Sunday Times 2
Destination Sri Lanka: Focus on Vision 2030
View(s):By Nazimudeen Saleem
The newly elected government of Sri Lanka has been in office almost a year but it seems too early to gauge their performance yet. However, it seems things move in the right direction. The current economic growth trend beats expectations, and much of the essential works undertaken by the previous administration of Mr. Wickremesinghe, who rescued the economy from bankruptcy, continue under the new government. What seems missing is a comprehensive national development plan—like a “Vision 2030” or “Sri Lanka 2030.” As of now, there is no publicly released long-term strategic plan or vision statement from the new administration that leaves a gap in strategic continuity, especially given the expiration of the 2017 strategic framework, Vision 2025, this year.
However, there are signs of forward-looking initiatives such as Digital Sri Lanka 2030, a national digital strategy that aims to transform Sri Lanka into a digital innovation hub by 2030. It includes reforms in infrastructure, cybersecurity, digital finance, and e-governance. Recently, emphasis has also been placed on exploiting the tourism potential of the island nation. Tourism is not only a major foreign exchange earner but also an employment generator.
Vision 2025 was launched in 2017 by a previous administration. It was designed as a medium-term strategic framework to guide Sri Lanka’s development until the year 2025, with goals like transforming the country into a knowledge-based economy and positioning it as a hub in the Indian Ocean. This plan reflects a comprehensive effort to position Sri Lanka as an upper-middle-income country by 2025 with a strong emphasis on inclusive growth, sustainability, and institutional reform. Although failed to realise the expectations, partly due to economic mismanagement leading to bankruptcy and partly due to political and bureaucratic corruption, a new long-term plan based on the current reality would definitely pave the way for achieving those goals.
The aim of this brief article is to critically examine a few key areas and economic sectors that require the attention of the current administration in their effort to boost economic and social development and attain national economic stability in the long run. The suggestions and recommendations made in this article are intended for the consumption of economic policymakers and ministerial advisers, but the general readership may find it beneficial. It is not a strategic plan per se, but can be incorporated into a formal long-term strategic framework. The fields treated are tourism, tea economy, infrastructure, Colombo rejuvenation, enterprise development, health care and education, housing, state-owned enterprises, and Colombo Port City.
Tourism Strategy
At present, economic and social development programs, emerging from various ministerial initiatives and endorsed by diverse committees, appear to be disjointed and fragmented. Ministerial committees do not always seem to work in tandem or collectively, and may not align with the national policy agenda (it has to come from a long-term strategic plan). One good example is national tourism agenda. It is doubtful whether the country has a national tourism policy or strategy in place. For example, policy planners should pay attention to such questions as ‘what kind of tourism destination Sri Lanka aspires to be’ or what type of visitors we should be targeting.’ Instead, increasingly attention is being given to boosting the tourist numbers to 3 or 4 million a year no matter who these visitors would be–pedophiles, drug peddlers, smugglers, and organised criminals. The country cannot entertain every Tom and Dick as tourists. Nor can the country operate like a street food stall offering everything from pizzas, fish and chips, and burgers to everyone on the street. Seasonal mass tourism is different to high-end heritage and nature tourism. Does Sri Lanka wish to portray as a cheap overcrowded mass tourism destination like Thailand or, perhaps, a gambling den like Macao? Sri Lanka undoubtedly fits the image of an enchanted and exotic destination such as Malaysia. The country may have the potential to further boost its tourism carrying capacity, but at present, it simply cannot encourage unplanned growth with crammed and overcrowded transport infrastructure and inadequate service provision. The country could face the challenge of providing adequate accommodation facilities and improving infrastructure development. At the given rate, cheap tourists would even be allowed to put up their makeshift camps on the roadside, ignoring the issues of health and safety, security, and illegal business activities.
The current strategy could even cause backlash when locals find it difficult to cope with strained public services. While many mature destinations worldwide (Spain, Italy, France, and even Japan) face the challenge of internal resistance from locals due to overtourism, some like Thailand are still aggressively promoting tourism with visa-free entry. Sri Lanka is also easing the visitor entry just to attain the target arrivals that could reach 3 million this year. Obviously, some mature destinations in Europe and countries like Turkey attract over 40 million visitors a year, but they have unmatched carrying capacity in terms of accommodation facilities and tourism services provision. Moreover, a sound tourism strategy cannot be implemented without the support and coordination of several institutions and government agencies. For example, a minister responsible for tourism or NTO cannot decide to relax visa criteria in isolation without consulting the immigration authority. Similarly, a major tourism development project cannot be planned and implemented without considering sociocultural and environmental impacts, as this requires the participation of several other agencies. The recently established tourism taskforce is a welcome initiative, but it should not be limited to boosting or promoting tourism at the mercy of adverse consequences.
