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Country Assistance Policy to Sri Lanka
Assistance for Tsunami Rehabilitation and Reconstruction
Evaluation of Japan's Assistance in Response to Tsunami Disaster

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Japan's ODA Consultation Desk on Fraud and Corruption

ANuradhapura Teacvhing Hospital Anuradhapura Teaching Hospital


Overview of Japan's Economic Cooperation to Sri Lanka

          Japan’s cordial relationship with Sri Lanka dates back to 1952, when Japan established diplomatic relations with Sri Lanka (then Ceylon). Since then, Japan has been a long- time partner in Sri Lanka’s socio-economic development as well as in the process of peace enhancement and reconciliation. Japan has also promptly provided relief and reconstruction assistance for conflict affected communities and those affected by natural disasters such as floods, droughts and tsunami.

         As of the end of December 2010, the Government of Japan has provided around 1,100 billion Japanese Yen (JY) (approximately Rs. 1,400 billion) as assistance to Sri Lanka under its various funding schemes that have benefitted people in all parts of the country including those in conflict affected areas. This assistance is provided through several funding schemes such as Grant Assistance, Technical Cooperation, and Yen Loan scheme and mainly executed by the Japan International Cooperation Agency (JICA) in close cooperation with the Government of Sri Lanka. In addition, Japan provides support through UN Agencies, World Bank, Asian Development Bank and local, Japanese, and international NGOs.     

         Japan’s assistance to Sri Lanka mainly focuses on two areas which are inter-related, and the assistance is expected to produce synergetic effects;

1. Consolidation of Peace and Reconstruction, and
2. Medium and Long-term Vision for Development

       In this context, Japan has engaged in the agendas of  i) post conflict reconstruction, ii) socio-economic infrastructure, iii) poverty alleviation, iv) human resources development and v) climate change adaptation and mitigation.


Recent Major Projects
  • The Construction of the Bandaranayake International Airport - Rs. 20.7 billion
  • Baseline Road - Rs. 12.5 billion
  • Expansion of the Colombo Port - Rs. 130.6 billion
  • Southern Transport Development Project - Rs. 60.7 billion
  • Provincial/Rural Roads Development Project - Rs.17.8 billion
  • New Mannar Bridge and improvement of the Causeway - Rs. 3.1 billion
  • Upper Kotmale Hydro Power Project - Rs. 63.3 billion
  • Vavuniya- Killinochchi Transmission Line - Rs. 4.5 billion
  • Solar Electric Power Generation - Rs. 1.4 billion
  • Kandy City Wastewater Management Project - Rs. 23.6 billion
  • Eastern Province Water Supply Development Project - Rs.8.2 billion
  • Pro-Poor Economic Advancement and Community Enhancement Project - Rs.6.4 billion
  • Improvements of Anuradhapura Teaching Hospital - Rs. 3 billion
  • Improvement of central functions of Jaffna Teaching Hospital - Rs. 3.8 billion
  • Digital Topographic Mapping of the Northern Province - Rs. 836 million
  • Development Planning for the Rapid Promotion of Reconstruction and Development in Jaffna District – Rs. 836 million.
  • Development Planning for the Urgent Rehabilitation of Resettlement Community in Mannar District – Rs. 836 million

Upper Kotmale Project           Mine Clearing operations
             Sifiriya Museum             GGP Bridge              Mannar Bridge          
 Upper Kotmale Hydro Power Project            Manual de-mining             Sigiriya Museum                      Bridge in Badulla constructed through GGP                  Mannar Bridge                                     


