Turning Sri Lanka’s Urban Vision into Policy and Action

Sri Lanka's country vision, as defined in the government’s policy framework – the Mahinda Chintana – is to become a global hub between the East and the West and an upper-middle income country by the year 2016. Its Urban Vision is to develop as a system of competitive, environmentally sustainable, and well-linked cities and to provide every family with affordable and adequate urban shelter by 2020. A new World Bank policy note provides an initial assessment of Sri Lanka’s urban characteristics, outlining the challenges ahead and broad policy directions for turning the urban vision into policy and action.

The high productivity of the Colombo Metropolitan Region – driven by agglomeration economies – is one of Sri Lanka’s most valuable assets for achieving upper middle-income status. But the Colombo Metropolitan Region needs to become more competitive with other Asian cities. Strengthening its most dynamic service sectors (information technology and financial services) and shifting from low to high-value added manufacturing should take priority.

"By creating a linked system of cities, Sri Lanka can tap into its diverse and resource-based competitive advantages, such as tourism, agro processing and fisheries," said Elisa Muzzini, Senior Economist for the South Asia Urban & Water Unit. This Urban Vision will also be facilitated by Sri Lanka’s small territory, easy topography, and a government plan to improve connectivity by building an expressway network that would allow most cities to be well linked.

"Sri Lanka is in a good position to ensure adequate and affordable shelter to urban dwellers given its track record in providing basic services and expanding access to infrastructure to the under-served population," said Laxman Perera, Habitat Program Manager for Sri Lanka. Achieving this long-term vision rests on preventing informal settlements from forming – by developing a functioning housing market that meets the needs of all segments of the urban population.

Systemic institutional and policy constraints, and infrastructure bottlenecks, are the main challenges ahead for developing Sri Lanka’s cities to their full economic potential. Limitations of municipal authority and resources (resulting in inefficiencies in urban planning and service delivery), high costs of sprawling and infrastructure bottlenecks are the three main constraints for developing a system of competitive cities.  Informal settlements result from regulatory bottlenecks and constraints on the supply of land, the absence of an adequate transport system linking core areas to the periphery and limited housing finance. These constraints limit the production of formal housing by the private sector and keep formal shelter beyond the reach of a large segment of the urban population.

Achieving the urban ision calls for system-wide institutional and policy reforms to leverage the economic benefits of improved regional and city infrastructure – with the objective of moving toward strategic and integrated national, regional and urban planning, repositioning Urban Local Authorities as competent and accountable service providers (while improving metropolitan and regional coordination in service delivery), and enhancing city livability through efficient and inclusive land and housing development.

We hope that this policy note will stimulate and facilitate evidence-based policy dialogue on Sri Lanka's urban transition, help identify priority areas where sector knowledge needs to be expanded and support the government as it translates its urban vision into reality.