Moreover, the National Tourist Organisations (NTO) should not engage in the nitty-gritty of developing or managing local tourist attractions. The NTO’s job is to engage in marketing and promote the country to specific target markets worldwide, and help plan and implement key nationally significant tourism development initiatives. Ideally, stakeholder-driven local tourism entities with a legal force to develop and manage tourism locally or regionally should be created under NTO oversight. Local area tourism initiatives (LATI) have proven to be very successful worldwide, and they have been very popular in the UK since the 1980s. Local tourism authorities are modelled as public-private partnerships consisting of NTO, local authorities such as the Pradeshya Sabha, urban or rural development authority, private businesses such as hospitality service providers, and other stakeholders like the conservation bodies. Local Tourism Authorities (LTA) are empowered to initiate and approve local tourism projects as well as to manage the local destination, including authorising local tourism businesses before applying for regulatory licences. The NTO may influence the operation of a LATI as well as help with planning and development, but its intervention is limited to the issues of aligning with and achieving national tourism goals and objectives.
Tea Economy
Tea is another major export earner. The country is still obsessed with the century-old image of Ceylon Tea when the world is waking up to coffee culture. Although tea cannot be easily removed from the export portfolio (one of the dominant foreign exchange earners), coffee has tremendous potential. Coffee was the dominant crop before tea was introduced by the British centuries ago. Coffee can make a breakthrough as a profitable crop for the island nation if re-introduced in smallholder plantations or state-owned plantations first, along with other cash crops such as cocoa, avocado, and spices. Vietnam and Kenya are two countries which successfully balance the cultivation of these cash crops. The country needs to launch start-up initiatives for budding entrepreneurs, along with training and funding, to engage in the production of specialty agriproducts for global online customers. Speciality tea blended with spices and herbs, trendy coffee mixes, and nutty chocolate paste can be potential products for online marketing. However, to succeed, they would need to acquire product development, business, and digital marketing skills, along with a mindset for change.
Infrastructure Strategy
Infrastructure is another major issue, particularly in the railways. Why not dismantle the century-old railway network and initiate a project to link the major cities with Colombo using a high-speed electric railway network? A simple call to the Chinese can initiate such the project on a build, operate, and transfer (BOT) model. Introducing intercity fast trains from Colombo to Kandy, Jaffna, Badulla, and Matara under the BOT model with either Chinese or Japanese help is a strategy worth considering. Here, an innovative pricing model can be used with state subsidy for local residents who may not be able to afford. While land transport projects continue to be carried out, the government should now focus on railway. The national railway authority can still operate selective local networks, including electrified capital subway lines, from Panadura to Kelaniya. The narrow-gauge railway line can be extended to Rathnapura to operate as a luxury ‘Gem Trail’ for tourists. Steam train with a Victorian character would be a plus but a private entity should operate it for the national railways.
Colombo Plan
Colombo is a relatively small but magnificent capital city with the potential to become a destination in its own merits. The centre of Colombo needs a remake or rejuvenation with the restoration of the Fort Railway Station without losing its Victorian character, ideally with an extended and underground shopping complex, while reclaiming the railway graveyard (land worth millions of dollars for commercial development) between the Fort and Maradane railway stations. Commuter railway should pass through the stations while the mainline stations for fast trains are moved to the peripheric towns like Dehiwala. The government should also try to bring back the Japanese funded Colombo Light Rail project which the Rajapaksa government derailed it. To complement the public transit system of the city, the government should consider bringing the Colombo omnibus transport system under an independent authority with a fleet of electric buses. Creation of an entity such as Colombo Transport Authority (CTA) should be made independent without government interference.
Enterprise Development
Sri Lanka needs a strategy to reduce skilled outmigration in the long run while redirecting the outflow of capable men and women to engage in entrepreneurship. This means setting up an Enterprise Development Institute (EDI) to train and support budding entrepreneurs, particularly in the new technology sector. The EDI is a unique entity funded by the government and managed by industry-led professionals to train budding entrepreneurs and not for merely award-thirsty qualification seekers. The proposed innovation hub should be a part of the EDI with feeder program to the Colombo Port City project. The EDI can play a pivotal role in the country’s technology-led business start-up initiative.
Health Care and Education Provision
The current government is keen to improve the healthcare and education sectors, and several initiatives and projects are already underway in this regard. Unfortunately, mass emigration of healthcare professionals is deplorable. To be effective and fair health care provision, an independent regulator of the healthcare sector is required. Regulators should also be empowered to regulate the prices of private healthcare products and services. There is no harm to encouraging private participation in the provision of higher education, particularly in vocation-led trade and technology courses, as long as they are robustly regulated, but state institutions should not be abandoned. Malaysia is a good example, in which private institutions and universities operate successfully along with state institutions. The secondary school curriculum may require rethinking and a thorough review is needed to incorporate subjects in AI, digital technology, and entrepreneurship. All international and local private schools along with state schools should be brought under the supervision of an independent regulator.
Housing Strategy
Housing is a major national policy issue. The government should encourage housing construction with tax incentives and mortgage-lending facilities from state-owned banks. It is even better to establish new ‘home loan’ institutions. If the government wants to trigger consumption-led internal economic growth, housing construction remains the key. It plays a dominant role, as it brings in secondary and tertiary layers of economic activities, and the multiplier effect could be tremendous. The mortgage lending contract should include a built-in insurance policy to enable borrowers to pay less for some months when faced with sudden financial hardships.
