aim of shaping a new narrative around innovation and entrepreneurship in the country.The discussion held in partnership with Google, brought together entrepreneurs featured in aseries of case studies compiled by IPS together with Google Asia-Pacif ic as a follow up to apreviously published IPS Working Paper called ‘Fostering Innovation to Fast-forward Growthin Sri Lanka.’ ‘Digital Dynamism’ was a platform to share insights on initiatives that are takingadvantage of digital tools to disrupt traditional models.

DECEMBER

Highlights for 2014

Dr. Saman Kelegama, Executive Director, IPS, delivered the Inaugural Gamani Corea MemorialLecture organized by the Gamani Corea Foundation on 3rd November 2014 at the LakshmanKadirgamar Institute of International Relations and Strategic Studies (LKIIRSS). Dr. Kelegamadelivering the lecture on ‘Recent Trends in International Trade: Implications for Sri Lanka’,honoured late Dr. Corea for his immense contribution to economic policymaking.

7ANNUAL REPORT 2014

Message from the Chairman

Prof. W. D. Lakshman

The Institute of Policy Studies ofSri Lanka (IPS), having served thenation in the f ield of policyresearch over the last threedecades, now stands tall amongSri Lanka’s research institutionsas a strong and matureorganization. I have beenassociated with the Institute fromits very inception, f irst as Boardmember and in the last severalyears, as its Chairman. It was witha great sense of satisfaction that Iobserved its gradual developmentand progress to become a highlyrespected policy research institutein the whole of South Asia. Istepped down from the positionof its Chairman at the end of 2014with a feeling of myself havingbeen able to contribute evenmarginally to this institutionalachievement over the years.

I may refer to the highlights ofthe Institute’s programme ofactivities during 2014, the yearcovered by this Annual Report.Action taken in the previous yearto launch the IPS Trust Fund andto prudently invest the Institute’sreserves has helped the

management to commence thenew year with assurance andconf idence over the Institute’sf inancial strength. As this reportdescribes, the year under reviewhas produced a rich harvest ofeconomic policy research carriedout by the Institute staff in sixthematic areas– policy eff iciencyand competitiveness, migrationand development, humanresources for sustaineddevelopment, private sectordevelopment, poverty andvulnerability and environment,natural resources and agriculture.There has been furtherimprovement, compared toprevious years, in the Institute’srecord of publications, led thisyear also by its annual flagshippublication of the State of theEconomy report. The severalmajor conferences organized bythe Institute helped in furtherenhancement of its domestic andinternational reputation. Thegradual development of itsprofessional staff, in terms of bothnumber and quality, that could beobserved over the past, continuedin 2014 as well.

Congratulating the managementover all these achievements, letme conclude this message byrecording my appreciation of theservices of the Board of Governorsin guiding and overseeing theactivities of the Institute duringthe period under review. TheExecutive Director has providedthe management leadership to

the IPS with vision, commitmentand eff iciency, and very effectivelyplayed the role of representingthe Institute in the world externalto the IPS. The Institute is in theprocess of further strengtheningas an economic policy researchinstitution enjoying the improvedand improving conditions of self-reliance in f inancial and otherspheres. The policy makers, I amsure, would be able to looktowards the IPS with greaterconf idence in the years to comeas a policy research entityequipped with improved andstrengthened institutionalcapacity, supported by itscompetent human resource base.

Professor (Emeritus) W. D. LakshmanChairman

July 2015


Executive Director’s Report

Dr. Saman Kelegama

The IPS will celebrate its silverjubilee this year (2015). Lookingback at the past 25 years, I can sayconf idently that the Institute isnow well established with the keysystems in place. It can easilyfunction in diff icult times,withstand external shocks, and hasresilience built-in to its structure.Its positioning among similarresearch institutes in Sri Lankahas no comparison as it remainsthe market leader in many areas ofeconomic policy research. The factthat many staff members who gooverseas for training return backto the IPS provides ampletestimony for the Institute’spositioning and stability.

IPS asset base at LKR 572 million isnow strong enough to support itsroutine operations. The IPSEndowment Fund together withIPS Reserves and TTI (Think TankInitiative) grant, form the base ofits f inancial resources. During theyear, 34 projects were gained and38 projects were completed.Overall project income amounted

to LKR 85.5 million in 2014. Beinga recipient of the TTI 2 was a greatsupport to the Institute. Out ofthe completed projects, 11 werefunded by the TTI while 03 of thenew projects are funded by theTTI. Our valued partnership withthe TTI is elaborated elsewhere inthe Annual Report.

Streamlining our income sourcesbecame a priority in 2014. At a

time when interest rates werelow, we had to prudently investour savings to obtain themaximum return to the Institute.In 2013, the Trustees of theEndowment Trust Fund made aprudent investment to obtain ahigh return to the IPS. Likewise,an Investment Policy Frameworkwas developed in 2014 to planinvestments of our reserves inhigh yielding assets to give goodreturns to the Institute. Whilethese investments gave highreturns, the Institute also saw therent income from the auditoriumexceeding LKR 1 million for thef irst time in 2014. Overall revenueof the Institute amounted to LKR134 million which allowedmaking a marginal prof it of LKR745,000.

For the last three years, threeissues have featured prominentlyat the IPS Governing Board, viz.,formation of the Trust Fund,seeking approval for the IPSManual of Operation from theMinistry of Finance andPlanning, and converting the IPSland from a long-term lease to afreeholding as per the originalPresidential directive. Trust Fundwas formed in 2013 and its f irstreturn came to the IPS in 2014.After a long delay, the approval ofthe IPS Manual of Operation wasmade by the Ministry of Financeand Planning in 2014 and this wasa great relief for the smoothoperation of the Institute. Thematter concerning the IPS land isprogressing well and we arelooking forward to a positiveoutcome before end 2015.

Looking back atthe past 25 years, I

can sayconfidently thatthe Institute is

now wellestablished withthe key systems

in place.

‘

‘

9ANNUAL REPORT 2014

IPS brought out 13publications

during the yearwhich includedone book, two

journals, and theState of the

Economy report.

The Board was reconstituted inFebruary 2014 with thereappointment of the Chairmanand the economist of theUniversity of Colombo and twonew appointments from theUniversity of Kelaniya and theSanasa University. However, theBoard will be again reconstitutedwith the change of governmentin 2015. In early 2014, the IPS Actwas amended giving the powersto the Governor of the CentralBank of Sri Lanka to appoint hisrepresentative from the Bank todeputize for him.

Three major conferences wereorganized by the IPS in 2014. Theywere the Gamani CoreaFelicitation event, launch of theIndian Ocean Centre for OceanSciences and Environment, andan international seminar onMigration and Development.With the Ministry of ExternalAffairs, the IPS launched theCentre for Excellence for OceanSciences and Environment inmid-2014. The Centre nowoperates from the IPS and thef irst project was initiated in late2014. The usual in-house seminarstook place with 15 of themorganized during the year. IPSresearchers participated in anumber of international seminarson WTO Post-Bali follow up, 10th

ARTNET Anniversary Conferenceat ESCAP, 14th Ministerial of theIndian Ocean Rim Association,and so on.

IPS brought out 13 publicationsduring the year which includedone book, two journals, and theState of the Economy report. A

new website was launched inmid-2014 and it received over55,000 hits during 3 months ofoperation in 2014. Our blogposting Talking Economicscarried 41 articles, while socialmedia also showed impressiveoutreach: Facebook reached 1100likes, followers of Twitterrecorded 850, YouTube subscriberswere at 81,and Flicker carried over500 photos.

Two former IPS staff membersrejoined the Institute aftercompleting their higher studiesoverseas (Bilesha Weeraratne and

Ayoni Rangala). Four researchstaff members left the Institute forhigher studies/other jobs/personal reasons (Ayodya

Three majorconferences wereorganized by theIPS in 2014. Theywere the GamaniCorea Felicitation

event, launch of theIndian Ocean

Centre for OceanSciences and

Environment, andan international

seminar onMigration andDevelopment.

‘

‘

Galapatti, Chandana Karunaratne,Yolanthika Ellepola, and AnushkaWijesinha). The middle level staffpositions were strengthened. TheInstitute created a new positionfor Communication and StrategicOutreach where communication,social media, web, and otheroutreach activities were fullyintegrated and a new recruitmentwas made in late 2014.

Three staff members were selectedto the USIS International VisitorProgramme (Janaka Wijayasiri,Suwendrani Jayaratne, and RaveenEkanayake) and one staff memberwas felicitated for heroutstanding performance onresearch work by both local andinternational institutions(Kanchana Wickremasinghe).Two IPS staff members played akey role in the Global YouthConference, 6 IPS staff membersparticipated in the 7th South AsiaEconomic Summit and the IPSwas represented in the AsianThink Tank Conference. The IPSwas invited to make contributionsto the 25th Anniversary of theHambantota Chamber of

‘

‘



Commerce and Industry, AGM ofthe Sri Lanka Hospitality Industry,and the f irst Gamani CoreaMemorial Lecture.

A Senior Lecturer of the Faculty ofMedicine, University of Colomboworked on three UNICEF projectsas a Visiting Fellow of the IPSduring the year (Dr. ManujWeerasinghe). The f inal MDGreport of Sri Lanka was completedin 2014, however its release wasdelayed by the Ministry ofFinance and Planning and theevent f inally took place in early2015. Eight Project Interns alsoworked during the year.

The HR Division saw a number ofchanges – a time tracking systemwas introduced. The librarycompleted its digitalization work.A storeroom was constructed atthe ground level to be an archivefor all the important documentsand grey material both of thelibrary and research staff. Adecision was also taken to makean investment on upgrading ourcomputer system servers. Todaythe facilities we have offered inthe IPS are world class. One needsto be an outsider to appreciatethese facilities.

The IPS would like to put onrecord its appreciation of theservices rendered by Prof. W. D.Lakshman who relinquished hisposition as the Chairman of theIPS in January 2015. Prof.Lakshman was a founder memberof the IPS who was appointed asthe Chairman in 2010. He was thef irst Chairman to occupy the newhead off ice of the IPS and served

Three staffmembers wereselected to the

USIS InternationalVisitor Programme(Janaka Wijayasiri,

SuwendraniJayaratne, and

Raveen Ekanayake)and one staffmember was

felicitated for heroutstanding

performance onresearch work by

both local andinternationalinstitutions(Kanchana

Wickremasinghe).

‘

‘the Board for little over 4 yearsand rendered yeoman service tothe Institute. The IPS Auditorium,the Endowment Trust Fund, etc.,came into operation during hischairmanship. He interacted withthe staff at various get togetherprogrammes and they will misshis association in the comingyears.

Like in previous years, I would liketo thank the Chairman,Governing Board, the Audit

Committee, and the IPS staff forextending to me their support tosteer the Institute to greaterheights in 2014.

Saman KelegamaExecutive Director

July 2015


11ANNUAL REPORT 2014

Executive Director and Heads ofMain Research Units

Athula Senaratne,PhD (Deakin)Fellow/Head of EnvironmentalEconomic Policy

Ganga Tilakaratna,PhD (Manchester)Fellow/Head of Poverty andSocial Welfare Policy

Nisha Arunatilake,PhD (Duke)Fellow/Head of Labour,Employment, and HumanResources Development Policy

Dushni Weerakoon,PhD (Manchester)Deputy Director and Fellow/Headof Macroeconomic Policy

Janaka WijayasiriPhD (Monash)Fellow/Head of InternationalEconomic Policy

Saman KelegamaD.Phil (Oxon),Executive Director


The Six Thematic Directions

Policy Eff iciency and Competitiveness

The process and institutionalarrangements that underpinpolicy eff iciency are criticalfactors in overcomingeconomic and political barriersto growth and development.Policy eff iciency can ensurethat diff icult but necessaryreforms are identif ied,prioritized, initiated,implemented, and sustainedover time. In view of Sri Lanka’scurrent demographictransition, higher growth willhave to come from improvedlabour productivity andeff iciency, encompassing agamut of regulatory reforms toraise competitiveness andinstitutional capacity in theeconomy. This calls for policiesthat will allow for areallocation of factors ofproduction; diversif ication,upgrading, and deepening ofthe production and exportbaskets; and use of newproduction methods andprocesses and different inputs.

Macroeconomic Policy

Sri Lanka State of theEconomy 2014

While there seems littledisagreement that Asia willcontinue to be a dynamic centreof global growth, the pace atwhich countries in the region willgrow to lay claim to a collective‘Asian Century’ is subject toconsiderable debate. Ageingpopulations, rising wages andother costs, environmentdegradation, and a prolonged andweak recovery in developedeconomies are only some of thechallenges facing the region. ForSri Lanka, the prospect of aninvigorated Asia is clearlyimportant as the country seeksnew development partners,markets, and investors in its post-war economic expansion efforts.

The Sri Lanka: State of theEconomy 2014 argues that, whilethe Sri Lankan context is nodoubt different, and following theAsian trajectory identically maynot be feasible or desirable, thereare salutary lessons to draw fromAsia’s rise, both for Sri Lanka’sown development journey but alsoin understanding how to bestlatch on to it. Pursuing policiesthat temper growth withsustainable resource management,and instituting reforms thatenhance productivity in driving

· Sri Lankan Economy LookingGood, But in Need of Long Gameby Dushni Weerakoon

· The Credit Dilemma: Monetaryand Financial System Stability inSri Lanka by Dushni Weerakoon

· Making Monetary Policy Work inSri Lanka by Dushni Weerakoon

· The Economics of Sri Lanka’sMid-term Elections by DushniWeerakoon

· Impact of Oil Price Shocks on theEconomy of Sri Lanka by NisalHerath

economic growth will assure SriLanka a better chance to meet itsinterlinked goals of sustainedeconomic prosperity and socialharmony. A number of chaptersfrom the Report were brought outas policy briefs as well asnewspaper articles. During theyear, the following chapters/articles/blogs were written on themacroeconomy:

‘

‘1


Structural PolicyReforms

Reducing RegionalDisparities: AnnualReport of the FinanceCommission of Sri Lanka

IPS was commissioned by theFinance Commission (FC) tocompile their 2012 Annual Reportwhich focuses on the distributionof funds among provinces andtheir impacts on reducingregional disparities. The report,themed ‘Reducing RegionalDisparities’, analyzes thedistribution of funds amongprovinces, and the performance ofprovinces/districts in differentsectors based on identif iedoutput and outcome indicators.The sectors analyzed includeeducation, health, agriculture,livestock, f isheries, roads,irrigation, energy and tourism.The analysis also attempts toevaluate the distribution of fundsbased on factors such as povertyand population. The Report wascompiled by Nisha Arunatilake,Suwendrani Jayaratne, DharshaniPremaratne and SamanthiBandara with counterpartfunding from the Think TankInitiative.

Trade, Investmentand Finance

Firm Use of FTAs in SriLanka: An Analysis of theIndia-Sri Lanka FTA andthe Pakistan-Sri LankaFTA

With multilateralism on ‘pause’,regionalism - as evident by theproliferation of bilateral andregional trading arrangements -has been forging ahead. In SouthAsia, Sri Lanka has been an activeproponent of regionalism,hopping on the ‘bandwagon ofregionalism’ with the signing ofthe India-Sri Lanka FTA (ISFTA)in 1998 and subsequently thePakistan-Sri Lanka FTA (PSFTA)and the South Asia FTA (SAFTA)in 2002 and 2004, respectively.Past studies highlight that at themacro-level, Sri Lanka is reapinggains from the ISFTA and PSFTAthrough increased utilization ofthese agreements. However, tofully realize benef its, it isfundamental to enhance FTAutilization at the f irm-level. Inthis regard, the objectives of thestudy are to assess the currentf irm-level utilization of the twoagreements and analyze f irm-level characteristics/determinantsto offer policy prescriptions thatwould promote further utilizationof these agreements. This studywas carried out by RaveenEkanayake, Chatura Rodrigo andNipuni Perera with funding fromthe South Asia Network ofEconomic Research Institute(SANEI).

Study on Sri Lanka -China Free TradeAgreement

Both Sri Lanka and China haveagreed to embark on a Free TradeAgreement, which hopes to openup their respective markets. Innegotiating an FTA, it isimperative that the agreementcovers a substantial number oftariff lines and trade as well asaddress non-tariff barriers thatmay hinder export expansion andaffect the benef its ofliberalization. In the absence of astudy on the implications of anFTA with China, the IPS togetherwith the private sector of thecountry represented by thevarious chambers of commerce,initiated a study – a f irst of itskind - on the issue. The study wasfunded by the Ceylon Chamber ofCommerce (CCC), the NationalChamber of Commerce of SriLanka (NCC), the NationalChamber of Exporters (NCE), theCeylon National Chamber ofIndustries (CNCI), and theInternational Chamber ofCommerce (ICC). Based onconsultation with the privatesector, the study: 1) examined SriLanka’s existing FTAs to identifykey stumbling blocks relating toboth tariff and non-tariff barriersto trade, which should be bornein mind when negotiating a tradeagreement with China,2) described salient features ofChina’s existing FTAs withcountries/regions, and3) identif ied products with exportpotential to China-products ofinterest to Sri Lanka which



should form part of tradenegotiations with China. Thestudy was conducted by JanakaWijayasiri, DharshaniPremaratne, SuwendraniJayaratne and Nipuni Perera. Themain f indings of the study werepresented by DharshaniPremaratne at a seminar‘Potential Sectors for Trade withChina under a FTA’ organized bythe Ceylon Chamber of Commerceand held in Colombo on 9September. IPS ExecutiveDirector made a keynote addresson Free Trade Agreements:Opportunities and Challenges at aseminar, organized by NCE on 15th

July.

Issues related to the FTA and therise of China in the world

economy were also disseminatedto a wider audience to generatediscussion/share knowledgethrough blogs/articles publishedin social media and nationaldailies such as the Daily Mirror,Island, Ceylon Today, SundayTimes (print and electronic).

These included:

· China-Sri Lanka FTA:Meeting the Challenges by SamanKelegama, DailyFT, 17th July

· A First Look at the Potentialfor Expanding Trade under a SriLanka – China FTA by NipuniPerera and Janaka Wijayasiri,DailyFT, 2nd April

· Challenges Remain for SriLanka-China FTA by SamanKelegama, East Asia Forum, 28th

March

· China’s Approach to FTAswith Other Countries: What CanSri Lanka Expect? by JanakaWijayasiri and DharshaniPremaratne, DailyFT, 4th

September

· Asia’s Rise: Undoubted butnot Unimpeded by AnushkaWijesinha, DailyFT, 26th August

The f indings of the study werepresented to the Secretary of theMinistry of Finance & Treasuryand the Department of Commerceby the Chambers as inputs forbilateral trade negotiations withChina. As a follow up of this study,IPS was commissioned by theChinese Embassy to examine non-tariff barriers in exporting to theChinese market, which was raisedas a cause of concern by theprivate sector in the country. Thesupplementary study will becompleted in mid-2015.

Connecting South Asiaand Southeast Asia

Improving physical connectivitybetween South and SoutheastAsia has long been recognized as akey element in promoting greatertrade and investment linkageswithin the region. As an islandeconomy, Sri Lanka’s regionalconnectivity has been mainlythrough its sea port in Colombo, atransshipment hub port for SouthAsia. Investments to expandcapacity at Colombo port areunderway as part of Sri Lanka’srenewed efforts to develop itsinfrastructure following the longinternal separatist conflict thatended in 2009.

Despite signif icant improvementsin physical infrastructureconnectivity, Sri Lanka has madeonly limited headway instrengthening its trade and

· Looking at Sri Lanka’sExisting Trade Agreements andLessons for the FTA with Chinaby Janaka Wijayasiri, The Island,10th September

· What Sri Lanka Should Knowabout China’s New EconomicDynamism by AnushkaWijesinha, DailyFT, 17th

September


Dharshani Premaratne presenting the main findings of the Study onSri Lanka - China Free Trade Agreement


investment links with the rest ofthe region. Moreover, the countryhas seen a sharp decline in itsoverall exports-to-gross domesticproduct (GDP) ratio, which isworrying in view of the growingexternal debt f inancing of manylarge infrastructure projectsthrough state-led investmentinitiatives. Thus, Sri Lanka needsto focus on two priority areas:engaging private investment ininfrastructure by strengtheningthe country’s institutional andregulatory environment; andimplementing a more strategictrade policy geared to enhanceregional integration efforts. Thestudy, funded by the AsianDevelopment Bank Institute(ADBI), was brought out as aworking paper by DushniWeerakoon and Nipuni Perera in:

• The Role of Sri Lanka inEnhancing Connectivity betweenSouth Asia and Southeast Asia,ADBI Working Paper 487, Tokyo:Asian Development BankInstitute.