   The recent major assistance projects for socio-economic infrastructure include: i)  improvement of Anuradhapura Teaching hospital by providing new facilities with medical equipment; ii) construction of Vavuniya- Kilinochchi Transmission Line, iii) improvement of central functions of Jaffna Teaching Hospital; iv) construction of the new Mannar Bridge and improvement of the Causeway; v) improvement of Kandy City Wastewater Management; vi) Eastern Province Water Supply Development; vii) Provincial/Rural Roads Development; viii) construction of Upper Kotmale Hydro Power; ix) development of Solar Electric Power Generation in Hambantota, x) construction of Southern Highway from Kottawa to Kurundugahahetekma, and xi) construction of the first section of the Outer Circular Highway in the outskirts of Colombo. These projects are expected to contribute not only to the development and welfare of all people of Sri Lanka, but also serve as a symbol of friendship between the people of Japan and the people of Sri Lanka. Especially, the projects in the Northern and the Eastern Provinces are expected to promote sustaining peace and reconciliation among all communities.      

      Under Japan’s Technical Cooperation, a total of 11,057 Sri Lankan professionals and students have been trained in various fields in Japan and 1,724 Japanese Experts ad 788 Japan Overseas Cooperation Volunteers (JOCVs) have been dispatched to Sri Lanka up to the end of March 2009. At present, 56 Volunteers are actively working at the grassroots level and over 20 Japanese experts are working with counterparts in relevant Ministries and institutions. In order to strengthen the capacity of Northern and Eastern provincial authorities, Japan is currently involved in a project to build capacity of the local officials concerned. In addition, there are several scholarships offered by the Government of Japan to young Sri Lankan public officers in various fields of expertise. 15 officers selected for the Human Resource Development scholarship are presently pursuing their post-graduate studies in three universities in Japan

     The Government of Japan also provides assistance to Sri Lanka through international agencies such as the World Bank, Asian Development Bank and UN Agencies via Japan Special Fund, Japan Fund for Poverty Reduction, Japan Social Development Fund, and Human Security Trust Fund etc. The Eastern and North Central Provincial Road Project, Poverty Reduction through Rural Infrastructure Maintenance, US$ 11 million (approximately Rs. 1,250 million) through IOM, UNHCR, UNICEF, and ICRC for providing shelter, food, water and sanitation to Internally Displaced Persons (IDPs) living in camps. In addition, US$ 7 million (approximately Rs.800 million) was provided through seven Japanese NGOs operating in Sri Lanka under the Japan Platform Fund to meet emergency humanitarian needs in conflict affected areas.

Japan’s Role in the Private Sector of Sri Lanka      

   Sri Lanka and Japan have enjoyed healthy bilateral relations in the area of trade and investments. In this regard, the Japanese presence in the private sector of this country has been maintained despite various challenges. Currently about sixty Japanese companies are operating in the country. As good corporate citizens of Sri Lanka, they have made a substantial contribution to Sri Lanka’s economy through creating employment, generating exports and transfer of technology to this country. In this regard, the Japanese Commerce and Industry Association in Sri Lanka are playing a coordinator role among the Japanese enterprises in Sri Lanka. The Japan External Trade Organization (JETRO) is playing an important role in further promoting bilateral trade between our two countries by disseminating trade related information and responding to various queries made by the Sri Lanka business sector.

   Improving the business environment is very crucial at this stage, especially in the context of new investment opportunities that have emerged in the entire island including the Northern and the Eastern parts of the country. We hope that the Government of Sri Lanka will capture this opportunity by creating a stable macroeconomic environment and reducing the cost of doing business where businesses and industries could thrive. It is in this context that the Government-Private Joint Forum was launched last year, which forms a framework for improving the business environment for the Japanese companies operating in Sri Lanka. The regular discussions between the Sri Lankan Government, Japanese companies and the Embassy of Japan will not only benefit the Japanese companies, but will also contribute to improving the business environment in Sri Lanka.     

   One significant event on promoting the Sri Lanka and Japanese businesses is the Joint Meeting of the Sri Lanka-Japan and Japan-Sri Lanka Business Co-operation Committees which is due to hold its 16th gathering in Tokyo in 2011. This event will provide opportunity for business partners to share experiences, meet new business partners, obtain guidance and insight on investment opportunities and forge new heights in promoting and enhancing Japanese investment, bilateral trade, and tourism between the two countries.