State Owned Enterprises
The role of state-owned enterprises (SOE) in a country’s overall economic development is also vital. However, the sheer number of SOEs listed in a market economy like Sri Lanka and the lack of transparency and accountability make us wonder how the current government would bring about reform and restructuring under the IMF’s Extended Fund Facility program, in which several key SOEs were earmarked for privatisation or restructuring in 2024 to reduce fiscal risks and improve efficiency. The previous administration led by Ranil Wickremesinghe initiated bids for eight key SOEs, including Sri Lankan Airlines Ltd, Sri Lanka Telecom PLC, and two Sri Lanka Insurance Corporations. The current administration, however, has taken a more cautious approach and has halted the privatisation of Sri Lankan Airlines but emphasised on improving governance and reducing corruption rather than immediate divestment. Privatisation remains a secondary option to be pursued only if other restructuring efforts fail.
The SOE Directory lists 527 state-owned enterprises, of which 55 are considered strategically important. However, over 300 of these entities are state institutions, authorities, and agencies, including educational and research institutes, and hospitals. These cannot be considered commercially driven SOEs but at the mercy of the Treasury for funding. SOEs span sectors such as energy, transport, banking, insurance, agriculture, and telecommunication. SOEs cover almost every industrial and commercial sector. The Chinese state can be considered more pro-market than Sri Lanka, considering how SOEs operate with partial listing in the national stock exchanges. When it comes to restructuring, the new president and his economic planning ministry have a Herculean task to do, given the nature of the public sector employment structure and nepotism-led politics within these organisations. Most of these SOEs need to be restructured as state institutions or agencies rather than state owned enterprises and most of the unproductive SOEs need to be dissolved. Recent cabinet approval to dissolve 33 unproductive SOEs is a welcome move.
Whatever the model or framework the government takes up to reform and restructure the SOEs, they (only the revenue-driven SOEs) should be made independent from the Treasury and operate under state oversight making the chairpersons and the Board responsible and accountable. All key strategically important and revenue-producing SOEs should be partially listed on the Colombo Stock Exchange, making them accountable not only for the state but also for stakeholders, such as lenders and shareholders. Instead of Treasury having major stakes, state-owned banks should invest in and hold a major part of the stakes. State-owned banks and lenders are responsible for the Treasury and the State. This also reduces bureaucracy and political interference in the operations of SOEs.
Colombo Port City Project
The last and the final policy area to consider here is the Colombo Port City project (CPC). Integrating the CPC into a national economic development framework is essential for coherence, equity, and long-term sustainability. It is essential to ensure that Colombo Port City operates not as an isolated offshore enclave, but as a strategic catalyst for national economic transformation, fintech leadership, and inclusive prosperity. In this regard, some key proposals that policy planners may want to consider establishing a Central Bank Digital Currency (CBDC) for Port City Transactions and introduce a CBDC-backed digital wallet/card system for all residents, visitors, and businesses operating within the Port City. It can accept deposits in major global currencies and Sri Lankan Rupees, with automatic conversion into a stable digital currency. The interoperability of the CBDC with national banking systems and global fintech platforms should be ensured under the supervision of a special arm of the Central Bank.
Moreover, the CPC should remain in the digital-only economic zone, ensuring 100% digital transactions within the Port City to promote transparency, traceability, and efficiency. In addition, the use of blockchain-based smart contracts for real estate, marine services, and fintech operations is mandatory.
While the CPC operates as an independent entity, inclusive linkage to the national economy is also essential. Some of the strategies to achieve this goal are creating feeder programs for local SMEs to supply goods and services to Port City residents and businesses, offering training and certification for Sri Lankan professionals to work in Port City fintech, hospitality, and real estate sectors, and launching programs to ensure social safeguards to prevent displacement and inequality in surrounding communities. A Sovereign Wealth Fund (SWF), such as the Sri Lanka Future Fund, seeded by Port City revenues (land leases, transaction fees, and investment licences) would be a plus. SWF returns can be allocated to national priorities, such as infrastructure, education, climate resilience, and entrepreneurship. The SWF needs to be governed by independent oversight, modelled on best practices from Norway, Singapore, and the UAE.
Conclusion
Sri Lanka stands at a pivotal moment in shaping its long-term development trajectory. While past initiatives, such as Vision 2025, fell short due to mismanagement and fragmented policymaking, the current administration has an opportunity to reset with a clear and coherent Vision 2030. Success depends on moving beyond ad hoc sectoral measures into an integrated framework that balances growth with sustainability, inclusivity, and resilience. Tourism, agriculture, infrastructure, enterprise development, education, healthcare, housing, state-owned enterprises, and Colombo Port City must all be aligned within a national vision that is transparent, accountable, and forward-looking. If Sri Lanka combines strategic planning with disciplined execution, it has the potential to transform itself into a dynamic hub of innovation and prosperity in the Indian Ocean region by 2030.
(The writer is a UK based academic (native of Sri Lanka) with expertise in economic development, tourism development, public policy planning, and marketing. He can be contacted via email: nazim@iconcollege.ac.uk or nazimsa@gmail.com)