2026 and Beyond: Sri Lanka’s Creative Path to Economic Resilience
View(s):As Sri Lanka enters 2026, the country is seeking a fresh start after several years of repeated shocks. The hope for stability and recovery comes after a prolonged period in which economic, social, and environmental crises unfolded one after another, placing exceptional strain on national resilience.
Over the past eight years, Sri Lanka has faced a sequence of major disruptions. The Easter Sunday terror attacks severely affected social stability and investor confidence, particularly in tourism and related services. This was followed by the COVID-19 pandemic, which disrupted livelihoods, slowed economic activity, and deepened financial stress across households and businesses. Just as recovery efforts began to take shape, the country was struck by Cyclone Ditwah, adding another layer of hardship.Striking in late November, Cyclone Ditwah has been one of the most destructive natural disasters in Sri Lanka’s recent history. Its impact was nationwide, affecting nearly two million people and around 500,000 families across all 25 districts. Livelihoods were interrupted, essential services damaged, and critical infrastructure placed under severe pressure at a time when recovery capacity was already limited.
According to the World Bank Group’s Global Rapid Post-Disaster Damage Estimation (GRADE) report, the cyclone caused an estimated US$4.1 billion in direct physical damage to buildings, agriculture, and critical infrastructure. This represents almost four percent of Sri Lanka’s GDP, underlining the magnitude of the loss and its significance for an economy already under strain.The social and labour market impacts have also been substantial. International Labour Organisation estimates show that up to 374,000 workers were employed in flood- and landslide-affected areas. Prolonged disruption could result in monthly income losses of approximately US$48 million. The agriculture and fisheries sectors, central to rural livelihoods and food security, have been particularly affected, further exposing existing vulnerabilities.As Sri Lanka moves through 2026, the focus must remain on restoring livelihoods, strengthening resilience, and ensuring that recovery efforts are better prepared for future shocks.
Sri Lanka urgently needs a more resilient economy. Yet, for decades, such resilience has remained elusive due to a traditional mindset, weak governance structures, and policy capture by vested interests. The country continues to rely heavily on a narrow export base—tea, rubber, coconut, and garments—while global competition demands innovation, diversification, and value creation. What Sri Lanka needs today is not incremental change, but a clear paradigm shift in its economic thinking.
One promising pathway is the creative economy, an area that has gained increasing global attention. As defined by John Howkins in The Creative Economy: How People Make Money from Ideas, the creative economy refers to economic activities based on the generation and exploitation of knowledge, creativity, and intellectual capital. Howkins identifies fifteen sectors within the creative economy, including advertising, architecture, art, crafts, design, fashion, film, music, performing arts, publishing, research and development, software, toys and games, television and radio, and video games. I have been advocating the importance of the creative economy since 2011. In that year, I participated in a session at the Central Bank of Sri Lanka – Centre for Banking Studies, where I discussed and helped set the ground conditions for positioning the creative economy as a key driver of Sri Lanka’s future development. The session is publicly available and can be accessed here: https://www.youtube.com/watch?v=Wkg91Pev4TM
More importantly as early as 1995, Landry and Bianchini argued that “the industries of the twenty-first century will increasingly depend on creativity and innovation.” In today’s global economy, human capital—knowledge, skills, and attitudes—has become the most critical resource. This shift is reflected in global trade patterns as well. According to the United Nations Conference on Trade and Development, the creative economy contributes nearly 3 percent of global GDP and is one of the fastest-growing sectors, driven by digitalisation and services. For Sri Lanka, a country rich in culture, heritage, and creative talent, this potential remains largely underutilised.
A powerful example worth studying is Nollywood, Nigeria’s film industry. Within just two decades, Nollywood has become the world’s second-largest film industry by volume, producing thousands of films annually and reaching global audiences through digital streaming platforms. While revenues remain constrained by piracy and low budgets, Nollywood demonstrates how local stories, low-cost innovation, and entrepreneurial creativity can build a globally visible industry.Sri Lanka can draw valuable lessons from this experience, particularly in relation to the Ranminithenna Film Village, which has significant but underexploited potential. University students and researchers could study Nollywood’s key success factors—its production models, distribution strategies, and institutional support—and adapt these lessons to the Sri Lankan context.
Policy support is critical. In October 2024, Nigeria approved the Creative Economy Development Fund (CEDF) and launched an Intellectual Property Monetisation Pilot, signalling strong state commitment to the creative sector. Sri Lanka already has an institutional foundation through the National Enterprise Development Authority (NEDA), which is well positioned to benchmark international best practices and design targeted financing and policy mechanisms to support local creatives. It is also worth noting that, in recent times, NEDA has initiated important thinking and dialogue around the creative economy, signalling growing institutional recognition of its potential as a driver of national development.
Conclusion
As Sri Lanka moves through 2026, the experience of repeated crises presents an important moment for long-term reflection. The challenge ahead is not only recovery, but direction. Clear policy priorities, effective implementation mechanisms, and measurable performance indicators are needed to support new growth areas such as the creative economy. Policymakers, academics, and industry leaders must recognise that creativity is not a luxury but an economic necessity in a competitive, knowledge-driven world. This is also a time to draw inspiration from Sri Lanka’s civilisational achievements at Sigiriya, Anuradhapura, and Polonnaruwa—products of vision, planning, and innovation. A genuine paradigm shift, supported by aligned education reforms and a long-term national vision, can strengthen resilience and place Sri Lanka on a more sustainable development path beyond 2026.
(The writer is Professor in Management Studies at Open University of Sri Lanka. You can reach Professor Abeysekera on nalinabeysekera @gmail.com)
HitAd.lk is the best and biggest mobile phone market in Sri Lanka, and we guarantee you will find what you need here from our extensive listing of mobile phones for sale in Sri Lanka. Whether it’s a budget-priced smartphone for communication, or higher end features with advanced connectivity, there are many different options from which to choose from on our site!