Trade and TransportFacilitation Audit inSouth Asia: Sri Lanka &Maldives Case Studies

Progressive reduction of tariffsand other trade barriers hasincreased the attention of bothf irms and countries on reducingconstraints that delaytransactions at and behindnational borders, and increasingeff iciency of supply chains andassociated logistics costs. Studies

show that trade facilitationreforms in South Asia wouldresult in higher intra-regionaltrade as well as trade with otherregions. The main objectives ofthis study were to: (i) identifytrade and transport relatedbottlenecks Sri Lanka faces intrading with South Asiancountries, and (ii) identify tradefacilitation reforms and theirprioritization. IPS also conductedthe Maldives Country Study as apart of regional initiative of SouthAsia Watch on Trade, Economics& Environment (SAWTEE),Nepal; the studies are funded byAusAID.

A newspaper article on ‘Customsfor Securing and FacilitatingLegitimate Trade in Sri Lanka’ bySuwendrani Jayaratne based onthe preliminary f indings of thestudy, was featured in a number oflocal dailies (Daily News, DailyFT, Daily Mirror, Ceylon Today).

Suwendrani Jayaratne, DharshaniPremaratne and RaveenEkanayake were invited asresource persons/panellists at anumber of meetings, conferencesand workshops held in the regionincluding Nepal, India andThailand in relation to tradefacilitation in Sri Lanka. Duringthe year, they also participated ina number of seminars/workshopsorganized in Sri Lanka to keepabreast of WTO Agreement onTrade Facilitation as well asbrief ing the other IPS researcherson the implications of theagreement on Sri Lanka. As part

of the study, a policy brief andnational consultation will be heldin 2015. The consultation willbring together a number of keystakeholders from the private andpublic sector includinggovernment off icials, chambers,importers/exporters, freightforwarders, shipping lines andother relevant organizations. Theobjective is to present thepreliminary results of the IPSstudy and obtain the feedback ofthe stakeholders to validate thef indings. This event also hopes toprovide a small but a dynamicplatform for key stakeholders tocome together to f ind out howbest the trade facilitation processcould be carried forward.

Regional Integration andPoverty in South Asia

South Asia suffers from low levelsof regional integration, high ratesof poverty and is among theregions with lowest levels ofhuman development. With thepockets of poverty deepening inSouth Asia, combating povertyhas remained a priority issue in itsdevelopment agenda as well as inits regional integration efforts. Inthis context, this study analysesthe possible impacts of improvedregional integration in SouthAsia on poverty and welfare in theregion. An empirical analysisidentif ies the potential toimprove integration via trade ingoods, trade in services, andinvestment in the region.Furthermore, regionalcooperation in migration, food



security and energy are discussedin detail, identifying thechallenges the region faces andthe scope for regionalcooperation. The study funded bythe Asian Development Bank(ADB) also draws lessons fromASEAN. Saman Kelegama, GangaTilakaratne, Nipuni Perera,Suwendrani Jayaratne and SahanJayawardena contributed to thestudy.

South Asian CountryStudy on Products withRegional Trade Potentialand Associated Non-tariffBarriers with SpecialFocus on WMSMEs - ACase of Sri Lanka

Although the region has madesignif icant progress on severalMGDs, South Asia still remainshome to nearly 44 per cent of theworld’s poor. An importantmeans of promoting inclusive andsustainable developmentoutcomes would be to accelerategainful participation of womenowned/led Micro Small MediumEnterprises (MSMEs) in SouthAsia. MSMEs are known to be animportant source of employmentand poverty reduction especiallyfor women across countries in theregion. WMSMEs have been

identif ied as the backbone ofthese economies and constitute amajor source of formal andinformal sector employment ofwomen in most South Asiancountries. The objectives of thisstudy were to identify theconstraints faced by WMSMEs inSri Lanka in operating andexpanding their businessesincluding issues related to accessto regional markets such as non-tariff/trade facilitation linkedbarriers and provide policy andprogramme recommendations toease/manage the constraintsidentif ied.

This study is part of a largerregional study in South Asiainitiated by UNDP Asia- Pacif icRegional Centre in Bangkok withfunding from AusAID. In order toensure the quality of the researchand policy relevance of the study,an Advisory Group, consisting ofrepresentatives from the relevantgovernment agencies (NationalEnterprise DevelopmentAuthority, Department of ExportAgriculture, Sri Lanka ExportDevelopment Board) and privatesector (Spice Council of Sri Lankaand the Ceylon Coir FibreExporters’ Association), was setup for the duration of the project.The research team consisted ofthe following researchers: JanakaWijayasiri, DilaniHirimuthugodage, DharshaniPremaratne and SunimaleeMadurawala. The preliminaryf indings were disseminated at thefollowing venues:

· Meeting on ‘South AsianWomen MSMEs Study’,Kathmandu, Nepal, 24 August.

· ‘Promoting Women’s Micro,Small and Medium Enterprises(MSMEs) in South Asia Region’ atthe ‘Sustainable DevelopmentConference’ jointly organized byUNDP Regional Hub in Bangkokand SDPI, Islamabad, 9 to 11December.

A national consultation as well aspublication of the study as achapter in a book are planned for2015. Other anticipated activitiesfollowing the study includedissemination, advocacy andcapacity development.

Evaluating Trade andDevelopmental Impact ofSelected Aid for TradeProjects in Sri Lanka

In the context of the current post-crisis world economy, improvingtrade capacity of developingcountries is crucial for overallglobal development. Developingcountries, and in particular least-developed countries (LDCs),continue to face supply-sideconstraints and lack trade-relatedinfrastructure, which constraintheir ability to implement andbenef it from World TradeOrganization (WTO) Agreementsand expand their trade. The Aidfor Trade initiative was conceivedin this context to bothmainstream trade into thebroader national developmentstrategies of the benef iciary

Advisory Committee Meeting



countries and to enhance tradecapacity of the developingcountries. In this context, thisstudy aims at conducting adetailed country case study on thedevelopment impact assessmentof two selected aid for tradeprojects in Sri Lanka based on keyf ive principles of evaluation. Thisstudy was carried out byChandana Karunaratne andAshani Abayasekara with fundingfrom United Nations Economicand Social Commission for Asiaand the Pacif ic (UNESCAP).

Institutional Mechanismsfor Promoting Intra-Regional Investments andTrade in the IOR-ARCRegion in StrategicSectors

This project aims to explore thepotential of economiccooperation in the Indian OceanRim Association for RegionalCooperation (IOR-ARC) – agrouping of 19 economies in theIndian Ocean region – inknowledge-based industries andinfrastructure development andto identify institutionalmechanisms for facilitating theexploitation of this potential.Specif ic attention is paid toidentif ication of opportunities oftrade and investment cooperationin these strategic sectors. Thestudy draws upon national andinternational sources ofinformation on trade andinvestments of IOR-ARC membercountries, while undertaking in-depth case studies for selected

member economies based ondifferent levels of performance interms of the knowledge economyand infrastructure development.This study was carried out byRaveen Ekanayake with fundingfrom IOR-ARC Secretariat.

World Bank ExporterDynamics Database

The World Bank ExporterDynamics Database is the f irstdatabase providing measures ofexporter characteristics anddynamics across 45 countriesacross all geographic regions andincome levels. The ExporterDynamics Database contains closeto 100 measures covering the basiccharacteristics of exporters, theirdistribution by size, thediversif ication in their productsand markets, their dynamics interms of entry, exit and survival,and the average unit prices of thegoods they trade. The IPSresearchers -Nipuni Perera andAshani Abayasekara - collectedand collated the data for Sri Lankaon behalf of World Bank,Washington D. C.

Global CompetitivenessReport 2014/2015

The Global CompetitivenessReport (GCR) series continues toprovide the world’s mostrespected assessment of nationalcompetitiveness, for more thanthree decades. The GCR presentsrankings of the GlobalCompetitiveness Index (GCI),introduced in 2005. The GCI isbased on 12 pillars of


competitiveness, providing acomprehensive picture of thecompetitiveness landscape in 144countries in the world which areat different stages of economicdevelopment. The ranking showsthe productive potential ofnations and is widely used inforeign and domestic investmentsdecisions.

Sri Lanka was f irst included fromyear 2000 and was included forthe fourteenth consecutive year inthe 2014 report. The study is inthe form of an Executive OpinionSurvey among business leaderswho are able to provideinformation and bring to lightcompetitive issues that areimportant for the country, whichare not available in otherpublished sources. The survey inSri Lanka was carried out by IPSresearchers DilaniHirimuthugodage, AyodyaGalappattige, and SahanJayawardena with funding fromWorld Economic Forum (WEF)and Information &Communications TechnologyAgency (ICTA).


Taxation

Tax Policy and EnterpriseDevelopment in SouthAsia

Inclusive growth continues toremain a challenge for SouthAsian economies. Experts nowagree that the missing linkbetween growth and inclusivity islabour market outcomes thatgenerate well-paying andproductive jobs. Most non-agricultural employment in SouthAsia is concentrated in smallenterprises characterized by verylow productivity and wages.Research indicates that smallenterprise development andemployment generation isstrongly linked to tax policy. First,tax exemptions and concessionsare largely skewed to favour largeenterprises. Second, smallenterprise development is affectedby taxes such as the Value AddedTax (VAT). Third, small enterprisedevelopment is affected by weaklocal property taxation. Thegender dimension of smallenterprise development in SouthAsia has been ignored in policyand research.These problems need to beresearched through an integratedframework from the national andinternational perspectives. Thisresearch aims to f ill research gaps,inform policy, and provideopportunities for shared learningoutcomes at the regional level.The study covers f ive South Asianeconomies namely, Sri Lanka,Pakistan, India, Bangladesh andNepal. This study was conducted

by Anushka Wijesinha and RaveenEkanayake with funding fromGovernance Institutes NetworkInternational (GINI).

It is now well recognized thatwell planned and productivepublic expenditure is a means foraccelerating economic growth. How should a fast growingmiddle-income country plan itspublic expenditures to achieve thedual objectives of balancing thef iscal budget while at the sametime influencing growth throughpublic investments? IPS was partof a study undertaken by theWorld Bank to better understandthe size and composition of thepublic expenditures in Sri Lankaand provide recommendations onimproving the eff iciency andcomposition of spending,particularly looking at the equityimpacts of public spending.The f indings of the study aredetailed in: Nisha Arunatilake,Gabriela Inchauste, Nora Lustig,2014, ‘The Incidence of Taxes andSpending in Sri Lanka’, WorldBank. A summary of studyf indings were presented tooff icials in different ministries insmall discussion groups. IPS study


Executive Director at the ‘DeconstructingSouth-South Cooperation: A South Asia

Perspective’, India Habitat Centre,Delhi, India

Executive Director at the Project AdvisoryCommittee Meeting and the Researchers’

Meeting of the South Asian Trade andTransport Facilitation Audit Project,

Kathmandu, Nepal

Raveen Ekanayake at the SASECT TradeFacilitation Week: Sanitary/Phytosanitary

and Technical Barriers to TradeBangkok, Thailand

Executive Director at the 14th Ministerial ofthe Indian Ocean Rim Association (IORA),

Perth, Australia

Review of Public Financein Sri Lanka

team included: Nisha Arunatilake,Nipuni Perera, KaushalyaAttygalle, Neluka Gunasekara andJayamini Hewawasam.


Migration and Development

The research activities carried outby thematic area of Migration andDevelopment during the year 2014consisted of many aspects, whichincluded a large project consistingof three studies, networking,dissemination and bidding forprojects.

The project titled ‘Meeting theDevelopment Challenges ofMigration – Leveraging toImprove Policy Impacts’, wasfunded by TTI of the IDRC andwas carried out from March toSeptember 2014. The projectconsisted of three studies, whichwere aimed to initiate necessarypolicy changes in terms of marketaccess for labour migration fromSri Lanka, to minimizevulnerability of female domesticworkers and to improve re-integration of returnees to SriLanka. This overall project is setin the context of the NationalEmployment and HumanResource Policy for Sri Lanka,launched in 2012, which identif iesseveral challenges faced by theforeign employment sector.These include: a) lack ofinformation on the global labourmarket; b) diff iculties in cateringto the higher skilled employmentcategories in the global market;c) diff iculties in improving skillsdue to lack of training capacityand the lack of knowledge ontraining needs in the country;d) inadequate concern given tointegrating migration todevelopment; e) diff iculties incoordinating the activities ofdifferent migration relatedinstitutions; and, f) lack of

capacity of the existinginstitutional frameworkresponsible for labour migrationto address complex problemsarising in the sector.

The policy recommendations ofthis document highlights theimportance of improving skills,means of penetrating into newmarkets and improving the nexusbetween migration anddevelopment to f inding a meansof effectively reintegratingreturning workers. The study onmarket access addresses theseobjectives and the study on re-integration align with thesepolicy priorities. Similarly, theNational Advisory Committee ofLabour Migration (NACLM) hadidentif ied the need for acomprehensive study to explorethe vulnerability of domesticworkers who seek employment ontheir own against those who seekemployment through arecruitment agency. The focus ofthe third study of this project wasshaped by this researchrequirement of policy makers.

For the purpose of this overallproject, an advisory committeecomposed of off icials from thethe Ministry of ForeignEmployment Promotion andWelfare (MFEPW), Ministry ofLabour and Labour Relations(MLLR), and Sri Lanka Bureau ofForeign Employment (SLBFE),Association of Licensed ForeignEmployment Agents (ALFEA),and a migration expert fromUniversity of Colombo, wasformed and the committee

Sri Lanka has experiencedvarying forms and intensity ofmigration in post-independencedecades. At present, over onemillion Sri Lankan citizens areestimated to have migrated forforeign employment. Over theyears, the government hasfacilitated labour migration toease employment and foreignexchange shortfalls in thecountry with the relaxation ofregulations on travel and foreignexchange convertibility tofacilitate overseas work andremittances. The government ishoping to raise remittances bychanging the skill mix ofmigrants and the composition ofcountry destinations. Thechallenge is to identify andpromote foreign employmentthat is both benef icial to theworkers as well as the country.

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First e-book of the IPS titled:‘Mainstreaming Migration into the

Development Agenda of South Asia’ wasincluded in the South Asia Migration

Commission Net.


The involvement of IPS migrationresearch staff in the NACLMprovides a direct link to influencepolicy as well as to identify

provided guidance, and technicalinputs to the research team.This project organized aninternational conference titled‘Policies for MainstreamingMigration into Development inSri Lanka’ on August 14 withinvited resource persons fromIndia, Pakistan, the Philippinesand Italy. The conferenceparticipants included all key

published. Additionally, two ofthe studies were published underthe Working Papers of the LabourEconomic Series, while the thirdis forthcoming in 2015. Further,another version of the study onvulnerability is being reviewed bythe journal: InternationalMigration Review for publication.Additionally this project alsopublished an annotated

stakeholders in migration in SriLanka. In addition to thedissemination of f indings of thesethree studies at the saidconference, the study onvulnerability was also presented atthe New York State EconomicAssociation Annual Meetingsheld in October 2014.

Of these studies three blog articleswere published under thefollowing titles : ‘AccessingLabour MIgration Abroad : 6 KeyChallenges for Sri Lanka’ ; ‘DoesForeign Employment through anAgency Minimize Vulnerability ofSri Lankan Female DomesticWorkers?’ ; and ‘Sri Lanka CanGain More from Migration byHelping Returnees ReintegrateBetter’. Similarly, newspaperarticles and policy briefs of thesame three studies were also


International Migration Conference at the IPS Auditorium

bibliography titled ‘SelectAnnotated Bibliography onLabour Migration in Sri Lanka :2004 – 2014’ and set up an onlinerepository for migrationliterature. As part of this researchproject, Suwedrani Jayaratne,Dharshani Premaratne, NipuniPerera and Neluka Gunasekerafollowed online courses onmigration offered by theMaastricht University.

Apart from this project, SamanKelegama and Bilesha Weeraratneof this thematic area made a jointcontribution to the Handbook ofImmigration and Refugee Studiesby co-authoring a chapter titled‘Economic Impact of Remittances’.The Handbook is being edited byProf. Anna Triandafyllidou of theGlobal Governance Programme, atEuropean University Institute

and will be published in 2015under the RoutledgeInternational Handbooks series.Similarly, papers presented at theIPS/FES Seminar in June 2013 arecompiled into a manuscript on‘Mainstreaming Migration toDevelopment Policies in SouthAsia’ to be published as a book bya regional publisher. Additionally,Bilesha Weeraratne reviewed anarticle on migration that wassubmitted to the South AsiaEconomic Journal. Moreover, themigration research team was alsoinvolved in conceptualizing andplanning a Survey of Migrantsand their Families in Kurunegalaand Matale Districts on‘Household Impacts of Migration’under the auspices of the MFEPW.

In addition to the work related toresearch studies and projects,researchers in this thematic areawere active in disseminating andnetworking. At the policy makinglevel, the NACLM is a focal pointin Sri Lanka.



made a presentation titled ‘LabourMigration and Development:Perspectives from Sri Lanka’.

In addition to internationalmigration, this thematic area alsofocuses on internal migration andurbanization. To bring all theseareas under a single theme, amedium term Research Agendawas developed. The draftedResearch Agenda was presented toall relevant stakeholders at astakeholder consultation onSeptember and the ResearchAgenda was f ine-tuned withfeedback from participants. Interms of urbanization, BileshaWeeraratne attended thediscussion on Future Cities heldin September, organized byUNHABITAT. This served as anetworking opportunity to meetstakeholders on urbanization. IPSmigration research teamdeveloped networks/links withresearchers of the Ministry ofHealth associated with IOM anddiscussions are underway for acollaborative project on health ofSri Lankan migrants.

Bilesha Weeraratne at the InternationalConference on ‘Jobs for DevelopmentChallenges and Solutions’, New Delhi

research areas of importance forpolicy making. Other dissemina-tion and networking activitiesduring this period include two presentations by NishaArunatilake on ‘Impact of Migra-tion and Remittances on SocialMobility in Sri Lanka’ at theworkshop on Asian Approaches toSocial Mobility Experience,Lessons and Opportunities forCooperation, in August and on‘Migration and Social Mobility inSri Lanka’ at the workshop onSocial Mobility: Experiences andLessons from Asia, in Seoul,Korea, in November.

In September SuwendraniJayaratne attended the RegionalLabour Migration Workshop inKathmandu, Nepal. This regionalworkshop was organized by theMinistry of Labour andEmployment, Government ofNepal in collaboration with TheAsia Foundation. Participants forthis workshop were keystakeholders from Bangladesh,Bhutan, India, Maldives, Nepal,Pakistan, and Sri Lanka.

In October, the InternationalLabour Organization (ILO)organized a workshop on ‘Returnand Reintegration of MigrantWorkers - Lessons Learnt andStrategizing’ workshop inColombo for which NishaArunatilake and BileshaWeeraratne of IPS were invited asresource persons. Similarly, uponinvitation Janaka Wijayasiri andBilesha Weeraratne attended theinauguration of the meetings ofthe Colombo Process and Asia EUDialogue, organized by the Nisha Arunatilake at the Social Mobility meeting in Korea

International Organization forMigration and MFEPW, whichserved as networkingopportunities. At theinternational level, the IndianCouncil for Research onInternational Economic Relations(ICRIER), organized aninternational conference on ‘Jobsfor Development: Challenges andSolutions’ in December 2014, inNew Delhi, and BileshaWeeraratne attended thisconference on invitation and


Human Resources for Sustained Development3

Developing the country’s humanresources to meet the changingdemand will require a concertedeffort on many fronts. First, tofoster a skilled workforce that isable to meet the changingdemand of the labour marketimproving access to high qualitytertiary level education will becritical. However, expanding thetertiary education sector alone isnot suff icient. The foundationsfor further training in advancescience and technology relatedsubjects are laid at the schoollevel. As such, the quality andaccess to general educationshould also improve. Along witheducation and skill development,health is an importantdeterminant that ensures successin education and greaterproductivity in work life. Theimportance of nutrition fordecreasing loss of work days dueto illness and increasingproductivity is well documentedin the literature. Studies alsoshow that well-nourishedchildren are more likely tosucceed in education. Diseasesthat are more prevalent amongstthe productive age populationsuch as non-communicablediseases (NCDs) also influencework life and productivity. SriLanka’s demographic prof ile ischanging. The country has a fastageing population, while itsyounger population – bothchildren and those in theirproductive ages – are shrinking.The country will need to beconscious about these changeswhen planning for its futurehuman resources.

