Sri Lanka, Australia to collaborate on strengthening governance, market systems development

Sri Lanka and Australia have signed two subsidiary arrangements aimed at collaborating on strengthening governance and expanding cooperation in market systems development.

In a media release, the Australian High Commission in Colombo said a 10-year subsidiary arrangement that commits an initial AUD 30 million (LKR 6.3 billion) over five years to support improved governance in Sri Lanka.

Through a suite of programs, the arrangement supports the Sri Lankan government, nonprofit institutions and civil society to improve evidence-based policy and decision-making, deliver better services for communities, and increase the voice and agency of marginalised groups, including women.

Lead delivery partners include the World Bank, The Asia Foundation, and the International Foundation of Electoral Systems. The program will also support twinning arrangements between Australian and Sri Lankan institutions.

This investment builds on a previous five-year arrangement valued at AUD 31 million (LKR 6.5 billion) over five years, according to the High Commission.

Secretary of the Finance Ministry Mahinda Siriwardana noted that in line with the IMF Governance Diagnostic and program for Sri Lanka, supporting improved governance is necessary to deliver long-term economic growth and stability.

Speaking in this regard, Australian High Commissioner Paul Stephens said Australia is pleased to continue its longstanding assistance. “Strong governance systems are critical to support resilient and inclusive economic growth, and to ensure that all Sri Lankans stand to benefit from that growth.”

Additionally, the two countries have signed a five-year subsidiary arrangement committing to ongoing development cooperation in market systems development, focusing on economic diversification and generating foreign exchange, while also strengthening livelihoods and women’s economic empowerment.

The arrangement builds on the previous five years of investment in the Market Development Facility (MDF) program, with an additional investment of AUD 12.1 million (2.55 billion LKR). AUD 9.45 million (1.99 billion LKR) was provided in phase one of the program, another media release issued by the High Commission read.

Since 2015, MDF has been a catalyst for economic development, working closely with the private sector and spearheading innovative solutions that support Sri Lanka’s tourism and agriculture sectors.

Mr. Stephens said Australia was pleased to support sustainable development that increases profits and improves livelihoods. “Through MDF, Australia looks forward to engaging with the private sector to build partnerships which will continue to drive prosperity and inclusivity for a resilient recovery.”

Finance Secretary Mahinda Siriwardana said the partnership between Australia and Sri Lanka supported economic growth and development, particularly in key sectors of tourism and agriculture.

The program partners with businesses of all scales to enhance competitiveness, generate foreign exchange and contribute to Sri Lanka’s economic recovery. In tourism, this includes a focus on sustainable, high-value tourism; in agriculture, MDF focuses on implementing commercially viable business models that improve agricultural productivity and quality, while promoting climate-resilient agriculture and affordable agricultural technology.

Through MDF, Australia is a longstanding champion of Sri Lanka’s emerging speciality coffee sector, collaborating with partners to establish Sri Lanka as a global speciality coffee destination. The program is also looking to expand select agricultural value chains such as mango, cashew, mushroom and peanuts, which hold export potential but also engage significant numbers of smallholder farmers, including women.

MDF is now looking to expand climate-focused investments to support greater energy efficiency and resilience in the face of environmental shocks, particularly for agribusinesses, the High Commission added.