1. International Financial Institutions and Debt 2nd South Asian Workshop Kathmandu 14-15 January 2009
Sri Lanka Country Presentation
B. Skanthakumar
Law & Society Trust (LST)

2. Socio-Economic Indicators
Area sq km
Population (2001)
Total: million
Female: million
Male: million
By Ethnicity (2001)
Sinhala: million
Muslims: million
Up-Country Tamils:
NE Tamils:
Others:
By Religion (2001)
Buddhist: million
Islam: million
Hindu: million
Christian: million
Life Expectancy at birth (2007) years
Infant Mortality Rate (2005) per 1000
Adult Literacy Rate (2005) %
Human Development Index

3. ‘Mahinda Chintana’ 10 Year Development Framework (2006-2016)
2003 PRSP ‘Regaining Sri Lanka’ rejected
No New Borrowings from IMF & IBRD
Infrastructure Development (energy, telecommunications, roads, ports, airports, irrigation etc.) prioritised
‘Look East’: Chinese, Indian and Iranian state capital
Non-Privatisation Policy (abolition of PERC); SOE Reform & PPP instead
Subsistence to Commercial agriculture (agro-exports)
Foreign Investment Friendly incentives extended
300 Rural Garment factories programme

4. Government Expenditure (2009 estimates) Source: Appropriation Bill 2008
Total Expenditure Rs
Defence Rs
18% of Total
Health Rs
5.8% of Total
Education Rs
2.12% of Total
Housing Rs
Social Welfare Rs

5. Exports (2007) Export Composition (2007/1977)
Industrial Goods: % / 14%
Mainly textiles & garments
Agricultural products: % / 79%
Mainly tea & rubber
Export Markets
USA (RMGs)
EU esp. UK (Tea & RMGs)
India (Vanaspathi, Copper)
Gross Export Earnings
Textiles & RMGs: US$3 341million
60% inputs imported
Remittances: US$2 502 million
Tea: US$1 025 million
Tourism: US$385 million

6. Debt Status 2007 Source: Central Bank of Sri Lanka, Annual Report 2008
Total Govt Debt: US$27 billion / Rs 3070 billion
Domestic Debt: 58%
Foreign Debt: 42%
Concessional Debt: 83%
Non-Concessional: 17%
Total Debt Service: US$4.5 billion / Rs500.5 million
External Debt Denominations:
SDRs: 37.5%
Yen: 25%
US$: 19.7%
Euro: 11%
Others: 6.8%

7. Donor & Loan Profile (2006) Source: Central Bank of Sri Lanka, Annual Report 2006
LENDERS
Government of Japan
US$262.5 million
Asian Development Bank
US$174.9 million
International Development Association
US$100.2 million
Citicorp Investment Bank
US$100 million
Government of Germany
US$55.2 million
HSBC Ltd
US$50 million
LOANS
Soft Loans
US$932 million
Grants
US$287 million
Commercial Loans
US$150 million
Programme loans
US$52 million

8. Government Foreign Debt 1998 – 2007 (Rs millions)
OWNERSHIP
1998
2001
2004
2007(a)
Multilateral
ADB
IDA
IBRD
94 583
600
521
221
231
Bilateral
Japan
Germany
USA
PRC
India
30 132
45 789
1 670
1 135
32 953
58 064
3 219
1 855
56 301
57 078
3 342
10 311
94 346
52 814
22 668
14 843
Commercial
Citibank
Riggs National Bank
Salomon Bros
14 958 --
917
864
41 544
3 754
923
53 547
10 433
3 980
739
21 743
3 746
462

9. Debt Profile Source: State of the Economy 2008, Institute for Policy Studies, p. 20.
2004
2005
2006
2007
2008a
Government Debt / GDP
102.3
90.6
88.7
85.8
82.3
Total Foreign Debt / Exports (b)
134.8
120.6
127.5
129.5
Foreign Debt Service / Exports (b)
6.4
3.6
7.1
8.2
11.5
Debt Service Payments / GDP
14.4
14.1
15.1
14.0
Debt Service Payments / Government Revenue
96.5
90.8
93.0
88.6
80.2

10. Debt Service Ratio (Source: Central Bank of Sri Lanka Annual Report 2007)
1990
2000
2004
2006
2007
% of Exports
17.8
14.7
11.6
12.7
13.0
% of Current Receipt
15.3
12.2
9.4
9.8
9.9

11. Debt Service Burden (US$ millions) Source: State of the Economy 2008, Institute for Policy Studies, p. 21
Donor
2006
2007
2008
2009
2010
Total
538.1
589.1
707.4
581.8
576.2
Japan
198.0
219.1
219.8
214.6
210.5
Multilateral
135.6
148.4
167.9
182.2
192.5
Commercial
43.1
41.0
139.6
7.4
6.7

12. Major Donors and Projects (in US$ millions) in 2007 – I Source: Central Bank of Sri Lanka Annual Report 2007, p. 109
Government of Japan / JBIC
e.g. Southern Highway Construction
e.g. Upper Kotmale Hydro-Power
e.g. Walawe Left Bank Irrigation and Extension
Government of China
e.g. Norochcholai Coal Power Plant
e.g. 100 Railway Carriages
Asian Development Bank
e.g. Southern Transport Development
e.g. Road Network Improvement
e.g. Power Sector Development

13. Major Donors and Projects (in US$ millions) in 2007 – II Source: Central Bank of Sri Lanka Annual Report 2007, p. 109
International Development Association
e.g. Road Sector Assistance
e.g. North East Housing Reconstruction
e.g. Renewable Energy for Rural Development
European Investment Bank
e.g. Post-Tsunami Line of Credit
e.g. DFCC Global Loan
Government of Denmark
e.g. Colombo Sewerage Rehabilitation

14. Trends
Shift from multilaterals (esp. IMF & IBRD) to bilaterals and commercial banks (e.g. HSBC, Citicorp etc.)
Shift from Concessionary to Commercial borrowing (avoidance of conditionalities)
Shift from Western donors to Asian donors (Kohona doctrine)

15. Sri Lanka into the Debt Trap?