Country Assistance Policy to Sri Lanka

June, 2013

1.The significance of the assistance to Sri Lanka

(1) Sri Lanka has historically been friendly to Japan. Japan and Sri Lanka have maintained cordial relations such as cooperation in international arenas since the establishment of diplomatic relations in 1952. Sri Lanka’s geographical importance is crucial for retaining Japan’s sea lane and also deepening economic ties with Middle-East and African countries along with South Asia.

(2) While Sri Lanka has seen steady growth in its various industries such as tourism, it has issues such as improving economic infrastructure including transport and energy,quality of social service in the rural area, and preparedness to natural disasters. In addition, there are areas that need to be developed with its devastated basic infrastructure mainly in Northern and Eastern parts of the country due to the internal conflict over 26 years.

(3) Japan’s assistance to Sri Lanka not only promotes Sri Lanka’s economic growth, but also contributes to the improvement of business environment for Foreign Direct Investment including those from Japan. Japan also promotes Sri Lanka’s efforts towards post conflict national reconciliation and economic and social development, and also greatly contributes to the establishment of democracy and stability in whole of South Asia, which would contribute to stabilize maritime transport in the region.

2. Basic policy(Long-term target): Promotion of economic growth in consideration of emerging regions

Based on Sri Lanka’s basic principle for development, Japan supports the development of basics for promoting further development and stabilization of Sri Lanka’s steadily growing economy. Also, based on the history of the conflict and the present status of development, Japan’sassistance will focus on equality and fairness with special consideration for Emerging Regions, while paying due attention to its vulnerability to disasters.

3. Priority areas (Mid-term target

(1)Promotion of economic growth

  • To further Sri Lanka’s economic growth, improvement of domestic distribution of goods from capital areas, upgrading transport infrastructures to promote international connectivity, and provision of a stable distribution of low-price electricity, are necessary. In order to achieve the above, Japan actively supports the improvement of infrastructure in sectors such as transport and energy, paying attention to utilize advanced Japanese technology so as to promote Sri Lanka’s economic development and to contribute to improve the business environment of Japanese companies in Sri Lanka.

  • Japan also pays attention to the promotion of industries which contributes to Sri Lanka’s economic growth, including cooperation in the areas of science and technology.

(2) Development of emerging regions

  • With the economic growth of Sri Lanka, there seems to be widening regional as well as income gap. There are also areas lagged behind due to the effects of the past conflict. Considering these, Japan will assist in fostering agro-based and other industries, agriculture-related infrastructure development in order to promote the livelihoods of the people in emerging regions.

  • Japan also pays attention to the coastal regions where people live primarily on fishing, and will continue to assist demining activities mainly in the North.

(3) Mitigation of vulnerabilities

  • Along with its economic development, actions to mitigate Sri Lanka’s vulnerabilities are required. There are needs to improve social service system and disaster management particularly for recurrent heavy downpour due to monsoon as Sri Lanka’s characteristics of the island nation.

  • Japan will assist in the improvement of the social service system specifically by improving the facilities and capacity building in the health sector. Japan will also assist to improve the efficiency of disaster management system of the Government of Sri Lanka.

4. Other points to be considered

(1) Japan pays attention to assistance with the consideration of regional and community balances in the country in order to encourage the efforts of Sri Lanka for national reconciliation.

(2) Japan also pays attention to other development partners’ activities, as the World Bank revised its assistance policy toward Sri Lanka in 2012, and in recent years, emerging countries such as China and India actively assist Sri Lanka.

(3) In order to support the sustainable economic development of Sri Lanka, Japan also pays attention to the environmental conservation. Japan also considers assisting in sectors such as human resource development, including in the area of higher education and the science and technology, in order to support further efficient and appropriate economic and social management of Sri Lanka.

(4) Japan continues to attach a high value towards public-private coordination and cooperation with NGOs and international agencies.


Annex: Rolling Plan




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