Healthy socio-economic recovery of informal sector micro and small enterprises in severely COVID-19 impacted districts of Sri Lanka

Sri Lanka has been badly hit by the socio-economic fallout of the global COVID-19 crisis. While the number of cases reported are at a relatively reasonable rate, the government’s quick reaction has largely managed to contain the spread of the disease, but the impact on production, consumption, jobs, incomes and livelihoods has been massive. A recent World Bank (WB) report indicates that Sri Lanka’s economy could contract by as much as 3%, with debt growing to 91.6% of GDP and the budget deficit growing to 9.8% this year. The report from ICRA Lanka with similar findings forecasts that the long term impact of COVID-19 on the agriculture sector will be minimal as the sector is quite resilient to the external shocks. It rather indicates that most of the impact will be felt in services and industry sectors as these sectors are more open to external shocks, operate in the informal sector, which is echoed by the WB report too. The proposal intendes to contribute to the DWCP 2018-2022 Country Priority 1, Creation of sustainable, inclusive and decent employment P&B Outcome 7 - Adequate and effective protection at work for all; Outcome 4 - Sustainable enterprises as generators of employment and promoters of innovation and decent work; OBW LKA107 – Sri Lankan workforce have more and better employment opportunities The project is implemented in two of the hardest hit districts – Kalutara and Gampaha - where a large number of MSEs in the informal economy struggle to survive and build back. Implementation is in collaboration with respective public and private sector institutions/organizations who would own and scale them up beyond those districts. The project collaborates with the Ministry of Health and Ministry of Skills Development, Ministry of Labour to implement the respective project activities in the targeted districts. This is subsequently be replicated nationwide through their respective departments and local structures. For MSEs’ access to BDSs, the project collaborates with the Small Enterprise Division (SED), Ministry of Youth and Sports and EFC to roll out project activities for the targeted enterprises within the districts. At the same time, the project partners with SED to expand BDSs beyond the targeted districts. Overall, the scale-up plan is conceptualized with project strategies securely anchored in local institutional structures at the very outset of implementation. They also build on work underway in this area, so the institutional uptake as well as receptivity of MSEs will be higher.

Project symbol

LKA/21/50/JPN

Admin unit

CO-Colombo

Start date

01/07/2021

End date

30/04/2023

Total allocation

92856

Total expenditure

Status

Closed

92856

Development Partners

Japan, Ministry of Health, Labour and Welfare

Country/Countries

Sri Lanka

Outcomes

Outcome 4: Sustainable enterprises as generators of employment and promoters of innovation and decent work