Final Project for the World Bank Group - Coursera Course '' Billions to Trillions to Action - Mobilizing Finance for Development 2016 - 2030 ''

1. DOMESTIC RESOURCE MOBILIZATION (DRM)
KEY TO MOBILIZE FINANCE FOR DEVELOPMENT IN SRI LANKA
Assignment for World Bank Group Course
‘ Billions to Trillions to Action – Mobilizing Finance for Development 2016 - 2030’
Hillary N. Fernando (Colombo - Nov 2015)

2. DRM - The key issue for Sri Lanka in Financing Development & SDGs
For Sri Lanka’s development and achieving SDGs, like for many developing countries, the key issue is financing. Both
finding the flow of money and management of finance. Some of the data presented below explains why Domestic
Resource Mobilization (DRM) is so critical for Sri Lanka.
• Sri Lanka’s current Tax/GDP ratio is only 11.4 % with a GDP USD 74.94 Billion & Growth 6.9%. The constraints are
tax administration, weak capacity and obtaining effective & efficient tax policy.
• Sri Lanka’s ODA has been diminishing as a LMIC and its ODA is 0.61% of the GDP (2013).
• Remittances of USD 6.4 Billion and FDI USD 932 Million (2013) still need to grow with the right incentives.
• The most substantial development spending is at the national level in the form of public resources and bi-lateral
loans. However its External Debt of USD 25.16 Billion (2013) with a Debt / GDP ratio of 37.4 % of GDP, is a huge
fiscal pressure on the country’s economy & development.
• Its local capital markets, private equity funds and venture capital resources are not very well developed. It has
two Pension Funds (EPF & ETF) that have substantial financial resources available, but their poor past investment
management record has created suspicion among the stakeholders on use of these funds for public-private
development financing.
• Finally the 3-Cs: Capacity, Capture and Corruption have been major constraints with Sri Lanka’s framework
institutions and poor performance by previous regimes that managed past development projects.
These issues have prompted me to use this artefact to engage and inform my target audience, the people of Sri
Lanka and my colleagues interested in SDGs the concepts of DRM, the SDGs and the way forward for Sri Lanka.
Sources: http://data.worldbank.org/country/sri-lanka
http://data.worldbank.org/indicator

3. SDGs provide UN’s Vision for Development.
Mobilizing Finance is crucial for achieving it.
Source: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=3

4. Financing Process to Achieve Development Returns
Source: Page 3 of http://www.worldbank.org/mdgs/documents/FfD-MDB-Contributions-July-13-2015.pdf

5. Unlocking Financial Resources for Development
Sources: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=5
https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=37

6. What is DRM & How crucial is it to finance SDGs ?
Source: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=5

7. Sri Lanka’s Strategies For Public Resource Mobilization
Smarter use of
ODA to catalyse
other finance
resources
Tax Revenue &
Tax
Administration
Combat Illicit
financial flows
Fiscal
decentralization
and engagement
of local
governments
Revision or
elimination of
subsidies
Raise Voice
Against Corruption
Recovery of Stolen
Assets
Improving public
expenditure &
financial
accountability
Public
Resource
Mobilization
Source: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=5

8. Sri Lanka’s Strategies For Private Resource Mobilization
Local SavingsCapital
Markets
Institutional
Investors
Foreign
Direct
Investments
(FDI)
Pension
Funds
Asset
Managers
Sovereign
Wealth Funds
Public Private
Partnerships
(PPP)
Private
Resource
Mobilization
Source: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=5

9. Why Public Private Partnerships are essential for DRM and Sri Lanka
Improve access to
basic services
2• Accelerated construction
• On-time and On-budget delivery
• Shifting risk to private sector
• Regular maintenance and
upgrade
Increase quality and
efficiency
3• Higher quality service standard
• Better identification and
allocation of risks
• Sharing risks with private
partner
• Increased efficiency of facilities
and services
• Access to best practices and
private expertise
Mobilize capital
1• Access to new private financing
• Better budgetary efficiency
• Value for money
Source: http://www.ifc.org/wps/wcm/connect/AS_EXT_Content/What+We+Do/IFC+and+PPPs/Why+PPPs/

10. Way forward for Sri Lanka to Finance Development
• Sri Lanka must use DRM as the key mechanism to finance development mobilizing the resources of
both public and private sectors.
• Effective DRM, good infrastructure and efficient services constitute the back bone of development
that will foster and stimulate achieving SDGs in Sri Lanka.
• To mobilize resources of both the public and private sectors in effective and efficient financing, the
government of Sri Lanka should focus on regulatory frameworks, policy, planning and delegation
best practices while attracting innovation, technology and efficiency of the private sector.
• To be successful in achieving SDGs, Sri Lanka must carryout a thorough analysis of the long-term
national infrastructure & service objectives, prioritising the projects for effective implementation.
• Implementing infrastructure projects as PPPs is crucial for mobilizing private finance in Sri Lanka.
• Sri Lanka’s legal, institutional and monitoring & evaluating mechanisms must be strengthened
through effective frameworks of good governance, rule of law and transparency.
• Sri Lanka must reach out for the expertise and assistance available from the resource centres of
MDBs and global institutions like UN, World Bank and ADB to move forward in financing
development with a horizon, vision and steps to achieve SDGs by 2030.
*********************

11. References
1. World Bank Data Indicators: http://data.worldbank.org/country/sri-lanka
2. What Is Development? By Jan Eliasson - Deputy Secretary-General of the United Nations
: https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=3
3. What is Financing for development by Susan McAdamsv-Senior Advisor, Development Finance, World Bank Group:
https://class.coursera.org/fin4devmooc-001/wiki/Week_1_Video_Talks
4. The New Framework for Financing Development by Bertrand Badré - WBG MD and Chief Financial
Officer :https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=5
5. From Billions to Trillions - MDB Contributions to Financing for Development/Page 3:
http://www.worldbank.org/mdgs/documents/FfD-MDB-Contributions-July-13-2015.pdf
6. Business model of MDBs by Susan McAdams Senior Adviser, Development Finance, World Bank Group:
https://class.coursera.org/fin4devmooc-001/lecture/view?lecture_id=37
7. Why PPPs? /World bank- IFC site:
http://www.ifc.org/wps/wcm/connect/AS_EXT_Content/What+We+Do/IFC+and+PPPs/Why+PPPs/
8. Private Participation in Infrastructure Database: http://ppi.worldbank.org/
9. Public-Private Partnerships: How can PPPs help deliver better services?: https://class.coursera.org/effectiveppp-
001/wiki/Welcome
10. How to Engage with the Private Sector …. – PPIAF: https://www.ppiaf.org/sites/ppiaf.org/files/publication/How-to-
engage-with-private-sector-Clemencia-Farquharso-Yecome-Encinas.pdf
THANK YOU