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A healthy nation is essential for sustained development. Poor healthreduces returns to investments in education and lowers productivity. In2014, IPS research focused on several health issues that were identif iedto be key policy concerns, either because they are large health issues atpresent or because they have the potential to be emerging health issues.Given the persistence and magnitude of the issue, the IPS researchactivities conducted several studies on malnutrition. In addition, the IPShealth research focused on two emerging health issues that need timelyintervention. These include Occupational health and health issuesassociated with electronic and electrical equipment related waste.

Malnutrition

While Sri Lanka’s overall healthindicators are on track to achievethe 2015 MillenniumDevelopment Goals (MDGs),malnutrition continues to be aserious health concern in SriLanka. Malnutrition isparticularly poor in the estatesector in the country. Familiesworking on estates are among thepoorest, in terms of nutrition. Forexample, about 30% of childrenunder f ive years old areunderweight, nearly 1 in 3 babiesborn have low birth weight, and1/3 women of reproductive age aremalnourished. The importance ofnutrition for reducing health carecosts, morbidity and mortality,improving education outcomesand increasing productivity iswell documented in theliterature.

Priyanka Jayawardena undertooka study, with funding from theThink Tank Initiative (TTI), tobetter understand the issues ofmalnutrition in the estate sector.The Study f indings shows thatmany inter-related factors

ranging from intergenerationalmalnutrition, food insecurity,alcoholism, poor socio-economicconditions, and lack ofknowledge, constitute a higherrisk of poor nutritional statusamong children and women inthe estate sector.

Poor education of women is foundto be a major constraint forreducing malnutrition in theestate sector. Poor educationalconditions affect women’s abilityto utilize available resources. Thisalso impedes the ability of thewomen to take full advantage ofthe awareness raising campaignson family health and hygienepractices conducted by the healthservice. Summary f indings of thisstudy carried out by the IPS areavailable at:

Health


Occupational Health

Improper work environments andwork practices can themselvesresult in health issues that aredebilitating, f inancially costlyand productivity reducing. Thereis developed policy in the countryto prevent health problemsarising from unsafe workenvironments and work practices.The existing laws and regulationsfor protecting workers fromoccupation related health issuesare scattered. IPS contributed tothis initiative through providing

Jayawardena, P. (2014), ‘HowMalnutrition in Sri Lanka’s EstateSector Can Be Tackled?’, PolicyInsight, IPS.

Details about the f indings of herstudies can be found in:

Jayawardena, P. (2014), ‘CanPeople in Sri Lanka’s Estate SectorBreak Away from PoorNutrition?’, Health EconomicsSeries No 1, IPS.

Jayawardena, P. (2014),‘Underlying Causes of Child andMaternal Malnutrition in theEstate Sector of Sri Lanka’, Journalof South Asian Studies, Vol 02.No(03), 241-255.

Priyanka presented the f indingsof her study at the SecondInternational Conference onGlobal Public Health (GPH 2014),organized by the InternationalCenter for Research &Development (ICRD), 03-04 July,2014, in Negombo.

She was able to build awarenesson the subject through herdissemination activities. As aresult, Priyanka was interviewedby the Inter Press Service Reporter.Based on her work in the area, she

is affordable. The government hascome up with guidelines forpreparation and serving of food inschool canteens. ManujWeerasinghe, Samanthi Bandaraand Munsif Sanoon recentlyconducted a study, with fundingfrom UNICEF, to assess how wellthese guidelines are beingfollowed by school canteens. Thef indings of this survey werepresented to a team of experts onschool health and nutrition onthe 15h of December at theMinistry of Education Services,Colombo.

Human Resources for Sustained Development

was also invited to a round tablediscussion aimed at improving thewelfare of the plantation sectorworkers organized by the PlantersAssociation of Ceylon.

In a related study ManujWeerasinghe, Samanthi Bandara,and Munsif Sanoon conducted a‘Literature Review on the Healthand Social Determinants ofMalnutrition in the Estate Sectorin Sri Lanka’ with f inancialassistance from the UNICEF.Findings of this review werepresented to a group of expertisefrom the World Bank, NationalNutrition Secretariat and theFamily Health Bureau, on the 18thDecember 2014, at the PresidentialSecretariat.

Most children are undernourishednot due to the lack of access tofood, but due to issues withorganization of time and resourcesand the knowledge on food andnutrition. In that regard, schoolcanteens can provide a usefulservice, to improve childnutrition. This is the case ifcanteens prepare and servehygienic and nutritious food that

Presenting findings of the study at the Presidential Secretariat


Health in All Policies:E-waste and Health

E-waste (i.e., waste electrical andelectronic equipment) hasemerged over the past few years, asa health and environmentconcern in the global agenda.Samanthi Bandara continued thedissemination activities of a studydone in 2013 with the aim ofanalyzing the magnitude of theproblem of E-waste in Sri Lankaand the issues concerned with themanagement of the E-wasteproblem in the country. A paper


a review of the OccupationalSafety and Health (OSH) policiesand good practices of othercountries, studying andidentifying existing and potentialoccupational health issues in SriLanka, and assessing the existingpolicies for preventingoccupational health issues. Thiswork was supported by fundingfrom the TTI. The f indings of thestudy appeared in the TalkingEconomics blog of IPS, as well asin the Daily Mirror (October,2014). Nisha Arunatilake andSunimalee Madurawala served asmembers of the National SteeringCommittee on Development ofOccupational Safety and HealthPolicy as well as the WorkingGroup of the Health Sector forDevelopment of OccupationalSafety and Health Policy.

The available knowledge onoccupational safety is limited. IPSwas able to contribute to f illingthis gap in knowledge throughthe involvement in the “HealthInequalities and Access to SocialSecurity of Informal Workers inAsia.” This is a global study fundedby the Rockefeller Foundation. Itis coordinated by Facultad LatinoAmertcana de Ciencias Soctales(FLASCO), campus in Chile. TheIPS team (Nisha Arunatilake,Shanika Samarakoon, PriyankaJayawardena, SunimaleeMadurawala, and NelukaGunasekara) is part of the Asianregional team involved in thisstudy. IPS researchers presentedpreliminary results of this study intwo regional meetings inVietnam.

IPS Researchers participated at the 1st Asian Regional Meetingheld in Vietnam

IPS Researchers also participated at the 2nd Asian Regional Meetingheld in Vietnam

was presented at the 5th

International Conference onSustainable Built Environment(ICSBE), 14th December 2014, inKandy; and, a brief summary ofE-waste management waspublished in IPSTalkingEconomics andnewspapers. She was also invitedto conduct a guest lecture on thesubject for the members of theRotary Club of Colombo Regency(RCCR), on the 22nd May 2014, atthe Royal Colombo Golf Club inBorella.


Labour

Improved employment outcomesare essential to translateeconomic growth into sustainablereductions in poverty andinequality whilst also promotingsocial cohesion, citizenempowerment, and personaldignity. Developing countriesneed to better understand how togenerate more and better jobs, andensure that disadvantaged groupsare able to access employmentopportunities. In this regard, IPSconducted a study to assess theprogress in the labour market overtime. Further, recognizing thefact that low female labour forceparticipation is a persistentproblem in the country, IPS alsoconducted a study to assess theissues concerned with low femalelabour force participation.

Labour MarketDevelopment

To better understand where andhow progress has happened inemployment in Sri Lanka,Priyanka Jayawardena andAnushka Wijesinghe engaged inthe Development Progress casestudy with funding from theOverseas Development Institute(ODI). It begins with an analysis

ICRIER-World Bank Conference onJobs for Development: Challengesand Solutions (1-2 December 2014,India Habitat Centre, New Delhi).

Female Labour ForceParticipation

One persistent problem faced by thelabour market in Sri Lanka is theconsistent low participation offemales in the labour market. Onlyabout one-third of the working agefemales are engaged in the labourmarket. With funding from TTI,Sunimalee Madurawala conducted astudy to assess how growth hasaffected female labour forceparticipation. She f inds that labourmarkets opportunities in accessinglabour markets have declined forwomen over time, and this decline isexperienced by women in all incomeclasses. The study f inds thatwomen’s labour market activities arehighly dependent on non-economicfactors, particularly familialresponsibilities and child care.

The f indings of the study aredetailed in:

‘Female Employment for InclusiveGrowth: Trends, Issues and Concernsof Female Labour ForceParticipation in Sri Lanka’, WorkingPaper, Labour Economics Series No.16. Colombo, IPS.

of the nature of progress from1990-2010, using a wide array ofindicators to capture the differentdimensions of employment. Thestudy aims to identify factorsaffecting progress and futurechallenges. The study f inds thatthe country has achieved progressin the labour market underunique and challengingconditions, including a North/East war that lasted for threedecades. The remainingchallenges highlight theimportance of hybrid policyapproaches and the importance oflong-term policy consistencyacross different regimes.

The results of the study waspublished in:

Bruce Byiers, Florian Kratke,Priyanka Jayawardena, LauraRodrigues, Anushka Wijesinha,(forthcoming), ‘Progress UnderDuress: Employment Creation inSri Lanka,’ Overseas DevelopmentInstitute (ODI).

IPS researchers were involved inseveral regional discussions oninclusive development and jobs.Nisha Arunatilake was a speakerat a Google Hangout on ‘InclusiveDevelopment through Jobs’,organized by the Indian Councilfor Research on InternationalEconomic Relations (ICREA), onJobs Knowledge Platform (JKP)website –www.jobsknowledge.org –managed by World Bankheadquarters. NishaArunatilake also made apresentation on the labourmarket in Sri Lanka at the


Samanthi Bandara delivering theGuest Lecture


The private sector has long been recognized as the engine of economicgrowth for the greater majority of countries around the world. In theaftermath of the global economic recession, job creation has taken centrestage of the global development agenda. Job creation is the job of theprivate sector and recognizing this, governments across the worldincluding Sri Lanka have prioritized the clearing away of those obstaclesstifling private sector development to ensure job creation. Against thisbackdrop, in 2014 IPS working closely with the private sector,government and international development partners focused its researchon identifying pressing issues concerning the private sector andproviding input on developing workable solutions to these problems.Given the importance of Small and Medium Enterprises (SMEs) to theSri Lankan economy, IPS conducted three studies focused specif ically onissues dealing with SMEs. In addition, IPS research also focused onbroader investment climate reforms that are key in developing a climateconducive to attract both domestic and foreign owned investors to start,grow and flourish.

Small and MediumEnterprises

In Sri Lanka, as per off icialestimates, of the 18,000enterprises operating in thecountry, about 91% are SMEs.SMEs contribute to 50 per cent ofGDP and employ 26 per cent ofthe labour force. Unfortunately,these SMEs face a number ofbusiness constraints that hindertheir growth, including bothf inancial and non-f inancialconstraints.

Access to Finance

As is the case in many otherdeveloping economies, access toand the cost of f inance is a majorconstraint to SME growth. Bankswon’t lend and investors won’tinvest thinking that smallbusinesses are high-risk. Againstthis backdrop, Anushka Wijesinhaand Nipuni Perera undertook a

study to assess and betterunderstand issues facing SriLankan SMEs when it comes toaccessing f inance. The studyargues that improving access tof inance for SMEs is a case ofimproving ‘availability’ on theone hand, and improving‘bankability’ on the other. Thestudy largely focuses on thesecond pillar – ‘bankability’. Thisstems from the understandingthat a f lush of SME credit alone isnot enough. ‘Bankability’ is aboutimproving banks’ approach toSME lending as well as improvingSMEs’ ability to approach banks.The study, drawing oninternational experiences alsogoes on to identify new ways inimproving access to f inance in SriLanka.

Private Sector Development4 With a stated government policyobjective of achieving GDPgrowth of 8 per cent or higher,Sri Lanka would need to raise itsannual rate of investment fromthe current level ofapproximately 28 per cent ofGDP to at least 35 per cent. Withincreasing pressures on publicf inances and announcementsthat public investment is likelyto be capped at around 6 per centof GDP, this higher investmentratio would need to come almostentirely from private investment.

Within this, foreign privateinvestment too plays a criticalrole. This then necessarily meansthat private sector developmentis a critical part of Sri Lanka’soverall development challenge.While the sources of fastergrowth in recent years havemainly been from governmentinitiative, the sources ofsustained faster growth in themedium term will need to comefrom the private sector – largeand small. No longer can we lookat private enterprisedevelopment from just thenarrow lens of ‘industrialdevelopment’ as may have beendone in the past.

It is about exploring andaddressing a myriad of factorsthat can strangle or strengthenthe private sector, provide it aconducive climate for growth,and ensure it plays a substantialrole in bridging growthdisparities and contributes tomore inclusive economicprogress and prosperity in thecountry. The latter becomesespecially important in SriLanka’s post-war milieu.

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The f indings of the study could befound in detailed in:

Wijesinha, A. & Perera, N. (2015),‘Banking on SME Growth:Concepts, Challenges and PolicyOptions to Improve Access toFinance in Sri Lanka’, WorkingPaper Series No. 20, IPS.

Drawing on the insights of thestudy and other work, AnushkaWijesinha made a presentation on‘SME Credit Guarantee Scheme’to members of the Central BankFinancial System StabilityConsultative Committee at theCBSL Conference Room on 5 June.In addition, Anushka Wijesinhaalso worked with the Securitiesand Exchange Commission todiscuss on ‘Capital MarketDevelopment as a FinancingOption for SMEs’.

Regulatory Obstacles

In addition to diff iculties inaccessing f inance, SMEs indeveloping countries also face anumber of regulatory barrierswhich stifle their growth.Taxation is key amongst them. Interms of the pay taxes index of theWorld Bank, Sri Lanka ranked 167out of 189 countries.

Anushka Wijesinha and RaveenEkanayake undertook a study toevaluate how conducive thecontemporary tax policy in SriLanka is to SME growth. Thestudy was part of a larger cross-country study covering f ive otherSouth Asian countries titled ‘TaxPolicy and Enterprise

Development in South Asia’, andwas by funded by the CanadianIDRC and administered by GINIbased in Islamabad, Pakistan. Keyf indings of the study suggest thatwhilst there have been a numberof tax-related provisions in favourof SMEs, the lack of a sounddef inition of what constitutes anSME continues to be a major areaof concern, and the targeting off iscal incentive packages havebeen ineffective as a result.Awareness is another area ofconcern as the study reveals thatthe majority of SMEs in Sri Lankaare misinformed with regard tothe costs and benef its of taxcompliance, and are unaware ofthe tax concessions available tothem. Sri Lanka needs to focusmore on creating better taxawareness amongst SMEs toincrease compliance andformalization. Findings furthersuggest that tax compliance isalso an area that needs urgentreform. The firm-level survey,which formed the basis of thisresearch study, reveals that SMEsf ind the prevailing tax structureto be complex and cumbersome,making compliance diff icult,costs of compliance regressive,and an overall drag on SMEs’growth potential.

Women Owned SMEs

Non-f inancial services (alsoknown as Business DevelopmentServices - BDS) have a crucial roleto play in creating a businessfriendly environment for SMEs,especially for Women owned

SMEs. Kaushalya Attygalle, DilaniHirimuthugodage, SunimaleeMadurawala, Athula Senaratne,and Anushka Wijesinha of IPSand Chopadithya Edirisinghe ofthe SAARC Business Associationof Home Based Industries/workers(SABAH) undertook a study withthe objectives of examining thesocio-economic and culturalbarriers which hinder women’sprogression to Small and MediumEnterprise (SME) sector. It alsolooked at the existing and futureopportunities for women to enterand lead SMEs with a specialfocus on access and availability ofwomen - friendly BusinessDevelopment Services (BDS)including development ofbusiness skills, technologytransfer and linking withf inancial services. The study alsoaimed to provide policy levelrecommendations to increasewomen entrepreneurs’ access tobusiness development services andto identify national-level strategicpriorities for stakeholders to workin economic justice with the aimof promoting women’s economicleadership and enterprise cultureamong women. The study wasfunded by Oxfam GB Sri Lankaand conducted in f ive districts.

The f indings of the study aredetailed in:

Attygalle, K., HirimuthugodageD., Madurawala, S., Seneratne,A., Wijesinha, A. andEdirisinghe,C. (2014), ‘FemaleEntrepreneurship and the Role ofBusiness Development Services in

Private Sector Development


Promoting Small and MediumWomen Entrepreneurship in SriLanka,’ IPS, Oxfam GB, Sri Lanka

Sunimalee Madurawala made apresentation of the study to keystakeholders at the publicationlaunch event on the 9th of May atthe IPS Conference Room. Inaddition, she also published ablog article titled ‘Better BusinessDevelopment Services Can HelpSri Lanka’s Women EntrepreneursProsper’ on the 1st August.

In addition to these researchstudies, Anushka Wijesinha wasalso actively involved in a numberof Advisory Committees for theGovernment of Sri Lanka. Heworked with the Secretary andoff icials of the Ministry ofTraditional Industries and SmallEnterprise Development indeveloping a new Draft of theNational SME Policy. AnushkaWijesinha also published anewspaper article titled ‘Can SriLanka Learn from the KoreanSME Promotion Strategy?’, whichlooks at Korea’s experience in

promoting SMEs to draw similarlessons for SME policy in SriLanka.

Attracting Investments:Investment ClimateReforms

A sound investment climateprovides private f irms withopportunities and incentives toinvest and grow and is key tosustaining long-term growth andreducing poverty. However, alltoo often, potential private sectorcontributions to development areconstrained by unjustif ied risks,costs, and barriers to competition.As per the latest enterprise surveyconducted by the World BankGroup of 46,000 firms surveyed inmore than 100 countries, problemsin the local investment climate(46%) was cited as the numberone issue holding back privatesector growth. In the DoingBusiness Report of the WorldBank, Sri Lanka was ranked adistant 105th out of 189 countriesin terms of the Ease of DoingBusiness and has a long way to

improve in narrowing the gap instandards between the frontiercountries.

Investment climate reforms areespecially critical for a developingcountry like Sri Lanka which isaspiring to attract foreigninvestments amidst f iercecompetition from a host of otheremerging market economies ofthe likes of Vietnam, Bangladesh,Myanmar and Cambodia with farmore superior resourceendowments. Against thisbackdrop, Anushka Wijesinhaworked on the Ceylon Chamberof Commerce SteeringCommittees on ‘Ease of DoingBusiness and FDI’ to advocate andlobby the government toundertake broad-based reforms toimprove the investment climatein Sri Lanka. In this endeavour,he made a presentation to theSecretary Ministry of Industry andCommerce along with otheroff icials (EDB, etc) on ‘Ease ofDoing Business and Promotion ofFDI’, at the Ministry in March.

Anushka Wijesinha and RaveenEkanayake also looked atempirical literature on thesuccessful case study of Penang,Malaysia to draw lessons for goingabout to attract foreign investorsinto the Sri Lankan port city ofHambantota. They authored anewspaper article titled ‘SriLanka’s Post-war Hub Ambitions -Can Hambantota Learn fromPenang?’ based on the f indings.

Private Sector Development

IPS Executive Director, handing over the study on ‘Female Entrepreneurship and theRole of Business Development Services in Promoting Small and Medium WomenEntrepreneurship in Sri Lanka,’ to Ms. Dieneke van der Wijk, Deputy Regional

Director, Programmes Asia, OxfamGB, in the IPS Conference Room.


Poverty and Vulnerability5Despite Sri Lanka’s remarkableprogress in reducing poverty andachieving MillenniumDevelopment Goals (MDGs) atnational level, considerabledisparities are seen across sectorsand regions of the country.Moreover, a sizeable share of thenon-poor are clustered just abovethe poverty line facing the risk ofslipping into poverty due tovarious risks - economic shocks,vagaries of weather, and life cycleevents such as deaths andsickness. Sri Lanka is also facedwith a number of demographicand labour market relatedchallenges. The large informalsector workforce with little or nosocial security benef its, higherrates of unemployment amongyouth and the educated, and thecontinuing low female forceparticipation rate over the pastdecade, are some of the majorissues. The rapid ageingpopulation also brings severalchallenges to the economy, inparticular to its social protectionand health sectors. Addressingthese issues require a policies andprogrammes that cover a broaderspectrum of risks and vulnerablegroups such as the poor, elderly,disabled, women and children. Itrequires deeper understanding ofthese issues and an in depthanalysis of the existing systemsand policies. In this context, theIPS research on poverty andvulnerability focuses on a numberof important themes such as socialprotection, f inancial inclusion,MDGs and the post- 2015 agenda,poverty in lagging regions andchild vulnerability.

