Two weeks after the Worldwide Financial Fund (IMF) accomplished its third review of Sri Lanka’s Prolonged Fund Facility, unlocking tens of millions in important funding, President Anura Kumara Dissanayake’s cupboard accepted the Nationwide Anti-Corruption Motion Plan (NACAP) 2025-2029. This transfer, coupled with a sequence of daring governance reforms, indicators a paradigm shift in Sri Lanka’s strategy to worldwide market engagement and notion — one which roots the nation’s financial restoration in sweeping transparency and accountability reforms.
Since assuming workplace in September 2024, Dissanayake’s administration has prioritized systemic reforms over piecemeal measures, aiming to deal with the structural weaknesses that precipitated the nation’s 2022 financial collapse. This disaster, marked by extreme gas shortages, inflation, and a international alternate disaster, led to a default on worldwide debt. The present efforts, starting from public sector restructuring to digital transformation, aren’t merely about assembly IMF situations; they’re about positioning Sri Lanka as a reputable and enticing vacation spot for international funding.
The NACAP, unveiled final week, is the cornerstone of this technique. In contrast to earlier fragmented anti-corruption efforts, this complete five-year plan integrates institutional reforms, such because the institution of an Asset Disclosure Directorate, with stringent enforcement mechanisms. By prioritizing transparency, the federal government goals to rebuild belief with worldwide lenders and buyers, a important step in stabilizing the financial system.
On the similar time, renewed give attention to the Fee to Examine Allegations of Bribery or Corruption (CIABOC) to analyze offences additional underscores long-scarce political will to fight endemic corruption. The fee’s failure to safe convictions and perceptions of selective enforcement led to widespread public skepticism in earlier years. The brand new NACAP supplies a roadmap of actions for CIABOC over the subsequent 5 years. This new, proactive strategy higher aligns with world governance requirements, enhancing Sri Lanka’s credibility and constructing investor confidence.
Constructing on this basis, Dissanayake’s administration can be overhauling the general public sector, specializing in restructuring state-owned enterprises (SOEs) by a proposed state holding firm. The proposed itemizing of the holding firm on the Colombo Inventory Change is a daring transfer to draw non-public funding, enhance SOE efficiency, and cut back fiscal burdens. This marks a departure from previous reliance on advert hoc cost-cutting measures, which didn’t tackle systemic inefficiencies.
On the similar time, the federal government is accelerating digital transformation initiatives, together with the Digital Id Card mission and the E-Asset Declaration System. These measures will streamline bureaucratic processes, cut back corruption, and enhance public service supply. This cohesive technique contrasts with the earlier administration’s scattered strategy to digital governance, providing a extra built-in and clear framework for public administration and public sector transparency.
Complementing these efforts, the 2025 funds, adopted in March, launched progressive tax reforms, elevating company earnings tax charges for particular industries and eradicating export service exemptions. This shift from oblique taxes and advert hoc exemptions goals to broaden the tax base and enhance compliance, important for assembly IMF fiscal targets and stabilizing public funds.
Parallel to these efforts, the repeal of the colonial-era International Debt Act in December 2024 and its integration with the Public Debt Administration Act (2024) create a much-needed unified framework for debt administration by centralizing the administration of presidency borrowing. This reform contrasts with the earlier administration’s reactive strategy, which exacerbated the nation’s debt disaster, and positions Sri Lanka for improved fiscal oversight, debt sustainability, and macroeconomic stability.
Lastly, the “Clear Sri Lanka” mission launched in January ties Dissanayake’s financial growth agenda to a nationwide environmental and social sustainability initiative. Regardless of official criticism in regards to the initiative’s imprecision, it establishes a basis upon which to advertise moral governance, entice ESG-conscious buyers, and foster larger societal buy-in to the administration’s transparency and accountability measures.
Collectively, these reforms characterize a metamorphosis in how Sri Lanka intends to have interaction world markets. By rooting its international financial technique in home governance enhancements, the administration is addressing the structural weaknesses which have lengthy hindered the nation’s progress and ballooned its international debt. These measures not solely fulfill IMF situations but additionally improve Sri Lanka’s attraction to international buyers and multilateral lenders.
Challenges stay, nevertheless. The long-term success of those initiatives would require sustained coverage momentum amidst public and political backlash in opposition to painful tax will increase and subsidy removals. As Sri Lanka navigates this advanced terrain, its progress might be intently watched by worldwide stakeholders, whose confidence within the nation’s financial restoration hinges on tangible outcomes like sustained progress and decreased borrowing prices.
For now, Dissanayake’s governance-driven financial technique affords a compelling case research of how small states can leverage home reforms to reinforce their world standing. By prioritizing transparency, accountability, and effectivity, Sri Lanka is rewriting its financial narrative—one reform at a time.
