Trade, Investment, and Industry Development Program- Subprogram 1

proposed

The Strengthening Trade, Investment, and Industry Development program aims to support the Government of Sri Lanka (GOSL) in building a resilient, inclusive, and globally competitive economy by addressing the binding constraints faced by the private sector in areas related to investment climate and trade facilitation through targeted structural reforms. To drive sustainable economic development and enhance Sri Lanka's export performance, the program will assist GOSL to (i) formulate and adopt strategic and policy frameworks for the effective investment, development, operations and promotion of climate- and disaster- resilient economic zones and eco-industrial parks, (ii) implement robust operational solutions to streamline inter-institutional coordination and government-to-business service delivery to improve the enabling environment for small and medium enterprises (SMEs), and (iii) implement measures to align with international customs practices to enhance trade facilitation. These reforms will also encourage the participation of women and disadvantaged groups in trade and business, foster innovation, promote the development of sustainable products, and incentivize green growth. The program is fully aligned with GOSL's reform agenda as articulated in the Memorandum of Economic and Financial Policies submitted to the International Monetary Fund (IMF);a and supports the strategic objectives of the ADB's country partnership strategy for Sri Lanka (20242028), which emphasizes private sector development and green growth.b The primary strategic focus areas (SFAs) of Strategy 2030 for the program are (i) private sector development due to the significant contribution to SME development, and (ii) regional cooperation and public goods due to the program's alignment with trade facilitation reforms (footnote a).c The program also aligns with the Paris Agreement, focusing on climate-resilient planning and operations within industrial development.d