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‘

A comprehensive socialprotection system that covers abroader spectrum of risks andvulnerable groups is crucial toaddress vulnerability andenhance equity in the country.Sri Lanka has a long history ofproviding social protection tovarious segments of itspopulation. Currently, there is awide range of social protectionprogrammes including cash andin-kind transfers, pensions,education welfare programmesand livelihood developmentprogrammes. However, theeffectiveness of the current socialprotection system, in terms of itscoverage, targeting, allocation ofresources and its effect onhouseholds remain unclear. Inorder to fill this gap, the Povertyresearch team of the IPS carriedout a series of research studieson social protection during 2014.

A research project on ‘SocialProtection and Welfare Analysis’funded by the United NationsChildren’s Fund (UNICEF), wascarried out to assess theeffectiveness of social protectionat the household-level in SriLanka. In particular, thisresearch examined differenttypes of social protection benefits(e.g. cash and in-kind transfers,retirement benefits) received byhouseholds and analyzeddisparities across income groupsand districts in terms of access tothese benefits and the level ofsatisfaction by the recipienthouseholds. The study was

Social Protectionbased on a household surveycovering around 2000households from six districts ofthe country, namelyAnuradhapura, Matara,Monaragala, Nuwara Eliya,Batticaloa and Jaffna. (ResearchTeam: Ganga Tilakaratna, NisalHerath, and AyodyaGalappattige). The report isexpected to be published in 2015and to be shared with relevantstakeholders – policy makers,donors and academia - of thesocial protection sector.

IPS also carried out a research on‘Updating and Improving SocialProtection Index -Sri Lanka’funded by the Asian DevelopmentBank (ADB). Under this project,the social protection Index for SriLanka was constructed based onthe information collected fromaround 85 social protectionprogrammes including socialassistance, social insurance andlabour market programmesimplemented by variousgovernment bodies. (ResearchTeam: Ganga Tilakaratna, SahanJayawardana and YolanthikaEllepola). As a part of this project,Ganga Tilakaratna, ResearchFellow of IPS, attended thetechnical workshop on ‘Updatingand Improving the SocialProtection Index’ organized bythe ADB, held in Manila,Philippines on 3-4 April 2014. TheSri Lanka country report will bepublished by the ADB in 2015 andthe f indings will be disseminatedto all stakeholders in the sector.


Furthermore, a research study on‘Social Protection and LabourMarket Outcomes in Sri Lanka’was initiated by IPS Povertyresearch team during 2014 withthe f inancial support of theInternational LabourOrganization (ILO). The studyexamined the effect of socialprotection on labour forceparticipation and employmentstatus. This research was fundedby the ILO. (Research Team: GangaTilakaratna, Sahan Jayawardana).The preliminary f indings of thisresearch was presented at theinternational conference on‘Meeting the Challenges ofEmployment and SocialProtection in South Asia’organized by the South AsiaResearch Network on

Employment and SocialProtection for Inclusive Growth(SARNET) in collaboration withthe UN-ESCAP, ILO, IDRC,Canada and the Institute forHuman Development (IHD), heldin New Delhi, India during 14-16December 2014.

In addition, IPS staff engaged inSouth Asia regional level policyinitiatives on social protection.Dr. Saman Kelegama, ExecutiveDirector of IPS and GangaTilakaratna (Research Fellow)were invited to a regionalworkshop on ‘Developing aDeclaration on StrengtheningSocial Protection in South Asia –A Multi-stakeholder Contributionto the 18th SAARC Summit’ heldin Nepal, during 21 and 22 August

MDG and Post- 2015Development Agenda

As the lifespan of MDGs iscoming to an end in 2015,discussions are taking place at theglobal, regional and national levelon the post-2015 developmentagenda. In this context, IPSpoverty team also carried out anumber of research activities toexamine Sri Lanka’s progress onMDGs and to contribute to theglobal debate on Post-MDGagenda.

IPS prepared the MillenniumDevelopment Goals (MDGs)Country Report for Sri Lanka incollaboration with the UnitedNations Development Programme(UNDP) and the Ministry ofFinance and Planning of SriLanka. This is the third MDGCountry Report of Sri Lanka. Thisreport provides a comprehensiveassessment of Sri Lanka’s progresswith regard to MDGs and theirtargets - at both the national leveland the regional level. There are44 MDG indicators in total, ofwhich 26 have def ined targets. SriLanka has already achieved thetargets for 13 of these indicatorsand is “on track” to achieveanother 11 indicators by 2015. Onlytwo indicators were “off track”.Various policies including freeeducation and free health care

Poverty and Vulnerability

Executive Director of IPS and Ganga Tilakaratna at the workshop held in Nepal

2014 with the objective offormulating a Declaration onstrengthening social protectionfor the SAARC Summit inNovember 2014.

Ganga Tilakaratna participating at the ADB Technical Workshop


provision that have beenimplemented for more than sixdecades have contributed to SriLanka’s achievement with regardto many MDGs. The reportprovides a comprehensive analysison all eight goals, highlightingthe achievements, regionaldisparities and areas forimprovements. (Research Team:Wimal Nanayakkara, GangaTilakaratna, SunimaleeMadurawala, Chatura Rodrigo,Suwendrani Jayaratne, AshaniAbeysekera, Ayodya Galappattigeand Yolanthika Ellepola). Thisreport is also being translatedinto Sinhala and Tamil languagesto make it accessible andbenef icial to a wider audience.This MDG report for Sri Lankawill be launched in early 2015.

Dr. Saman Kelegama, ExecutiveDirector of IPS made apresentation on the draft MDGSri Lanka Report at the UN DayEvent organized by the UnitedNations Off ice, Colombo, on 24thof October. A booklet on‘Millennium Development Goals:Sri Lanka’s Progress and KeyAchievements’ based on this draftMDG Sri Lanka Report was alsoprepared by UNDP and madeavailable to the public.

IPS poverty research team alsocontributed to the ongoingdebate and discussion on thepost- 2015 development agenda.Ganga Tilakaratna prepared areport on ‘Social Protection andthe MDGs in Sri Lanka:Implications for the Post-2015Agenda’ for the Southern Voiceon Post-MDG InternationalGoals supported by the TTI. The

report analyzes the link betweensocial protection and MDGs inSri Lanka and brings outimplications for the post -2015development agenda based on theSri Lankan experience. It arguesthat social protection has to beconsidered a key element of thepost-2015 development agenda –either as a goal, or as aninstrument to achieve severalgoals. This report was publishedby the Southern Voice on Post-MDG International Goals, underits occasional paper series and hasbeen made available to the public.

A blog titled ‘From MDGs toPost-MDGs: Some Lessons fromSri Lanka’ was prepared based onthe research study carried out forthe Southern Voice Network andwas disseminated to a wideraudience through the blog site on‘Post-2015.org - What Comes afterthe MDGs?’ co-ordinated by the


Overseas Development Institute(ODI), UK. The f indings of thisresearch will also be presented atan international conference on‘Post-2015 International Goals andTargets’ that will be organized bythe Southern Voice on Post-MDGInternational Goals in associationwith TTI of the IDRC, Canada inIstanbul, Turkey in 7th February2015.

Financial InclusionImproving access to qualityf inancial services is anotherimportant step to reduce poverty,vulnerability and to enhancelivelihood opportunities amonglow-income households. There isa wide network of banks andmicrof inance institutions (MFIs)including co-operatives, Non-Governmental Organizations(NGOs) and special governmentprograms involved in theprovision of credit, savings, micro-insurance, and money transferservice facilities to low-incomehouseholds. Despite relativelyhigher access to f inancialinstitutions in Sri Lanka(compared to many othercountries in the region), there area number of issues that need to be

Executive Director making a presentation on the MDG Sri Lanka Report


addressed in the microf inancesector and the f inancial sector asa whole to ensure sustainableprovision of quality f inancialservices to all. In this context, IPScarried out a number of researchactivities related to f inancialinclusion and the microf inancesector in Sri Lanka.

IPS carried out a research study on‘Financial Inclusion, Regulationand Education in Sri Lanka’ forthe Asian Development BankInstitute (ADBI), Tokyo, Japan.The study reveals that Sri Lankahas achieved a high level off inancial inclusion compared toother South Asian countries.There is also evidence that alarger share of households in SriLanka accesses multiple f inancialinstitutions for their credit andsavings needs. However, the use ofinsurance services, ATM facilities,e-payments, and mobile banking,is relatively low. Financialeducation is also ad hoc and lagsbehind f inancial innovation andnew products. Moreover, there ismuch scope to improve f inancialinclusion, particularly with regardto cost and quality of f inancialservices provided, and thesustainability of f inancialinstitutions. The study alsostresses the need forstrengthening the currentregulatory framework for themicrof inance sector and clientprotection. This report has beenpublished under the ADBIWorking Paper series and isavailable to public.

A short article based on thisresearch paper titled ‘Sri Lanka

· Ganga Tilakaratna made apresentation on‘Microf inance as a Tool forEmpowering the ConflictAffected Communities’ atthe seminar on ‘Microf inancefor Conflict AffectedCommunities’ organized bythe Pathfunder Foundation,Colombo, on 10 January.

· Executive Director, IPS, made apresentation on ‘FinancialInclusion, Regulation andEducation: Sri Lanka from aSouth Asian Perspective’ atthe International Conferenceon Financial Inclusion,Regulation and Education,organized by the AsianDevelopment Bank Institute(ADBI), Tokyo, Japan on 21April.

He also made a presentation on‘Financial Inclusion in SriLanka: Issues and Challenges’at the Association ofProfessional Bankers of SriLanka, Bank of CeylonAuditorium, Colombo,on 09 September.

Microfinance as a toolfor empoweringconflict-affectedcommunities


Takes Regional Lead in FinancialInclusion’ was also published inthe Daily Mirror newspaper toshare some of its f indings with awider audience.

Furthermore, a number ofpresentations on FinancialInclusion related issues were madeby IPS staff at various nationaland international forums duringthe year 2014.


Sri Lanka has experienced adecline in the poverty level overthe past two decades. Thenational poverty head count ratio(HCR) declined from 28.2% in1995/96 to 8.9 % in 2009/10 anddeclined further to 6.7% in 2012/13. A fall in poverty levels during2009/10 – 2012/13 period wasobserved across all the threesectors of the country (i.e. urban,rural and estate) and in themajority of the districts, with theexception of, Monaragala,Anuradhapura, Polonnaruwa andVavuniya districts. The increasein poverty was most signif icant inthe Monaragala district where thepoverty HCR has risen from 14.5%to 20.8% - a 43% increase betweenthe two periods. In this context,IPS carried out a study to explorethe factors that contributed tothe rise in poverty in theMonaragala district in recentyears. The study was carried outon a request from the UvaProvincial Council and with thef inancial support from theUNICEF. Research Team consistedof Ganga Tilakaratna, NisalHerath, Pavithra Gunasinghe andDinnaga Padmapperuma.

Poverty in LaggingRegions


Child Vulnerability

IPS also carried out a study on the‘Status of Children in Sri Lanka:Review of Data Gaps’ funded bythe UNICEF. The objective of thestudy was to examine the availabledata and gather evidence toidentify the current and emergingissues related to various sectorssuch as education, health andnutrition, and to identify datagaps related to these sectors. Thestudy was initiated with a view to

IPS research team worked closelywith the Provincial Councils indesigning and carrying out theresearch. A consultation meetingwas held at the Uva ProvincialCouncil where the researchproposal was presented anddiscussed with the Chief Secretaryand the relevant off icials of theUva Provincial Council. The f inalreport titled ‘Poverty inMonaragala: Identifying Factorsthat Contributed to the Rise inPoverty during 2009/10 -2012/13’was submitted to the UvaProvincial Council and is expectedto be used for formulating policiesto address the issues of poverty inthe Monaragala district.

support full realization ofchildren’s rights in education,health, nutrition, water,sanitation and child protection:The latest information based onthe Census of Population andHousing-2012 and the HouseholdIncome and Expenditures Surveys-2009/10 and 2012/13 was used forthe analysis of education, childpoverty, water and sanitation.Information from the records ofDepartment of Examinations(2014) provided requiredinformation to analyze theperformance of students at theGrade 5, G.C.E. (O/L) and G.C.E.(A/L) examinations. The reportsof the Family Health Bureau(FHB), provided the informationon child health. However, withregard to access, the quality ofeducation, information onrequirements of children withspecial needs in education,information on vocationaltraining to suit the marketdemands, are inadequate. Theother main areas with major datagaps were child nutrition, earlychildhood care and development,early childhood care andeducation and child protection.These were identif ied as the mainareas which need the attention ofthe relevant authorities.(Research Team: WimalNanayakkara and YolanthikaEllepola). The preliminaryf indings of this study waspresented by Mr. WimalNanayakkara, Senior VisitingFellow of the IPS, at a conferenceon ‘Child Well-being and Equityin Sri Lanka’ organized by theUNICEF on 8 August.

Executive Director at the ADBI Conference in Japan


Environment, Natural Resources and Agriculture6Growth that results in depletingthe natural capital stock of acountry is not smart as it cannotbe sustained in the long-term.Sustainability implies attainingthe aspirations of the currentgeneration withoutcompromising the capacity offuture generations to do thesame. In essence, it deals withinter-generational equity ofhuman use of environmentalresources. Sri Lanka is blessedwith a habitable tropicalenvironment all over the countrythat offers many eco-systemservices for the well-being ofpeople. The rich stock of naturalresources provides the essentiallaunching pad for Sri Lanka’spost-conflict drive towards fast-track growth. Whether thisendowment could bring indesired improvements to livingstandards of people, and moreimportantly, could it bemaintained for the well-being offuture generations, is largely amatter of how sensibly it is putinto use. Recently, the idea ofsustainability has given rise tomore operational concepts suchas ‘green growth’. Green growthadvocates exploring new avenuesof growth that ensure continuityof the natural capital stock.However, there is overwhelmingevidence to believe that thepresent use of natural capital inSri Lanka is not fulf illing theconditions necessary for greengrowth. The policies/strategiesfor green growth cover threebroad areas of interest: (i)innovation and adoption of righttechnical solutions; (ii) policiesfor getting structure of incentivesright; and (iii) policies for settingup right institutions.

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Climate Change

Athula Senaratne, KanchanaWickramasinghe and ChaturaRodrigo initiated theCLIMATEnet Policy DiscussionForum with the objective ofcreating a policy oriented dialogon climate change among the keystakeholders. This involveddeveloping a series of policy briefson seven climate change affectedeconomic sectors based on theinputs from expert consultationmeetings on respective sectors.Outputs are based on qulitativeanalysis of the informationgathered from experts.Information gathering andprocessing activities of theproject has been completed in2014 and publishing of policybriefs in CLIMATEnet blog willbe continued in 2015. The work isfunded by the TTI.

The Environmental EconomicPolicy Unit is currentlydeveloping the National ClimateChange Adaptation Plan (NAP)for Sri Lanka. It is a consultancycommissioned by the ClimateChange Secretariat of theMinistry of Environment andRenewable Energy. Preparationof NAP is a mandatory activityunder United Nations FrameworkConvention for Climate Change(UNFCCC). The activities of theproject were commenced in thethird quarter of 2014 and will becontinued during the f irstquarter of 2015 also. AthulaSenaratne, KanchanaWickramasinghe and ChaturaRodrigo are undertaking the

project. Athula Senaratne in hisblog article published in theCLIMATEnet highlighted the‘Policy Challenges and Major Gapsin Climate Adaptation in SriLanka’. The article wassubsequently published in TheIsland, The Daily Mirror andDaily FT, on the 1 April, and wasfor promotion in the UN web sitePreventionWeb by UNISDR.

Chatura Rodrigo discussed the‘Other Side of the Coin’ issues ofclimate change in his article on‘Can Climate Change Bring inPositive Impacts?’, published inthe CLIMATEnet Blog andsubsequently in newspapers TheIsland, The Daily Mirror andDaily FT, on 28 August.

The team of the EnvironmentalEconomic Policy Unit alsoengaged in reviewing theTechnology Needs Assessment(TNA) for Climate Change in SriLanka, a project undertaken byClimate Change Secretariat of theMinistry of Environment andRenewable Energy, to assess thecurrent status of TNA process inSri Lanka and makerecommendations for future steps.Data gathering activities based onkey informant interviews were


Environment, Natural Resources and Agriculture

completed and the draft reportwas submitted. Project activitiesare to be continued in 2015 thatincludes organizing a multi-stakeholder workshop. Thisconsultancy assignment wascommissioned by the Institute ofGlobal Environmental Strategies(IGES) of the Ministry ofEnvironment, Japan.

The frequency and intensity ofclimate related disasters havebeen increasing over the years andfarmer groups are highlyvulnerable to such impacts in SriLanka. There is a timely need toundertake comprehensiveassessment on farmer riskmanagement strategies to helpformulate effective policies.Kanchana Wickramasingheformulated a research proposal toassess farmer risk managementstrategies including climateinsurance and submitted it to theGlobal Development Awards andMedals Competition 2014 of theGlobal Development Network(GDN). Kanchana’s proposal wasamong the short listed proposalsamong the 388 submissions from72 countries that had beenreceived for the Competition thisyear. She presented the proposalat the Fifteenth Annual GlobalDevelopment Conference of theGlobal Development Network(GDN)in Accra, Ghana, 18 to 20June, which was attended by over500 practitioners in the f ield ofdevelopment and the winnerswere selected by an eminent juryat the Conference. Kanchanawas successful in receiving thef irst prize for the prestigious

Japanese Award for OutstandingResearch on Development (ORD)for the proposal. This 2 yearresearch work has already beencommenced and will becontinued until 2016.

Kanchana also attended the‘GDNet ResearchCommunication: PresentationSkills Training for Awards andMedals Finalists’ during theConference in Accra, Ghana, 16-17June, 2014.

Kanchana Wickramasinghepublished the f indings of herprevious assessment in;

‘Role of Social Protection inDisaster Management in SriLanka’, Sri Lanka Journal ofSocial Sciences, 35/36 (1 & 2)June/Dec 2012/2013 (byKanchana Wickramasinghe)

Athula Senaratne and ChaturaRodrigo attempted to explore theagricultural adaptation practicesin the case of Sri Lanka, with thefunding support from SAWTEE.Findings of the study werepresented at the SAWTEEworkshop Kathmandu, 11 to 15March by Athula Senartne, andare published in:

Senaratne, A., C. Rodrigo(2014), ‘AgricultureAdaptation Practices inSouth Asia: Case of Sri Lanka’,Working Paper No. 01(ii)/14

Presentations and publications inrelation to various aspects ofclimate change include;

Wickramasinghe (2014), ‘19th

Climate Change Conference’ -An Assessment, An articlepublished in Trade Insight,Vol. 10, No. 1, 2014.

Rodrigo, C., A. Senaratne(2014) ‘Adapting Sri Lanka’sCoasts and Ocean Resourcesto a Changing Climate’, a blogarticle in Talking Economicssubsequently published inThe Island, Daily Mirror andDaily FT, 5 June.

Senaratne, A. (2014), ‘Finally,Some Good News: OzoneLayer is on the Track toRecovery’, a blog article inTalking Economicssubsequently published inThe Island, Daily Mirror andDaily FT, 16 September, byAthula Senaratne.

AgricultureAdaptation Practicesin South Asia

Case of Sri Lanka

Athula SenaratneChatura Rodrigo

SAWTEE Working PaperNo.1(ii)/14

Kanchana Wickramasinghe, ResearchEconomist, making a presentation

at the Conference



‘Climate Change ChallengesFaced by Indian Ocean RimCountries’ a presentationmade at Indian Ocean RimAssociation (IORA) workshopin Colombo, 30 June byAthula Senaratne.

Sustainable Tourism

As the tourism industry isreviving in Sri Lanka, itssustainability aspects shouldreceive high policy attention, inaddition to the numerical targets.Kanchana Wickramasingheundertook a study to assess goodenvironmental managementpractices in the hotel sub-sector,based on a comprehensive surveyundertaken in the WesternProvince. The study focused ondetailed on adoption of energy,water and waste management anddeterminants of such adoption.This study is based on a research

grant awarded to IPS by SouthAsian Network for Developmentand Environmental Economics(SANDEE) on a competitiveproposal submitted by Kanchana.The f indings of the study werepresented at the disseminationworkshop held in October, withthe participation of key expertsand stakeholders in sustainabletourism in Sri Lanka. A shortpublication highlighting the keyf indings and policy implicationswas launched at the workshopand widely disseminated amongthe key stakeholders andinterested groups.

Kanchana was then invited tomake presentations on the studyfor the students of Masters inTourism Economics and HotelManagement, University ofColombo and the Diploma inTravel and Tourism Economicsand Hotel Management,University of Colombo. Kanchanaalso presented the f indings at theinternational conference on‘Tropical Tourism OutlookConference: Nature, Culture andNetworking for SustainableTourism’, Hotel Kandalama, 9 to 10August, highlighting theconstraints for adopting good

environmental practices for thehotel sector.

The f indings are also publishedin;

Wickramasinghe (2014),Determinants of Receipts ofEnvironmental Awards andCertif ications by Hotels in SriLanka: Experience from theWestern Province, Journal ofEnvironment Professionals SriLanka, Vol 3, No 2, pp 41- 47.

Wickramasinghe (2014),‘Constraints for Adoption ofEnvironmental ManagementPractices in the Hotel Sector inSri Lanka’, Proceedings of theconference ‘Tropical TourismOutlook Conference: Nature,Culture and Networking forSustainable Tourism’ held inDambulla, Sri Lanka from 8 to10 August 2014.

Wickramasinghe (2014),Sustainable Production andConsumption in ServiceSectors: Case of Hotel Sector inSri Lanka, Economic Review,Vol. 39, Nos. 06 & 07 - 08, Aug/Nov 2013.

Wickramasinghe (2014),Making Sri Lanka’s Post-warTourism Boom MoreEnvironmentally-Friendly, Ablog article in TalkingEconomics subsequentlypublished in newspapers TheIsland, The Daily Mirror andDaily FT, 20 May

In addition to her focus on hotelsub-sector, Kanchana also

Dr. Athula Senaratne, Research Fellow,presenting at the IORA conference



highlighted the policyimplications for forest-basednature tourism and ecotourism, asdetailed in the followingpublications.

Getting Communities Involved inSri Lanka’s Nature Tourism, Ablog article in Talking Economicssubsequently published in TheIsland, The Daily Mirror and DailyFT, 27 September (By: KanchanaWickramasinghe)

‘Forest Attraction: Can Sri Lankause Ecotourism for SustainableForest Management?’, A blogarticle in Talking Economicssubsequently published in TheIsland, The Daily Mirror andDaily FT, 6 February(By:Kanchana Wickramasinghe)

Macro Picture ofEnvironment andEconomy

The nexus between environmentand the economy has not beenwell established through researchin Sri Lanka. In order to shedlight on this research gap theEnvironmental Economic PolicyUnit commenced Developing aMacro-economic Prof ile ofEnvironment in Sri Lanka. Thisinvolved compiling a macroprof ile of environment datarealted to key economic sectorspublished in various sources. Itinvolves identif ication andcollection of data from varioussources and development of acustomized data base to store andprocess data for various anlyticalpurposes. Identif ication of sources

and compiling of data has beencompleted. Development of data-base has been outsourced andcarried out stage-wise. Data entryfacility was developed and databeing entered while theconsultants are developing thequery building facility. This willbe expected to complete in thef irst qurter of 2015. The work isundertaken using the TTI funds.

Organic Agriculture

The negative health andenvironmental impacts ofunsustainable use of chemicalinputs in agriculture is beinglargely discussed in Sri Lanka.Chatura Rodrio initiated aresearch study on “Economic

Analysis of Organic RiceProduction in Sri Lanka:Opprtunity Cost of Supply”, toanalyze economics of organic riceproduction in dry and wet zoneareas in Sri Lanka based onprimary data collected through asample survey and focus groupdiscussions. The study is based ona research grant awarded to IPS bySouth Asian Network forDevelopment and Environmental

Economics (SANDEE) on acompetitive proposal submittedby Chatura Rodrigo. Datacollection activities werecommenced in 2014 and researchwork will be continued in 2015also. Chatura disseminated theinterim f indings of the study in;

Key Determinants of Sri Lanka’sFertilizer Subsidy: Some ResearchFindings for Policy Makers, Ablog article in Talking Economicssubsequently published innewspapers The Island, The DailyMirror and Daily FT, 27September (By: Chatura Rodrigo)

‘Is it the Time to Go Back toWhere We Came From:

Addressing the Debate Organic VsInorganic Rice Farming Througha New Research Approach?’, TheIsland, 27 February. (By: ChaturaRodrigo)

Regional Collaborations

The IPS is in the process ofEstablishing a Centre ofExcellence (CoE) on OceanSciences and Environment for theIndian Ocean Rim Countries and

Delegates at the IORA Conference held in Colombo


Executive Director, IPS, handing over a copy of the Policy Insight on EnvironmentalManagement Practices in Hotel Sector in Sri Lanka to Mr. B.M.U.D. Basnayake,

Secretary, Ministry of Environment and Renewable Energy, at theDissemination Work-

shop


the project is facilitated by theMinistry of Exterenal Affairs withthe technical support of IPS. Aproposal was developed by IPS forestablising a COE which has beenapproved by the Indian Ocean RimCountries Assocaition (IORA) andthe Cabinet of Ministers of SriLanka. Subsequntly IPSorgnaizeda regional workshop forstakeholders from IORA membercountries in collaboration withthe Ministry of External Affairs(MEA) at Hilton, Colombo, 30June. An outcome document wasproduced for IORA annualmeeting and the project wasapproved with seed fundingsupport from the Government ofSri Lanka. Tentaive f ist yearactivity paln was prepared andcommencement of the project ispending subject to receiving offunds. The team involves SamanKelegama, Athula Senaratne andKanchana Wickramasinghe.

Kanchana Wickramasinghe madea presentation on ‘An Overviewon Ocean Resources, EnergyResources and Biosecurity in theIndian Ocean Rim Region’ at theworkshop. In line with theregional workshop KanchanaWickramasinghe highlighted theneed for regional colloboration inthe following blog article.

Kanchana Wickramasinghe(2014), Tackling EnvironmentalChallenges in the Indian OceanWill Require Closer Collaborationin the Region, TalkingEconomicsBlog , 25 July 2014

In addition, involvement of IPSresearchers Athula Senaratne andKanchana Wickramasinghe in theNational Committee forEstablishing a Green AccountingSystem for Sri Lanka in theMinistry of Environment andRenewable Energy generatedsome outputs related to the themeof green economy and sustainabledevelopment practices. AthulaSenaratne prepared a policy brieftitled ‘Why Green Accounting’ forthe National Committee onEstablishment of GreenAccounting Mechanism in SriLanka of the Ministry ofEnvironment and RenewableResources.

Other publications andpresentations in relation to greeneconomy include,

Drained Out or NewPotential: Hydro Power andSri Lanka’s Energy Challenge,A blog article in TalkingEconomics subsequentlypublished in The Island, TheDaily Mirror and Daily FT, 22

March (By: Athula Senaratneand Chatura Rodrigo)

‘Payments to Eco-systemServices’, A guest lecture atthe Sri Lanka Association forthe Advancement of Science(SLAAS) organized by theMinistry of Agriculture, 25 to27 March. (By: AthulaSenaratne)

‘Water-Energy Nexus: SriLanka’s Experinece’ at theTERI workshop ‘Water-Energy Nexus’, New Delhi, 1to 4 September. (By: AthulaSenaratne)

Food Security

The study titled ‘A Study ofDemand, Supply and PriceBehaviour Relating to SelectedCrops and Livestock Products inSri Lanka’ funded by NSF underthe National Thematic ResearchProgramme on Food Security, iscurrently ongoing. This studycarries out a comprhensiveanalysis of avilability, affordability,accessibility and nutritional



aspects of food categories of rice,f ish and livestock products. Itinvolves quantitative andqulaitative analysis of demad andsupply systems and value chainsinvolved in respective productcategories. The study wascommenced in late 2013 and willbe continued until 2016. Thework is being undertaken by ateam of researchers includingAthula Senaratne, DilaniHirimuthugodage, ChaturaRodrigo, KanchanaWickramasinghe, ChandanaKarunaratne and Nisal Herath.

Kanchana Wickramasinghe andDilani Hirimuthugodagepresented the preliminaryf indings of the milk supply anddemand at the 8th AnnualResearch Forum of Sri LankaAgricultural EconomicAssociation held at the HectorKobbekaduwa Agrarian Researchand Training Institute (HARTI)on the 12th of December.Kanchana presented thedeterminants of milkconsumption in Sri Lanka, basedon household level data. Throughprimary data analysis, Dilani madeher presentation on ‘ImprovingMarket Affordability andAccessibility of Milk and MilkProducts in Sri Lanka’.

Athula Senaratne made apresentation on ‘IntegratingTraditional Agro-ecosystems andTechnology Management forAssurance of Food andNutritional Security: Village TankAquaculture and Divi NegumaProgrammes in Sri Lanka’, at the

Centre on Integrated RuralDevelopment for Asia and thePacif ic (CIRDAP) workshop on‘Technology Management forAssurance of Food andNutritional Security’, NationalInstitute of Rural DevelopmentNIRD, Hyderabad, 19 to 21 May.

The study on ‘Regional Networksfor National Food SecurityStrategies - National Consultant(Sri Lanka) For EffectiveApplication of KnowledgeNetworks for Development ofStrategies and Policies for FoodSecurity in Sri Lanka’ funded bythe UNESCAP- South and South–West Asia Off ice was carried –out by Dilani Hirimuthugodageand Dr. Saman Kelegama. Theoverreaching objective of thisstudy was to conduct a nationalcase study on the gaps andchallenges to in current foodsecurity framework strategies andfor implementing concreteactions for ensuring food securityin Sri Lanka. The study identif ied,through engagement with keynational and regionalgovernment and civil societyactors and stakeholders, thecapacity of knowledge networksat the national and regional levelsto share information, strategies,policies and good practicesbetween policymakers forovercoming implementationchallenges to greater food securityand meeting the Zero Hungerchallenge. Based on country casestudies in the region, apublication on ‘RegionalNetworks for Food Security’ willbe launched.

Agricultural Value Chains,Property Rights & Institutions

Dr. Parakrama Samaratungainitiated an agriculture valuechain study on ‘An Emerging‘Process Innovation’ in Agri-FoodIndustry in Sri Lanka’ funded byTTI. Chatura Rodrigo and DilaniHirimuthugodage are presentlycarrying-out the project and theresearch report is scheduled to bepublished in August 2015. Theobjective of this study is toevaluate the impacts of a process(or a business) innovation ofintroducing small or mediumscale processing and marketingenterprises in the spice sector ofSri Lanka in comparison to thetraditional supply chain. The datacollection of the study wasfocused on the peppersmallholders of Matale District ofSri Lanka.

Chatura Rodrigo published anarticle on ‘Learning from the BestPractices: Pepper SmallholderSector of Sri Lanka’, A blog articlein Talking Economicssubsequently published innewspapers The Island, The DailyMirror and Daily FT, 8 August.

Dilani Hirimuthugodage wasinvited to contribute a paper on‘Policy Interventions andIndustrial Support Needed toExpand the Floriculture Sector inSri Lanka’ to the ‘Proceedings ofthe National Symposium onFloriculture Research -2013’ whichis a publication of theDepartment of National BotanicGardens, Peradeniya. This paperdiscusses on floriculture value



chain actors and activities in SriLanka and providesrecommendations to strengthensmooth functioning of valuechain activities.

Dilani disseminated f indings ofthe floriculture study in the SriLanka Exporter Magazine July /September 2015 issue(forthcoming), titled‘Floriculture: A BloomingIndustry in Sri Lanka’.

The study title ‘IntellectualProperty Rights in ProtectingPlant Varieties and FarmersTraditional Knowledge in SriLanka’ funded by NationalScience Foundation of Sri Lanka(NSF) was completed in 2014. Theobjective of this study was topropose feasible protectionmethods and techniques to plantvarieties and farmers traditionalknowledge. Moreover, the studyattempts to identify issues,existing policies and policy gapswith regard to plant protectionespecially on rice varieties andevaluate the effectiveness of thepresent policy framework and thepresent legal and institutionalsystem relating to plant varietiesand farmers’ traditionalknowledge. The study was doneby Dilani Hirimuthugodage andParakrama Samaratunga.

Dilani is currently working onIPS working paper based onresearch f indings of the study andit will be completed andpublished in August 2015.

Dilani Hirimuthugodage (2014),‘Does Sri Lanka Need a New Seed

Act?’, A blog article in TalkingEconomics subsequentlypublished in newspapers TheIsland, The Daily Mirror andDaily FT, 22 May.

Dilani Hirimuthugodage (2014),‘The Trade Related IntellectualProperty Rights (TRIPs)Agreement and the Agriculturein South Asia: A Sri LankanPerspective’, Abstracts, 10th AsiaPacif ic Economic Association,Bangkok, Thailand.

Dilani Hirimuthugodage made apresentation on ‘IntellectualProperty Rights in ProtectingNew Plant Varieties : The Case ofSeed Paddy in Sri Lanka’, at theInternational Conference ofAgricultural Sciences, Universityof Sabaragamuwa, 9 and 10January.

Dilani Hirimuthugodage wasinvited to participate as apanelist at the panel discussionon ‘Science, Technology and IPRin South Asia’, at the 7th SouthAsia Economic Summit, 5-7November 2014, New-Delhi,India.

Trainings

Chatura Rodrigo attendedtraining on ‘AustralianAwards Fellowship’,Australia, 1 September to 8November. The trainingprogramme was hosted bythe department ofmanagement of theUniversity of Monash,Australia and the fundingwas by the Department of

foreign affairs and trade. Theprogramme was aimed atwriting a research paper ofhigh quality and publishing.The research paper was titled‘determinants of the fertilizerdemand: evidences form SriLanka’. The paper was writtenin collaboration with Dr.Lakmal Abeysekera, lecturerat the department ofmanagement, university ofMonash, Australia. The paperis currently under reviewwith the Journal ofAgriculture Economics.

Dilani Hirimuthugodageattended an academictraining programme on WTO,SPS, TBT and TRIPS whichwas conducted by theUniversity of Peradeniya andWorld Trade Organizationfrom 15 to 17 September 2014at the University ofPeradeniya.

Chatura Rodrigo attended thetraining programme on‘Environment Valuation’,South Asian Network forDevelopment andEnvironmental Economics(SANDEE), Nepal, 3 to 15March. The training was a saprt of the grant received bythe SNADEE. The project istitled ‘Economic Value ofOrganic Rice in Sri Lanka”.The project is scheduled tof inish by end of 2015.


Senior Research Staff

Manoj ThibbotuwawaResearch EconomistBSc (Peradeniya), MSc(Peradeniya), PhDCandidate (University ofWestern Australia)

Wimal NanayakkaraSenior Visiting FellowBSc (Peradeniya)

Priyanka JayawardenaResearch EconomistBSc (Colombo),MEcon (Colombo)

Kanchana WickramasingheResearch EconomistBSc (Peradeniya), MEcon(Colombo)

Shanika SamarakoonResearch EconomistBA (Nottingham),PhD (Nottingham)

Ganga TilakaratnaResearch FellowBA (Manchester), MPhil(Cantab), PhD (Manchester)

Athula SenaratneResearch FellowBSc, MPhil (Peradeniya),PhD (Deakin)

Dushni WeerakoonDeputy DirectorBSc (Queen's University ofBelfast), MA, PhD (Manchester)

Nisha ArunatilakeResearch FellowBSc (University of South U.S.A.),MA, PhD (Duke)

Chatura RodrigoResearch EconomistBSc (Peradeniya), MSc(Peradeniya), MSc (Colombo),MSc (Guelph)

Bilesha WeeraratneResearch FellowBA (Colombo), MA(Rutgers), PhD (CUNY)

Janaka WijayasiriResearch FellowBA (Sussex), MA (TheHague), PhD (Monash)

G. D. DayaratneManager, Health PolicyProgrammeBA (Peradeniya)

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Anushka WijesinhaBSc (UniversityCollege London),MA (Leeds)(Not in picture)


Junior Research Staff

Raveen EkanayakeResearch Off icerBSc (London), MPP (ANU)

Suwendrani JayaratneResearch Off icerBA (Peradeniya), MA (ANU)

Dharshani PremaratneResearch Off icerBA (Peradeniya), MA (ANU)

Sunimalee MadurawalaResearch Off icerBA (Colombo), MEcon(Colombo)

Dilani HirimuthugodageResearch Off icerBA (Colombo), MEcon(Colombo)

Neluka GunasekaraResearch AssistantBA (Colombo)

Nipuni PereraResearch AssistantBA (Colombo)

Samanthi BandaraResearch Off icerBA (Colombo),MSc(Chulalongkorn)

Nisal HerathResearch AssistantBA(UC Davis), MA(ANU)

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Kaushalya AttygalleResearch AssistantBA(Colombo)(Not in picture)

Sahan JayawardenaResearch AssistantBSc (University of Liverpool)(Not in picture)

Yolanthika EllepolaResearch AssistantMSc (London School ofEconomics)(Not in picture)


IPS Research Intern Programme

The IPS internshipprogramme offers short-termattachments to currentlyenrolled students or recentgraduates in economics orclosely related f ields. Theyprovide an opportunity towork with a senior re-searcher on a specif icresearch project, or to obtaina wider experience acrossresearch areas. The positionsare open to applicants withan interest in economicdevelopment issues, and aretypically for 2-6 months.

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Gimhani AlahakoonProject Intern(CIMA Sri Lanka)

Dushanthi DayanadaProject InternUniversity of Peradeniya

Dilani DanthanarayanaProject InternUniversity of Sabaragamuwa

Kashini GimhaniProject InternUniversity of Colombo

Kethumala KodikaraProject InternUniversity of Colombo

Chinthani SuriyamudaliProject InternUniversity of Colombo

Piymi GamageProject InternUniversity of Rajarata

Divya GowindasamyProject InternCIS Colombo

Aneesha GurugeProject InternUniversity of New York

Chamathi JayaratneProject InternUniversity of SriJayawardenapura

Mewan KiriellaProject InternSt. Thomas College, Colombo

Kawisha NiwanthiProject InternUniversity of Rajarata

Dinnaga PadmaperumaProject InternBritish School of Colombo

Keshni SridharanProject InternUniversity of Nottingham,UK


Think Tank Initiative(TTI) Funded Events/Programmes in 2014

CLIMATEnet Policy DiscussionForum

The Environment EconomicPolicy Unit had severaldiscussions with key stakeholderson the Policy Discussion Forum.The objective of the project is toidentify policy gaps and keystakeholders involved in differentimpact areas/sectors with highvulnerability to climate changeimpacts, and to propose policyactions to bridge these identif iedpolicy gaps. The project also aimsto assess the information needs ofrespective sectors, ways ofcoordinating the actions of keystakeholders, and resourcemobilization strategies thatcomplement the proposed policyactions.

An Emerging ‘ProcessInnovation’ in Agri-FoodIndustry in Sri Lanka and itsImpact on Employment andIncome Distribution

The Agriculture Economic PolicyUnit held a round of discussionsand in-depth interviews toevaluate the impacts of a process(or a business), innovation ofintroducing small or mediumscale processing and marketingenterprises in the spice sector ofSri Lanka and employment andincome (both factor andpersonal) distribution and socialinclusiveness, in comparison tothe traditional supply chain.

The Enviornment Economic Policy Unit RoundTable Conference

Seminars/Meetings

Publications/Studies

Fourth Regional Meeting ofThink Tank Initiative (TTI-RM4), ‘Asia in the New World:Emerging Research Themes’,Kathmandu, Nepal, during 9-10June. Dushni Weerakoon andNisha Arunatilake attended themeeting.

Attracting more women intothe labour force for inclusivegrowth: Trends, Issues andConcerns of Female LabourForce Participation in SriLanka by SunimaleeMadurawala

Talking Economics Digest

The ‘Talking Economics Digest’is a bi-annual publication of theIPS, which compiles the articlesfeatured on the IPS blog‘Talking Economics’ every 6months, together with featuresegments. Two issues of thedigest were produced with TTIgrant assistance.

Study on Value for Money ofHealth Services in Sri Lankaby Shanika Samarakoon

E-Waste and Health: Healthin All Policies by SamanthiBandara.


Think Tank Initiative(TTI) Funded Events/Programmes in 2014

Staff Training

The following training wereconducted for staff:

Specialist shared views oninforgraphics to all staff.

‘Writing Skills’ by SmritiDaniel for research andsupport staff.

Telephone Skills & BusinessWriting for support staff.

‘Writing Skills’ by IPM forsupport staff.

Qualitative Researchconducted for all Researchstaff.

Stata Training - Short-termResearch Studies usingStatistical Software foresearch staff.

Training on Advance Excelfor all staff.

‘How to Determine theSample Size’ Macro analysisof environment and naturalresources in the economy ofSri Lanka was also conductedduring the year.

4th Regional Meeting in Kathmandu

MED-MIG Meeting at IPS

‘Writing Skills’ training for Research andSupport Staff

‘Infographics’ session with a Specialist forResearch and Support Staff

Can People in Sri Lanka’s EstateSector Break Away from PoorNutrition: What CausesMalnutrition and How It CanBe Tackled’ by PriyankaJayawardena

Literature Review on Occupational Safety & HealthPolicy for Sri Lankaby Sunimalee Madurawala & Dr.Nisha Arunatilake.

Study on Investment inEducation by Dr. NishaArunatilake.

IPS launched the ‘Meeting theDevelopment Challenges ofMigration (MED_MIG) Project’,which aims to facilitate andconduct and timely research to f illknowledge gaps in developingeffective policies to maximizedevelopment benef its of migra-tion. The project was funded bythe End of Phase 1 OpportunityFund of the Think Tank Initiative(TTI).


SUPPORTSERVICES

Support Unit Heads

Premila Gamage,PhD (Leeds),Hon. FCILIP,Librarian

Nandaka Pothuwewa,BSc (Kelaniya),CCNA, VCP,Head of InformationSystems

Dishnika Perera,BA (Coventry),ManagerCommunications &Strategic Outreach

Charmaine Wijesinghe,ManagerPublications &Events

Jayani Ladduwahetty,ACMA,CGMA (UK),Director Finance &Administration

Finance andAdministration

Jayani LadduwahettyDirector Finance & Administration

Ranushi JayatilakaAccountant

G. L. B. PooliyaddaAdministrative Off icer

Deepika NawavickramaAdministrative Assistant

Tuan BangsajayahMaintenance Off icer

Nilanthi AlahakoonSecretary

Neranjalee PereraReceptionist

Publications andCommunications Unit

Dishnika PereraManager Communications andStrategic Outreach

Charmaine WijesingheManager Publications & Events

Savani JayasooriyaCommunications Off icer

Amesh ThennakoonPublication Off icer

Ayoni RangalaCoordinating Secretary/HR Assistant

Asuntha PaulSecretary

Nayomi JayakodySecretary

D. D. M. WaidyasekeraEditor

Library

Premila GamageLibrarian

Subhashini JayaweeraAssistant Librarian

Lalani PremasingheLibrary Assistant

Information Systems Unit

Nandaka PothuwewaHead of Information Systems

Mohammed MufarisData Base Manager

Nalaka LiyanapathiranaWeb Manager

Roshan KaluarachchiWeb Developer cum NetworkAssistant

Other Support Staff

A. G. AmarasenaOff ice Aide

P. U. K. RajasiriDriver/ Off ice Aide

H. S. UdayakanthaDriver/Off ice Aide

G. R. WickramsenaDriver/ Off ice Aide

J. K. P. Nihal WasanthaDriver


Our f inancial strength

IPS has been able to secure anumber of high prof ile projects in2014, which has resulted in anincrease of project income ofabout 50% as compared to thesame period in 2013. Due to thededication and the strenuouswork of our staff, the Institutemanaged to secure TTI Phase IIfunding. Income earned from TTIfunding accounts to more than17% of the total income earned in2014.

Within the year, interest rateswere further slashed and due towhich the Institute also had a set-back on its income earned frominvestments. 2014 saw theinstitute experience a 25%lessening on income earned fromits investments.

A key venue for many conferencesand business functions, the IPSAuditorium has been enjoyingcontinuous revenue growth fromits launch back in 2011. Thegrowth in the revenue issignif icant given the fact that thevenue is still at its infancy. For thef irst time, the revenue generatedfrom the renting of theauditorium crossed the Rs.1million mark in 2014.

Finance andAdministration Institutional Income for

2014Income from hiringthe auditorium Miscellaneous

Income 1%Income arising fromcapital grant amortization 5% Grant from the

Government ofSri Lanka 12%

Contributionfrom theEndowmentTrust Fund 4%

Project income47%

Income fromInternationalDevelopmentResearch Centre(IDRC) TTIGrant 17%

Income fromSeminar/Workshops 1%

Interest Income13%

Total incomeRs.133,766,045

L-R : Nilanthi Alahakoon (Secretary to ED), Ranushi Jayatilaka, (Accountant), TuanBangsajayah (Maintenance Off icer), G. L. B. Pooliyadda (Administrative Off icer),

Bernedette Prabaloginy (Receptionist), Niluka Perera (Accounts Assistant),Jayani Ladduwahetty, Director Finance & Administration (not in picture), Deepika

Nawavickrama, Administrative Assistant (not in picture)

Improvements to ourprocesses

With the changing businessenvironment, the need for a timetracking system for humanresources was apparent. The latterpart of 2014 saw the Institute

implement the Peoples HRsystem. The system is aimed atstrengthening the current HRactivities at IPS whist lending ahelping hand to the smoothtracking of project relatedactivities.

SUPPORT SERVICES


Communications &Outreach

Expanding research outreachthrough effective use ofcommunication channels is oneof the key objectives of theInstitute, and is mainly led by thePublications andCommunications Unit (PCU) ofthe IPS. The PCU is overallresponsible in disseminating themulti-dimensional researchactivities of the Institute to theoutside world through mediumsincluding publications, print andbroadcast media, digital and socialmedia, as well as events anddialogues.

Research Disseminationthrough Publications

Publications are one of the mainmethods in which the Institutedisseminates its research f indings,and informs policy makers onissues related to socio-economicpolicy development in thecountry. The PCU, which overseesthe production and disseminationof IPS publications, not onlyensures that the quality ismaintained, but also ensures thatwider accessibility and audienceengagement is received, bothlocally and internationally.

Sales of IPS publications aregenerally carried out at the IPSpremises, and also throughselected dealers island-wide.Apart from overall monitoring ofthe publications dealers, necessaryfollow-ups are also carried out bythe PCU. Various marketingstrategies have also been adopted,to achieve the targets of thepublications sales of IPS.

Outreach through a StrategicRelationship with Media

Over the years, the Institute hasmaintained a close relationship

L-R : Ayoni Rangala (Coordinating Secretary/HR Assistant), Nayomi Jayakody (Secretary), Charmaine Wijesinghe(Manager, Publications and Events), Amesh Thennakoon (Publications Off icer), Asuntha Paul (Secretary),

Dishnika Perera, (Manager, Communications and Strategic Outreach),Savani Jayasuriya (Communications Off icer) - not in picture.

SUPPORT SERVICES


@TalkEconomicsSL

Discuss.Debate.Comment

10,000VIEWS

SUPPORT SERVICES

with print and broadcast media inSri Lanka. Since visibility anddissemination are key priorities ofthe Institute, this strategicpartnership with the media hasfacilitated to a great extent inpropagating the socio-economicpolicy research of IPS to a wideraudience both within Sri Lankaand beyond. IPS news shared inthe form of press releases andresearch articles are well receivedby the readers, with IPS receivingwide coverage for IPS events andactivities in the media.

Other Channels

The PCU is also engaged in there-packaging of IPS academicresearch into more accessibleformulations such as Policy

Insights, with the aim ofeffectively engaging with thetarget audiences - national,regional and internationalstakeholders, of the Institute.

Regular review meetings todiscuss and obtain feedback oncontemporary IPS work and moreinformal round table discussionswith key stakeholders are amongthe measures that will be lookedinto by the PCU. In addition, weare targeting the vernacularlanguage audiences throughoptions such as TV documentariesand regular panel discussions.

Social Media

Aside from the traditionalmediums of outreach, theInstitute has also embraced a

series of social and digital mediachannels to generate widerinterest around IPS and tocommunicate key insights onsocio-economic policy issues. TheIPS blog ‘Talking Economics’ isone of the main modes ofoutreach – with regular posting of‘long-read’ essays, op-eds andrapid-response articles. In 2014,Talking Economics carried 41articles, which were alsopublished by local print media.Further, the Institute has beenactively using channels such asFacebook, Twitter YouTube,Scribd , etc., to reach a wideraudience. In 2014, the InstituteFacebook reached over 1100 PageLikes, while the followers on theTwitter @TalkEconomicsSL wentup over 850.

2014

800Reached

1500Fans SUBSCRIBERS

23 NEW UPLOADS16,520 VIEWS

OVER 500 IMAGESOF IPS EVENTS &ACTIVITIES

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Library

The Library continues to developboth its collections and services toensure that it contributes toadvance the Institute’s research.Working closely with theInstitute’s researchers andapplying various methods to assessand monitor their needs, libraryconsiderably expanded itscollection in 2014. In addition todirect purchasing, the libraryobtained publications throughexchange programmes and giftsfrom various local, regional andinternational organizations.Library also continued itssubscriptions to local, andinternational print journals. Therepository, which the librarymaintains on Sri Lankaneconomic and sectoral policy alsogrew to a large extent in 2014.

Providing continuous access toonline full-text databases is a hugechallenge faced by librarians allover the world. Thanks to IDRC/Think Tank Initiative (TTI), as agrantee Library was able to gainaccess to a range of online full-text databases. However, it wasobserved that full-text access isnot always available throughthese databases. Thus, library hasto request full-text from IDRC butdue to reasons such as timedifferences, holidays etc., it causesdelay in fulf illing researchers’requests for such items. This wasdiscussed at Library Committeemeetings and currently Library isconsidering to reactivate itssubscription to JSTOR asrequested by researchers.

SUPPORT SERVICES

As a result of Library’s continuoususer education activities, usage oflibrary OPAC, Intranet and digitallibrary (ecoNspace) has increased.More and more researchersstarted uploading their researchpublications to ecoNspace. Inorder to further enhance services,a user survey will be carried out inearly 2015.

Collection Development 2014

BOOKS PAMPHLETS

5,89612,272


As in previous years, aconsiderable number of nationaland international professionalsand students used its services byvisiting the library.

Whilst actively participating andstrengthening its national andinternational networks such asEconomics and Banking Networkof Sri Lanka (EBankNet), SriLanka Science and TechnologyInformation Network(SLSTINET) and Programme forthe Enhancement of ResearchInformation (PERI), the libraryalso sought the feasibility ofbecoming a member of otherrelevant networks such as HealthLiterature Libraries and

SUPPORT SERVICES

The Librarian attended themeeting of Regional StandingCommittee of Asia and Oceania(RSCAO) of the InternationalFederation of Library Associationsand Institutions (IFLA) and alsopresented a paper at the WorldLibrary and InformationConference of IFLA, during 15-22August, in Lyon, France.

Library Staff: Premila Gamage, (Librarian),Dilrukshi Ariyaratne, (Assistant Librarian),

Subhashini Jayaweera (Assistant Librarian),Lalani Premasinghe (Library Assistant),

Udari Chathurika (Library Assistant)

Information Services (HELLIS)network and AgriculturalInformation Network (AgriNet).

Priorities for the Coming Year

The main concern of the library isdelivering an eff icient andeffective information service toadvance the Institute’s research.Priorities in 2015 would be toadvance the Institute’s research byfacilitating the availability andaccessibility of informationresources irrespective of formatand location and to create a teamof highly skilled, trained andmotivated staff in suff icientnumbers to carry out libraryservices and activities.

Premila Gamage, Librarian at the meeting of Regional Standing Committee of Asia andOceania (RSCAO) of the International Federation of Library Associations and

Institutions (IFLA) in Lyon, France.


InformationSystems

L-R : Nalaka Liyanapathirana, (Web Manager), Nandaka Pothuwewa, (Head ofInformation Systems), Roshan Kaluarachchi (Web Developer cum Network Assistant),

Mohammed Mufaris (Data Base Manager)

The Information Systems Unit(ISU) of the IPS plays a pivotalrole in execution of all ITactivities such as Software,Hardware, Networking and ITInfrastructure Management, WebDevelopment, Maintenance andInformation Dissemination,Database Development,Maintenance and Management.Thereby it supports the Instituteto remain competitive as aregional centre of excellence.

A completely new Local AreaNetwork (LAN) wasconceptualized and implementedwith the objective of meeting theIPS ICT demands. An integratedunif ied communication networkwith IP phones was put in placeimproving communication,conferencing and connectivity,and at the same time, reducingthe cost of installing a separatetelephone network.

The newly introduced VirtualPrivate Networking systemfacilitates the researchers tosecurely connect to the IPSnetwork from various locationsoutside IPS premises (e.g., whileat conferences abroad, in thef ield, or working from home) andgain access to necessary resources,communicate remotely via softphones thereby enablingresearchers to collaborate andengage in virtual team work.

Audio and Video conferencingfacilities were also integrated tothe network so that this facilitycould be used by the staff whenthey are in the Conference roomsand Auditorium. New serversystems running on virtualizationsystem have helped to minimizethe number of physical servers aswell as running multipleoperating systems and multipleapplications on the same physical

servers. The un-interrupted powerfor these servers is being suppliedby two on-line UPS. .

IPS new Web, Intranet & IPS Blogwere launched in September 2014thereby giving access to socialnetworks, Twitter, Facebook,YouTube and Flicker.

Priority in 2015 would be tomodify the appearance of theexisting web.

SUPPORT UNITS

Researchers at an Audio conference in the IPS conference room


Repositioning in the GlobalApparel Value Chain in thePost-MFA Era: Strategic Issuesand Evidence from Sri Lankaby Prema-Chandra Athukoralaand Raveen EkanayakeInternational Economic Series No.10, November.

Recent Trends in InternationalTrade: Implications for SriLankaInaugural Gamani Corea MemorialLecture by Saman Kelegama,November.

Towards a Stronger, Dynamicand Inclusive South AsiaEdited by Saman Kelegama andAnushka Wijesinha, October.

Sri Lanka State of the Economy2014 ReportTheme: Rising Asia - Opportuni-ties and Challenges for Sri LankaOctober.

Female Employment forInclusive Growth: Trends,Issues and Concerns of FemaleLabour Force Participation inSri Lankaby Sunimalee MadurawalaLabour Economic Series No. 16September.

Can People in Sri Lanka’s EstateSector Break Away from PoorNutrition: What Causes Malnu-trition and How It Can BeTackledby Priyanka JayawardenaHealth Economic Series No.1September.

IPS PUBLICATIONS2014

Sri Lanka National HealthAccounts 2010-2011,September.

South Asia EconomicJournal Vol. 15 No.1March, and Vol .15 No.2September.

Sri Lankan FemaleDomestic Workers inthe Middle East: DoesRecruitment through anAgent Minimize Vulnerability?by Bilesha WeeraratneLabour Economic Series No.18September .

Returning Home: Experiences& Challengesby Suwendrani Jayaratne, NipuniPerera, Neluka Gunasekera andNisha ArunatilakeLabour Economic Series No.17September.

Labour Migration in Sri Lanka:Select Annotated BibliographyCompiled by: DilmaniWarnasuriya and Premila GamageLabour Economic Series No.15August.

Female Entrepreneurship andthe Role of Business Develop-ment Services in PromotingSmall and Medium WomenEntrepreneurs in Sri LankaJointly Published with OxfamInternational, Sri Lanka,May.

Talking Economics Digest (July– Dec 2013) March.


STAFFACHIEVEMENTS

Executive Director, was conferred with an HonoraryFellowship by the Sri Lanka Economic Association(SLEA), Centre of Banking Studies,Central Bank of SriLanka, 24 October.

Kanchana Wickramasinghe received President’s Awardfor Scientific Publications for her research paper titled‘Cost to government health-care services of treatingacute self-poisonings in a rural district in Sri Lanka’,published in the Bulletin of the World HealthOrganization in 2009.

Kanchana Wickramasinghe won the Top OutstandingYoung Persons (TOYP) in Sri Lanka Award 2014 forPersonal Accomplishment in November 2014. Theprogramme is organized by the Junior ChamberInternational (JCI) Sri Lanka. The Programme serves torecognize ten outstanding individuals, whose personaland professional achievements in a chosen f ield areexemplary, outstanding and nationally benef icial.Kanchana Wickramasinghe was the only female to winthe TOYP Award in the year.

Kanchana Wickramasinghe won the First Prize for theJapanese Award for Outstanding Research onDevelopment (ORD) in the Global DevelopmentAwards and Medals Competition of the GlobalDevelopment Network (GDN). This year, 388submissions from 72 countries had been received for theCompetition. The ORD is a competitive research grantprogramme that identif ies and funds outstandingresearch proposals in developing countries andtransition economies with high potential for excellencein research and clear policy implications for addressingdevelopment issues. The winners were selected by aneminent jury at GDN’s 15th Annual Global DevelopmentConference held in Accra, Ghana during 18-20 June, 2014,attended by over 500 practitioners in the f ield ofdevelopment where f inalists presented their proposals. Kanchana’s research proposal was on “Demand forClimate Insurance by Dry Zone Farmers in Sri Lanka”.

Ranushi Jayatilake, Accountant, IPS, obtained herMasters in 2014 (Master of Business) from theUniversity of Kelaniya.

Executive Director honoured by SLEA

Kanchana receving the Presidential Award

Kanchana receving the TOYP Award

Kanchana with GDN Medal and Certificate

Ranushi capped with Masters


Trade Along the New Silk Road:Promoting RegionalIntegration through EconomicDevelopment

Janaka Wijayasiri, Research Fellow, andRaveen Ekanayake and SuwendraniJayaratne, Research Off icers of the IPSwere selected to participate in the, ‘Trade Along the New Silk Road:Promoting Regional Integrationthrough Economic Development’organized by the U.S. Department ofState’s International VisitorLeadership Programme (IVLP) in 2014.

Raveen participated in the 17 May-7June 2014 programme while Janaka andSuwendrani participated in the 3-21November 2014 programme.

This project, designed to strengtheneconomic cooperation and traderelationships among South andCentral Asian countries in support ofthe “New Silk Road Initiative”, gavethe participants an understanding ofthe domestic and internationaleconomic forces that influence U.S.trade policy and the policy-makingprocess. Through meetings and sitevisits over 3 weeks, the participantsexamined the ideal conditions, andchallenges, for facilitating andsustaining cross border commerce,including policy formulation, politicalrelationships, border security, and landand inland water port operations.

The U.S. experience with the NorthAmerican Free Trade Agreementamong the United States, Canada, andMexico, which created the world’slargest free trade area, was also closelyexamined.

STAFF ACHIEVEMENTS

Raveen Ekanayake participating at the IVLP programme

Janaka Wijayasiri and Suwendrani Jayaratne participating at the IVLPprogramme


IN-HOUSESEMINARS

Guest lecture on ‘Energy Policy Issues inSouth Asia: Implications for Sri Lanka’ byDr. Herath Gunatilake, Principal EnergyEconomist, ADB, 19 January.

‘Changing Incomes and Food Prices: TheImplications for Rural and Urban FoodSecurity in Sri Lanka’ by Dr. Shyama Ratnasiri,Lecturer, Department Accounting Finance andEconomics, Griff ith University, Australia, 8January.

‘Driving Research and Innovation Strategy:Lessons from Korea’s ‘Project Han’ by Prof.Heeseung Yang, Graduate School ofmanagement, Sejong University, Korea, IPS, 7February.

‘Why the Emperor’s New Clothes are Made inSri Lanka’ by Raveen Ekanayake, ResearchAssistant, 26 February.

‘Environmental Management Practices in theHotel Sector’ by Kanchana Wickramasinghe,Research Off icer, IPS, 27 March.

‘Future Risks of Climate Change: A Review ofRecent Assessments Presented in FifthAssessment Report (AR 5) of IPCC’ by AthulaSenaratne, Research Fellow, IPS, 24 April.

‘A Micro Analysis of ContextualDeterminants of Labour Migration in SriLanka’ by Dr. Bilesha Weeraratne, ResearchEconomist, IPS, 29 May.

‘National Medicinal Drug Policy: Implicationfor Health System’, by Dr. Manuj Weerasinghe,Visiting Fellow, IPS, and Samanthi Bandara,Research Off icer, IPS, 23 July.

‘Will South Asian Economies Benefit fromPan-Asian Integration? The Challenge forthe Modi Government’, by Dr. GaneshanWignaraja, Director of Research, AsianDevelopment Bank Institute (ADBI), Tokyo, 7July.

‘Demand for Climate Insurance by Dry ZoneFarmers in Sri Lanka’, by KanchanaWickramasinghe, Research Off icer, IPS, 19August.

‘Can People in Sri Lanka’s Estate SectorBreak Away from Poor Nutrition?’, byPriyanka Jayawardena, Research Off icer, IPS, 24September.

‘The Effect of Subsidized Health Insuranceon Women’s Healthcare Use in Indonesia’ byShanika Samarakoon, Research Economist, IPS,26 June.

‘The Social Protection Index 2012: Assessingthe Results for Sri Lanka’, by SahanJayawardena, Research Assistant, IPS, 18December.

‘Female Employment for Inclusive Growth:Trends, Issues and Concerns of FemaleLabour Force Participation in Sri Lanka’, bySunimalee Madurawala, Research Officer, IPS,28 October.

‘Accessibility and Affordability of Milk andMilk Products in Sri Lanka’, by DilaniHirimuthugodage, Research Officer, IPS, 27November.

JANU

ARY

FEBR

UARY

MARC

HAP

RIL

MAY

JUNE

JULY

AUGU

STSE

PTEM

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OCTO

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NOVE

MBER

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MBER


IPSEVENTS

Launch of the ‘Meeting theDevelopment Challenges ofMigration (MED_MIG) Project’,organized by IPS, IPS ConferenceRoom, 6 March.

Seminar on ‘Dr. Gamani Corea’sContribution to Domestic &International Economic Policy’,organized by the Gamani CoreaFoundation (GCF), IPS and theMarga Institute, IPS Auditorium,3 April.

Launch of IPS and Oxfam JointPublication ‘FemaleEntrepreneurship and the Roleof Business DevelopmentServices in Promoting Smalland Medium WomenEntrepreneurs in Sri Lanka’,IPS Conference Room, 9 May.

Regional workshop on‘Establishing a Centre ofExcellence (CoE) on OceanSciences and Environment forthe Indian Ocean RimCountries’, in collaboration withthe Ministry of External Affairs,Hilton Colombo, 30 June to 1 July.

International Conference on‘Policies for MainstreamingMigration into Development inSri Lanka’, IPS Auditorium, 14August.

Advisory Committee Meeting forthe study on ‘South AsianCountry Study on Productswith Regional Trade Potentialand Associated Non-tariffBarriers, with Special Focus onWomen Micro Small and

Medium Enterprises(WMSMEs): A Case of SriLanka’, IPS Conference Room,14 October.

Dissemination workshop on‘Environmental ManagementPractices in Hotel Sector inSri Lanka’, IPS Auditorium, 14October.

Workshop on ‘Trade Analysisand Economic Integration inPakistan-India Relations:The Regional Dimension’, IPSjointly organized with InterAnalysis Ltd., IPS ConferenceRoom, 11 to 15 November.

Round Table Discussion on‘Digital Dynamism’, conductedby IPS in partnership withGoogle as a follow up to apreviously published IPSWorking Paper titled‘Fostering Innovation to Fast-forward Growth in Sri Lanka’,IPS Conference Room, 10December.

Dissemination meeting on ‘AnEvaluation of theImplementation ofGuidelines in SchoolCanteens’, based on a studyconducted by IPS, Ministry ofEducational Services, 15December.

EVENTS ORGANIZED BY IPS


Hambantota District Chamber ofCommerce - 20th Anniversary, SriLanka Singapore Conference Hall,Siribopura, Hambantota, 27thJanuary

SAARC Development Fund (SDF)Brainstorming Workshop, Le-Meridien, New Delhi12 – 14 February

Conference on the ‘PoliticalEconomy of Maritime Africa inthe Indian Ocean Region’ Inter-continental Hotel, Nairobi, Kenya,12-14 March

International Conference on‘Financial Inclusion, Regulationand Education’, Asian Develop-ment Bank Institute, Tokyo, Japan,23 April

Regional Workshop on ‘WTO andPost-Bali Work Programme forAsia’, Ruposhi Bangla Hotel,Dhaka, Bangladesh,5-6 May

A presentation on ‘China as aBalancer in South Asia: AnEconomic Perspective’ at theCentre for Policy Dialogue, Dhaka,Bangladesh, 7 May

Second Asian Think Tank Summiton the theme ‘Promoting Re-gional Economic Cooperation andIntegration’ at the Asian Develop-ment Banking Institute (ADBI),Tokyo, Japan, 20-22 May

EXECUTIVE DIRECTOR’SPARTICIPATION ATCONFERENCES

Chinese Academy of SocialSciences (CASS) Forum 2014,Beijing, China, 27-28 May

‘Sri Lanka 2.0 & Beyond: FastTracking Economic Develop-ment 2020’, CMA InternationalManagement AccountingConference 2014, Taj SamudraHotel, Colombo, 18-20 June

‘Financial Inclusion in SriLanka: Issues and Challenges’,Association of ProfessionalBankers of Sri Lanka, Bank ofCeylon Auditorium, Colombo,9 September

Asia-Pacif ic Trade Econo-mists’ Conference on ‘Trade inthe Asian Century – Deliveringthe Promise of EconomicProsperity’ ESCAP Secretariat,Bangkok, Thailand 22-23September

Dhaka Round Table on‘Reviving the MultilateralTrading System: Post-BaliIssues’, Westin Hotel, Dhaka,22-24 November

South Asian Association ofRegional Cooperation(SAARC) Charter Day8 December

IPS EVENTS


RESEARCH STAFFPRESENTATIONS IN 2014(Domestic)

Presentation on ‘IntellectualProperty Rights in ProtectingNew Plant Varieties : The Case ofSeed Paddy in Sri Lanka’,International Conference ofAgricultural Sciences, Universityof Sabaragamuwa, 9 and 10January (By: DilaniHirimuthugodage).

Presentation on ‘Microf inance asa Tool for Empowering theConflict Affected Communities’at the seminar on Microf inancefor Conflict affectedCommunities’ organized by thePathfunder Foundation, BMICH,10 January (By: GangaTilakaratne).

Guest lecture on ‘Payments toEco-system Services’ at Sri LankaAssociation for the Advancementof Science (SLAAS) organized bythe Ministry of Agriculture, 25 to27 March (By: Athula Senaratne).

Presentation on ‘Youth,Technology and Agriculture in SriLanka’ at the World Conferenceon Youth 2014, BMICH, 8 to 10May (By: Anushka Wijesinha).

Presentation on ‘FemaleEntrepreneurship and the Role ofBusiness Development Services inPromoting Small and MediumWomen Entrepreneurship in SriLanka’, IPS, 9 May (By: SunimaleeMadurawala).

Presentation on ‘Developing aSystem for University-Business

Linkages in Sri Lanka’ at theseminar on ‘StrengtheningUniversity-Business Linkages’,organized by GIZ, CinnamonGrand, Colombo, 23 May (By:Anushka Wijesinha).

Guest lecture on ‘Has E-WasteDevastated the Country? AReview of the Impact of E-wastein Sri Lanka’ for the meeting ofRotary Club of Colombo Regency(RCCR), Royal Colombo Golf Club,Borella, 23 May (By: SamanthiBandara).

Presentation on ‘An Overview onOcean Resources, EnergyResources and Bio-security in theIndian Ocean Rim Region” at theregional workshop on“Establishing a Centre ofExcellence on Ocean Sciencesand Environment for the IndianOcean Rim Countries’, Hilton,Colombo, 30 June (By: KanchanaWickremasinghe).

Presentation on ‘Climate ChangeChallenges Faced by Indian OceanRim Countries’ at Indian OceanRim Association (IORA)workshop in Colombo, 30 June(By: Athula Senaratne).

Presentation on ‘SME CreditGuarantee Scheme’ to membersof Central Bank Financial SystemStability Consultative Committee,CBSL Conference Room, 5 June(By: Anushka Wijesinha).

IPS EVENTS

Samanthi Bandara making a presentation inKandy

Sunimalee Madurawala making a presenta-tion at the IPS-Oxfam book launch

Athula Senaratne at the IORA workshop inColombo

Presentation on ‘InnovationPolicy Landscape’ to visitingWIPO delegation, Registrar ofCompanies Conference Room, 6June (By: Anushka Wijesinha).

Presentation on ‘Socio-economicDeterminants of Child andMaternal Malnutrition in theEstate Sector of Sri Lanka’ at theSecond International Conferenceon ‘Global Public Health’,Negombo, 3 to 4 July (By:Priyanka Jayawardena).


RESEARCH STAFFPRESENTATIONS IN 2014(Domestic)

Dilani Hirimuthogodage making apresentation at HARTI

IPS EVENTS

Presentation on ‘Constraints forAdoption of EnvironmentalManagement Practices in theHotel Sector in Sri Lanka’, at‘Tropical Tourism OutlookConference: Nature, Culture andNetworking for SustainableTourism’, Hotel Kandalama, 9 to 10August (By: KanchanaWickremasinghe).

Presentation on ‘Reintegration ofReturnee Migrant Workers in SriLanka’ at the Conference, ‘Policiesfor Mainstreaming Migrationinto Development in Sri Lanka’,IPS, 14 August (By: SuwendraniJayaratne).

Presentation on ‘FemaleDomestic Workers in the MiddleEast: Does Recruitment throughan Agent MinimizeVulnerability?’ at the conferenceon ‘Policies for MainstreamingMigration into Development inSri Lanka’ IPS, 14 August (By:Bilesha Weeraratne).

Presentation on ‘Accessing NewEmployment Markets Abroad’ atInternational Conference on‘Policies for MainstreamingMigration into Development inSri Lanka’, IPS, 14 August (By:Janaka Wijayasiri).

Presentation on ‘Impact ofMigration and Remittances onSocial Mobility in Sri Lanka’ atthe workshop on ‘AsianApproaches to Social MobilityExperience, Lessons and

Opportunities for Cooperation’,Cinnamon Grand, 21 August (By:Nisha Arunatilake).

Presented the research proposalon ‘Why Poverty has Increased inMonaragala’ to the ChiefSecretary and other off icials ofthe Uva Provincial Council, 15October (By: Ganga Tilakaratne).

Presentation on ‘Determinants ofMilk Consumption in Sri Lanka’,at the ‘Annual Research Forum ofSri Lanka Agricultural EconomicAssociation’, HectorKobbekaduwa Agrarian Researchand Training Institute (HARTI), 12December (By: KanchanaWickremasinghe).

Presentation on ‘ImprovingMarket Affordability andAccessibility of Milk and MilkProducts in Sri Lanka’, at the ‘8th

Annual Research Forum of SriLanka Agricultural EconomicAssociation’, HectorKobbekaduwa Agrarian Researchand Training Institute, 12 and 13 Janaka Wijayasiri making a presentation

at the Migration Conference

December (By: DilaniHirimuthugodage).

Presentation on ‘TechnologyDisposal: An Exploratory Study ofthe E-waste Management in SriLanka’, at the 5th InternationalConference on Sustainable BuiltEnvironment (ICSBE), Kandy, 14December (By: SamanthiBandara).

Nisha Arunatilake at the Impact of Migration Conference in Colombo


Presentation on ‘AgriculturalAdaptation Practices in Sri Lanka’at SAWTEE workshopKathmandu, 11 to 15 March (By:Athula Senaratne).

Presentation on ‘Think Tanks:Contributions, Challenges andSolutions’ at a conference on ‘TheStatus and Role of Social ScienceResearch in Asia: EmergingChallenges and Policy Issues’organized by the Indian Councilof Social Sciences, New Delhi,India, 13 to 15 March (By: DushniWeerakoon).

Presentation on ‘Gender Equalityand Empowering Young Womenin Sri Lanka’, at the South AsianRegional Conference on ‘Women,Work and Poverty’, Islamabad,Pakistan, 17 and 18 April (By:Sunimalee Madurawala).

Presentation on ‘IntegratingTraditional Agro-Ecosystems andTechnology Management forAssurance of Food andNutritional Security : VillageTank Aquaculture and DiviNeguma Programmes in SriLanka’ at National Institute ofRural Development NIRD -Centre on Integrated RuralDevelopment for Asia and thePacif ic (CIRDAP) workshop,Hyderabad, 19 to 21 May (By:Athula Senaratne).

Presentation on ‘Demand forClimate Insurance in Sri Lanka:Comparative Study of Dry ZoneRain-fed Farmers and CoastalFishers’ at the ‘Fifteenth Annual

Global Development Conferenceof the Global DevelopmentNetwork (GDN)’ Accra, Ghana, 18to 20 June (By: KanchanaWickremasinghe).

Presentation of the 1st draft of theTrade Facilitation Sri Lanka CaseStudy at the ‘Project AdvisoryCommittee Meeting and theResearchers Meeting’ of the SouthAsian Trade and TransportFacilitation Audit Project, Nepal,3 and 4 July (By: SuwendraniJayaratne).

Presentation on ‘Water - EnergyNexus’ at TERI workshop, NewDelhi, 1 to 4 September (By:Athula Senaratne).

Presentation on ‘A quasi-Experiment on the Effect of

E-learning on Students’Mathematics Scores and Attitudesin Sri Lanka’, (in absentia)’ at theconference ‘Making ImpactEvaluation Matter: BetterEvidence for Effective Policies andProgrammes’, Philippines, 5September (By: BileshaWeeraratne).

Presentations on ‘FemaleDomestic Workers in the MiddleEast: Does Recruitment Throughan Agent MinimizeVulnerability?’ and ‘A Quasi-experiment on the Effect of E-learning on Students’Mathematics Scores and Attitudesin Sri Lanka’ at ‘New York StateEconomic Association - AnnualConference’, Albany, New York,USA, 11 October (By: BileshaWeeraratne).

RESEARCH STAFFPRESENTATIONS IN 2014(Overseas)

Suwendrani Jayaratne presenting the 1st draft ofTrade Facilitation; Sri Lanka Case Study in Nepal

Sunimalee Madurawala presenting at the SouthAsian Regional Conference in Pakistan

IPS EVENTS


Dushni Weerakoon moderated asession on ‘Addressing Povertyand Inequality’ at the 2nd ADBThink-Tank Development Forum2014 on ‘Promoting Innovationand Inclusion for a ProsperousAsia’ organized by the ADB andKorea Development Institute(KDI), Seoul, Korea, 21-22November.

Presented a paper on ‘Migrationand Social Mobility in Sri Lanka’at the workshop on ‘SocialMobility: Experiences and Lessonsfrom Asia’, Seoul, Korea, 24 and 25November (By: NishaArunatilake).

Presentation on ‘The LabourMarket in Sri Lanka’ at theICRIER-World Bank Conferenceon ‘Jobs for Development:Challenges and Solutions’, IndiaHabitat Centre, New Delhi, 1 to 2December (By: NishaArunatilake).

Presentation on ‘LabourMigration and Development:Perspectives from Sri Lanka’ atthe conference on ‘Jobs forDevelopment: Challenges andSolutions’, organized by ICRIER,New Delhi, India, 2 December (By:Bilesha Weeraratne).

Presented the country paper on‘Social Protection in Sri Lanka’ atthe international conference on‘Meeting the Challenges ofEmployment and SocialProtection in South Asia’, NewDelhi, India, 14 to 16 December(By: Ganga Tilakaratna).

RESEARCH STAFFPRESENTATIONS IN 2014

(Overseas)

Ganga Tilakaratna presenting the country paper on ‘Social Protection inSri Lanka’, in New Delhi

Bilesha Weeraratne making a presention in New Delhi

Dushni Weerakoon moderating a session at the ADB Think TankDevelopment Forum

IPS EVENTS


Going Beyond Research...

Doing our own thing - the IPS staff had the privilege of doing aBBQ evening in July which was a team building event

IPS year end party took place at the Executive Lounge in December.The staff was treated to a whole new experience of games and a

hamper draw

Participants attending the Five Day workshop on ‘Trade Analysisand Economic Integration’ organized by IPS and InterAnalysis

Ltd. were taken on a city tour and were also hosted to a dinner atthe Executive Lounge in November


The Auditor General’s (AGs) Final Report was not available at the time of publication of the Annual Report. TheAGs report will be uploaded in the IPS website (www.ips.lk) when it is available.

FINANCIALSTATEMENT31st December 2014

ANNUAL REPORT 201464

I 'STITUTE OF POLICY STUDIES OF SRI LA]'I,'KASTATEME TOFFI A CIALPERFORMA CE

For the year ended 31st December 2014 2014 2013

Note Rs. Rs.RevenueGrant from the Government of Sri Lanka 2 16,000,000 15,000,000Contribution from the Endowment Trust Fund 23 6,000,000 1,500,000Project Income 3 62,221,525 41,399,592Income from International Development Research Centre (IDRC) ITI Grant 4 23,238,010 27,582,588Income from Seminar/Workshops 5 1,108,243 43,853,345Interest Income 17,101,674 22,863,708Income arising from Capital Grant Amortization 20 6,242,013 6,242,013Income from Hiring the Auditorium 1,152,797 705,215Miscellaneous Income 6 701,783 1,093,897Total Revenue 133,766,045 160,240,358

Expenses

Employee Cost 7 57,704,329 55,199,026Depreciation on Property, Plant and Equipment 14 28,793,814 26,934,280Research Cost 8 12,650,336 12,157,471Seminar and Workshop Cost 678,903 36,269,925Utility Expenditure 19,548,404 16,661,635Travel Expenses 2,197,176 1,797,699Other Operating Expenses 9 10,179,517 8,726,596Hire of Auditorium 778,534 136,575Loss on Disposal of Fixed Asset 0 15,995Exchange Loss 490,067 692,248Total Expenses 133,021,080 158,591,450

Surplus/(Deficit) Before Taxation 744,965 1,648,908

Income Tax Expense 10 0 0

Surplus/(Deficit) for the Period 744,965 1,648,908

INSTITUTE OF POLICY STUDIES OF SRI LANKASTATEMENT OF FINANCIAL POSITION

As at 31st December 2014 2013

Note Rs. Rs.

ASSETS

Current Assets

Cash and Cash Equivalent 11 59,472,160 1,573,411

Investments 15 160,703,987 209,142,541

Trade receivables 16 9,504,263 20,637,902

Inventories - Publications 1,191,418 1,115,523

Deposits and Prepayments 12 3,949,414 2,347,883

Interest Receivable 3,981,440 302,741

VAT Receivable 4,560,012 4,096,790

Other Receivables 13 2,532,254 2,221,013

Total Current Assets 245,894,948 241,437,804

Non Current Assets

Property, Plant and Equipment 14 326,167,218 348,312,983

Total Non Current Assets 326,167,218 348,312,983

Total Assets 572,062,166 589,750,787

LIABILITIES

Current Liabilities

Trade and Other Payables 17 8,046,634 7,834,415

Advance Receipts on Projects 18 27,170,230 40,713,975

Total Current Liabilities 35,216,864 48,548,390

Non Current Liabilities

Employee Benefits 19 10,999,341 9,980,365Staff Welfare Fund 1,544,283 1,423,306Deferred Income- Capital Grants 20 287,132,587 293,374,600

Total Non Current Liabilities 299,676,211 304,778,271

Total Liabilities 334,893,075 353,326,661

Net Assets 237,169,091 236,424,126

NET ASSETSIEQUITYContributed by;

Initial Transfer of Assets from Government/Grantor 2,144,144 2,144,144

Accumulated Surplus 235,024,947 234,279,982237,169,091 236,424,126

The annexed notes to the financial statements are an integral part of these financial statements.

These financial statements have been prepared in accordance with theSri Lanka Public Sector Accounting Standards.

A

::s.~(UL!L~•.....•... ~~..~ ...~~ .....~ ~

Chief Financial Officer ~

The Board of Governors of the Institute is responsible for the preparation and presentation of these financial statements.

06th February 20 IS2

INSTITUTE OF POLICY STUDIES OF SRI LANKASTATEMENT OF CHANGES IN NET ASSETSIEQUITY

For the year ended 315/ December 2014

Initial Transfer ofAssets by

Government/Grantor

Balance as at 31·tDecember 2012 2,144,144

Surplus of income during the year

AccumulatedSurplus/ (Deficits)

Rs.

232,631,074

o 1,648,908

Total

Rs. Rs.

234,775,218

1,648,908

Balance as at 31't December 2013 2,144,144 236,424,126

Surplus of income during the year

Balance as at 31't December 2014 2,144,144

234,279,982

o 744,965

235,024,947

744,965

237,169,091

3

INSTITUTE OF POLICY STUDIES OF SRI LA KASTATEME TOFCASH FLOW

For the year ended 31" December 2013Rs.

Cash Flow From Operating ActivitiesSurplus/(Deficit) Before Taxation

Adjustments for;

Contribution from Staff Welfare Fund

Depreciation on Property, Plant and Equipment

Income arising from Capital Grant Amortization

Provision for Gratuity

Interest Income

(lncrease)/Decrease in Provision for Bad debt

Loss on Disposal of Fixed Asset

Provision for Impairment of Property, Plant & Equipment

Net cash inflow/(outflow) Before Working Capital Changes

(Increase)/ Decrease in Trade Receivables

(Increase) /Decrease in Inventories

(Increase)/Decrease in Deposits and Prepayments

(Increase)/ Decrease in Vat and Other Receivables

Increase'(Decrease) in Advance Receipts

Increase/(Decrease) in Trade and Other Payables

Net cash inflow/(outflow) Generated From Operations

Gratuity Paid

Net Cash inflow/(outflow) From Operating Activities

Cash Flow From Investing Activities

Purchase of Property, Plant and Equipment

Accounting Adjustment

(Increase)/Decrease in Capital Work in Progress

Interest Received

Sales Proceeds from Disposal of Property, Plant and Equipment

Purchase of Investments

Proceeds from Sale of Investments

Net cash inflow/(outflow) From Investing Activities

Cash Flow From Financing Activities

Grants Received

et cash inflow/(outflow) from Financing Activities

Net (Decrease)fIncrease in Cash and Cash Equivalents

Cash and Cash Equivalents at the beginning of the year (Note 11)

Cash and Cash Equivalents at the end of the year

a) Reconciliation of Cash and Cash EquivalentsCash at BankCash in Hand

744,965

120,977

28,793,814

(6,242,013)

1,650,596

(17,101,674)

(1,595,699)

211,344

6,582,310

12,729,338

(75,895)

(1,601,531)

(774,463)

(41,474,422)

212,218

(24,402,445)

(631,620)

(25,034,065)

(6,859,394)

16,380,683

(83,103,297)

70,947,485

(2,634,523)

27,930,677

27,930,677

262,089

1,573,411

1,835,500

1,795,50040,000

1,835,500

2014Rs.

1,648,908

135,635

26,934,280

(6,242,013)

3,330,319

(22,863,708)

(885,072)

15,995

o

o

2,074,344

(12,350,719)

254,421

16,318,511

(2,051,114)

(18,533,43 I)

(1,492,134)

(15,780,122)

(2,834,210)

(18,614,332)

(34,107,102)

349,350

0

26,843,398

0

( 16,364,528)

13,391,840

(9,887,042)

26,025,827

26,025,827

(2,475,547)

4,048,958

1,573,411

1,533,41140,000

1,573,411

4

The Institute of Policy Studies of Sri LankaNOTES TO THE FINANCIAL STATEMENTS For the year ended 31December 2014

1. Domicile and legal formInstitute of Policy Studies was established by the Parliament Act No.53 of December 1988, and was formally set upas a legal entity by gazette notification in April 1990. The Institute of Policy Studies of Sri Lanka (IPS) registeredoffice and the principal place of service is situated at 100/20, Independence Avenue, Colombo 07- Sri Lanka.

1.1 Principal activities and nature of operationsThe principal activity of Institute of Policy Studies is to promote policy-oriented economic research and medium termpolicy analysis in Sri Lanka.

1.2 Basis of preparation1.2.1 Statement of compliance

The fmancial statements of the Institute of Policy Studies comprise of, the statement of financialperformance, statement of financial position, statement of changes in equity, statement of cash flow andnotes to the financial statements. These statements are prepared in accordance with the Sri Lanka PublicSector Accounting Standards (SLPSAS) for public sector entities published jointly by the Institute ofChartered Accountants of Sri Lanka (ICASL) and the Ministry of Finance and Planning.

1.2.2 Basis of measurementThe financial statements have been prepared on the historical cost basis.

1.2.3 Going concernThe Board of Governors are satisfied that the Institute has adequate resources to continue its operations inthe foreseeable future. Accordingly the Financial Statements are prepared based on the going concern basis.

1.3 Summary of significant accounting policiesThe policies have been consistently applied to all the years presented.

(a) Foreign currency transactionsThese financial statements are presented in Sri Lankan Rupees, which is the Institute's functional currency.Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions: gainsand losses resulting settlement" of such transactions and from the translation of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the statement of financial performance. Such balances aretranslated at the financial year end exchange rates.

(b) Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Subsequent ExpenditureExpenditure incurred to replace a component of an item of property, plant and equipment that is accounted forseparately, including major inspection and overhaul expenditure, is capitalized. Other subsequent expenditure iscapitalized only when it increases the future economic benefits embodied in the item of property, plant andequipment. All other expenditure is recognized in the statement of financial performance as an expense as incurred.

Depreciation is calculated on the straight line method using the following rates per annum; based on the estimateduseful economic life of the assetComputer EquipmentWeb Page DesignMotor CycleFurnitureOffice EquipmentMotor VehiclesLibrary BooksBuildings

33 %33 %20%20%20%20%25%

2%

5

The Institute of Policy Studies of Sri LankaNOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2014

Depreciation of an asset begins when the asset is available for use, whereas depreciation of the asset ceases at theearlier of the date that the asset is classified as held for sale and the date that the asset is derecognized.

ImpairmentCarrying value of property, plant and equipment are reviewed for impairment whenever events or changes incircumstances indicate the carrying amount may not be recoverable. An asset's carrying value is written downimmediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverableamount.

(c) LeasesLeases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified asoperating leases. Payments under operating leases are charged to the statement of financial performance on astraight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to thelessor by way of penalty is recognised as an expense in the period in which the termination takes place.

(d) InvestmentsThese investments comprise of Fixed Deposits, Treasury Bills, Bonds and Repurchase Agreements.

i. Fixed DepositsThe Investments in Fixed Deposits are accounted at cost. Interest accrued as at the statement of fmancialposition date is shown as interest receivable.

ii. Treasury Bills/Treasury BondslRepurchase AgreementsThe Investments in Treasury bills and bonds are stated at cost plus interest as at the statement of financialposition date.

(e) Capital grantsGrants relating to the purchase of property, plant and equipment are included under non-current liabilities asdeferred income and credited to the statement of financial performance on a basis consistent with the basis ofdepreciation of the related assets.

(I) InventoriesInventory consists of stock of Publications. Publications are stated at cost. Any publications held for more than 10years are being treated as slow moving and has been written off.

(g) ReceivablesReceivables are carried at anticipated realizable value. Debtors are reviewed on an ongoing basis. Debts which areknown to be uncollectable are written off during the year in which they are identified.Debtors are provided as follows:

Age(months)3-66-12Above 12

Provision10%50%100%

(h) Cash and cash equivalentsFor the purposes of the cash flow statement, cash and cash equivalents comprise of cash at bank, cash in hand andcall deposits held with banks, net of bank overdrafts. In the Balance Sheet, bank overdrafts are included undercurrent liabilities.

6

The Institute of Policy Studies of Sri LankaNOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2014

(i) Liability and provisionsLiabilities classified as current liabilities on the statement of financial position are those which fall due for paymenton demand or within one year from the statement of the fmancial position date. Non-current liabilities are thosebalances that fall due for payment after one year from the balance sheet date. All known liabilities have beenaccounted for in preparing these fmancial statements.

Provision for liabilities is recognized when the group has a legal or constructive obligation as a result of past eventsand it is probable that an outflow of economic benefits will be required to settle the obligation.

(j) Employee benefitsi. Defined contribution plans

All the employees of the Institute are members of the Employees Provident Fund and Employees Trust Fund towhich the Institute contributes 12% and 3% respectively of such employees' basic wage or salary.

ii. Defined benefit planThe Institute measures the present value of the retirement benefits of gratuity, which is a defined benefit planwith the advice of an actuary using projected unit credit method (PUC). Actuarial gains and losses arerecognized as income or expenses over the expected average remaining working lives of the participants of theplan.

(k) Revenue recognitioni. Contribution from the Government of Sri Lanka

The contribution from the Government of Sri Lanka is recognized on an accrual basis.

ii. Project incomeRevenue is recognized based on the stage of completion of the projects undertaken. Advance receipts arisingfrom the project are classified as deferred income and presented as current liabilities in the statement offinancial position. .

iii. Income from seminars/workshopsThe Income from Seminars and Workshops is recognized once the seminars and workshops have beenconducted on an accrual basis.

iv. Interest incomeInterest Income is accounted for on an accrual basis.

(I) Recognition of capital expenditureExpenditure incurred for the purpose of acquiring, extending or improving assets of permanent nature by means ofwhich to carry on the business or for increasing the earning capacity of the business has been treated as capitalexpenditure.

Classification of expenditureFor the purpose of presentation of statement of fmancial performance, the governors are of the opinion that thenature of expense method presents fairly, the elements of the Institute's performance and hence such presentationmethod adopted.

7

INSTITUTE OF POLICY STUDIES OF SRI LANKANOTES TO THE FINANCIAL STATEMENTS

As at 31st December

2 Grant from the Government of Sri Lanka

Represents the grant received from the Government of Sri Lanka for utilities and maintenance of the Institute.

2014Rs.

2013Rs.

3 Project IncomeIncome from projects-Institutions 62,221,525 41,399,592

62,221,525 41,399,592

4 Income from International Development Research Centre (IDRC) ITI GrantIncome from International Development Research Centre (IDRC) ITI Grant 23,238,010

23,238,01027,582,58827,582,588

This relates to the portion of income recognised from the lDRC Think Tank Initiative (TTI) Phase 1 and Phase 2 grants duringJanuary to September and October to December, 2014 respectively. The Institute qualified for the second phase of the grantamounting to Canadian Dollars 950,000 effective from 1 October 2014 for a period of 4.5 years. This grant will be used to enhanceresearch quality,organisational performance and improve policy linkages and communication and outreach.

5 Income from Seminars and Workshops

This consists of income generated from seminars and workshops conducted on the request of donors and, as a form of disseminationof the research work carried out. In 2013, the 6th South Asia Economic Summit was hosted by the IPS which resulted in an increasein Income by Rs. 26,840,558 in that year.

6 Miscellaneous IncomeSale of Publications 605,409 606,166Other Income 96,374 487,731

701.783 1.093.8977 Employee Cost

IPS Staff Salary 44,441.470 40,253,919EPF 4,818,979 4,409,986ETF 1,206,756 1,138,574Honorarium (Note 7.1) 3,866,584 3,819,984Staff Welfare Cost 1,588,262 2,018,917Other Benefits 131,682 227,327Provision for gratuity (Note 19) 1,650,596 3,330.319

57.704.329 55.199026

7.1 HonorariumIncludes payments made to Board of Governors 600,000.00 600,000

8 Research CostPrinting & Tvpeserting Publication Cost 2,176,920 3,686,499Internet Charges 2,258,761 2,347,203Consultation Charges 3,493,923 978,926Other Research Costs 4,720,732 5,144,843

12 650 336 12 157.471

9 Other Oueratlna Expenses

Registration and Membership Fees 291,910 152,312Office Costs 3,002,580 1,972,083Consumables 324,694 683,003Professional and Legal Fees 2,426,544 2,724,052Audit Fees 280,400 273,000Advertisements 36,480 113,300Bank Charges/Commission 164,536 183,331Other Admin Related Costs 1,511,721 515,338Lease Rental 1,170,000 1,170,000

Miscellaneous Expenses 48,681 55,105Bad Debts 710,627 885,072

Impairment of Assets 211,34410]79517 8.726.596

8

INSTITUTE OF POLICY STUDIES OF SRI LANKA

NOTES TO THE FINANCIAL STATEMENTS

As at 31st December 2014Rs.

2013Rs.

10 Income Tax Expense

Current tax Expense

The profits and the income of the Institute of Policy Studies are exempt from tax as per section 19(4) of the IPS Sri LankaAct No. 53 of 1988.

11 Cash and Cash EquivalentsCash at Bank 1,795,500Cash in Call Account 0Cash at Bank-Foreign Currency (Note 11.1) 0Petty Cash 40,000Investments held for less than 01 monthRepurchase Agreements 45,916,911Repurchase Agreement - Gratuity Fund 11,719,749

59,472,160Refer Note 15.1 for Market Value ofInvestments

11.1 Cash at Bank-Foreign Currency

Account in EURO 00

12 Deposits and Prepayments

Prepayments (Note 12.1) 3,257,178Deposits 309,750Other Advances 382,487

3,949,414

12.1 PrepaymentsMedical Insurance 0Other Insurance 652,607Other Pre-Payments 2,604,571

3,257,178

13 Other Receivables

Other Receivables (Note 13.1) 841,828

Provision for Bad Debt (313,900)

527,928

Staff Debtors 2,004,326

2,532,254

13.1 Other ReceivablesAir ticket reimbursements for staff travel from Donors 742,700Others 99,128

841,828

9,0331,500,000

24,37840,000

1,573,411

24,37824,3J8

1,876,883

306,000

165,0002,347,883

229,371

646,411

1,001,1011,876,883

562,045

(313,900)

248,145

1,972,868

2,221,013

418,400143,645

562,045

9


As at As at 31sf December

14 Property, Plant and Equipment

Building Computer Motor FurnitureEquipment Vehicles & Fittings

Rs. Rs. Rs. Rs.

320,204,415 70,336,980 10,604,125 19,100,248

2,856,649 2,749,535 0 36,331

0 0 0 0

323,061064 73,086515 10604125 19,136579

18,845,980 40,282,865 10,604,125 12,023,624

6,613,641 14,001,392 3,714,322

0 0 0 0

25,459,621 54,284,257 10,604,125 15,737,946

CostBalance as at 01st January 2014

Additions

Less: Disposals

Balance as at 31st December 2014 450,709,983

Accumulated Depreciation

Balance as at Olst January 2014

Depreciation Charge

Less: Disposals

Balance as at 31st December 2014

Carrying Value

Less: Impairment provision for Property, Plant & Equipment

As at 31st December 2014

OfficeEquipment

Rs.

22,361,705

670,700

o23032405

12,553,406

4,429,013

o16,982,419

LibraryBooks

Rs.

1,243,116

546,179

o1,789,295

1,227,606

35,446

o1,263,052

Total

Rs.

443,850,589

6,859,394

o

95,537,606

28,793,814

o124,331,421

(211,344)(211,344)

18,802,258 ° 3,398,633 326,167,218

1. Building additions include Rs.2,414,434.00 of retention money paid to the building contractor K.D Ebert and Sons during the year. As a result prior yeardepreciation charge ofRs.159,755.00 was charged to the current year.

2. An Impairment provision has been created for a component in the auditorium projector which is not functioning. The cost of the repair is estimated to beRs.211,344.

297,601,443

Note:

5,838,642 526,243

10


As at 3Jst December 2014 2013

Rs. Rs.15 Investments

Repurchase Agreements 119,364,591

Treasury Bills 8,833,305

Treasury Bills - Gratuity Fund 10,918,950

Treasury Bills - Staff Welfare Fund 1,435,859

Fixed Deposit - Staff Welfare Fund 1,508,246 0

Fixed Deposits 159,195,741 68,589,836160,703,987 209,142,541

15.1 Market Value of Investments

Treasury Bills & REPO's 60,000,000 145,174,24960,000,000 126,588,081

16 Trade Receivables

Trade Receivables Projects 7,044,553 7,913,037

Amount Receivable from the Ministry of Finance & Planning 3,741,509 13,296,037

Provision for Bad Debts (1,281,799) (571,172)9,504,263 20,637,902

11


As at 31st December 2014 2013

17 Trade and Other PayablesCreditors 806,872 2,225,650Accruals (Note 17.1) 5,515,026 4,750,614

EPF & ETF Payable 800,968 723,985

NBTPayable 4,938 22,511PAYE payable / Stamp Duty Payable 192,586 111,655Witholding Tax Payable 726,244 0

8,046,634 7,834,41517.1 Accruals

Research Project Expenses 1,445,000 1,367,573

TelephonelInternet Charges 209,232 273,200

Audit Fees 718,300 678,000

Electricity 606,092 667,213

Other Office Costs 2,384,794 1,650,203

Fuel 151,608 114,425

5,515,026 4,750,614

18 Advance Receipt on Projects

Balance as at 01 January 40,713,975 33,221,579

Receipts during the year 56,471,032 148,579,787

Amount Receivable from the Ministry of Finance & Planning 3,741,509 13,296,037

Income recognized (70,014,776) (141,087,391 )

Advance returned to the Ministry of Finance & Planning (3,741,509) (13,296,037)

Balance as at 31 December 27,170,230 40,713,975

The advance receipts on projects relate to income on incomplete projects deferred in the Balance Sheet to be recognized asincome over the period of projects. Amount carried forward together with expected future receipts on projects are estimatedto be sufficient to meet the future expenses of these projects. Rs.3,741,509/- refers to the amount returned to the Ministry ofFinance & Planning for a UNICEF funded project which is expected to be received in 2015.

12

INSTITUTE OF POLICY STUDIES OF SRI LAI\'KAOTES TO THE FINANCIAL STATEMENTS

As at 31st December 2014Rs.

19 Employee Benefits

Balance as at 01 January

Expense recognized during the year

Payments made during the year

Balance as at 31 December 10,999,341 9,980,365

(Note 19.1)

9,980,365

1,650,596

(631,620)

2013Rs.

9,484,256

3,330,319

(2,834,210)

Number of employees of the Organization as at 31 December 2014 is 57.Number of employees of the Organization eligible for Employee Benefits as at 31 December 2014 is 47 (2013 -48).The liability is funded and has been valued by a professional actuarial company.The following assumptions are used in determining the cost to the institute of providing these benefits:

Discount Rate 8%Increase in rate of salary 5%Rate of Staff Turnover 7%

19.1 Expense recognized during the yearCurrent Service CostInterest CostActuarial (Gain)/Loss

2014Rs

972,386998,036

(319,826)

2013Rs

914,3521,043,2681,372,699

1,650,596 3,330,319

2014Rs.

20 Deferred Income-Capital GrantsBalance as at 0 I JanuaryGrants obtained during the year representsGrant from the State of the NetherlandsGrant from the Endowment FundAmortized during the yearBalance as at 31 December 287,132,587 293,374,600

293,374,600ooo

(6,242,013)

2013Rs.

299,616,613ooo

(6,242,013)

13


21 Lease Commitment

The Institute has a commitment to make annual repayment of Rs.780,000 p.a for the period 2005 to 2009and Rs. 1,170,000 p. a for the period 2010 onwards as a rental for the construction of building on landowned by the Land Commissioner on an operating lease arrangement for a period of 30 years.All paymentsdue upto 2013 have been made. A provision has been created for rental due in 2014. However steps arebeing taken to obtain the land on an outright grant from the Government of Sri Lanka.

The total of future minimum lease payments under operating leases for each of the following periods are asfollows;Less than one yearBetween 1-5 yearsMore than 5 years

Rs.l,170,000Rs. 5,850,000Rs. 16,380,000

22 Capital Commitment

No capital commitments as at the Balance Sheet date.

23 Related Party Transactions

The Institute's Endowment Trust Fund had a net assets value ofRs. 506,131,480 as at 31 December 2013.Sperate accounts are maintained for the Endowment Trust Fund which is audited separatey. It consists offive Trustees of which two are Ex-Officio members (Chairman and Executive Director of IPS). During theyear the Institute received Rs. 6,000,000.00 as a contribution for the operations of the Institute from theEndowment Trust Fund.

The Institute is granted Rs. 15,000,000 from the Government of Sri Lanka for recurrent expenditure.The Secretary to the Treasury, Governor of the Central Bank and the Director General of the NationalPlanning Department are Ex-Officio members of the Board of the IPS.

24 Contingent LiabilitiesThere were no contingent liabilities as at the balance sheet date.

25 Events occurring after the Balance Sheet DateNo events occurred after the balance sheet date which require adjustments to or disclosures in the fmancialstatements.

26 Comparative FiguresComparative figures have been restated where necessary for the purpose of presentation.

27 Board of Governors' Responsibility

The Board of Governors is responsible for the preparation and presentation of these fmancial statements inaccordance with SLPSAS.

. 14

The 2014 Annual Report was prepared under the supervision of the Executive Director ofIPS by the Annual Report Committee Chaired by Dr. Ganga Tilakaratne. The Committeeconsisted of the following members: Dr. Janaka Wijayasiri, Suwendrani Jayaratne,Sunimalee Madurawala and Dishnika Perera. Compiling, formatting and design wasdone by Charmaine Wijesinghe.

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