In the recent week, the Building State Capability (BSC) program unveiled two insightful papers reflecting on its on-ground PDIA (Problem-Driven Iterative Adaptation) engagements in Sri Lanka. The first document delves into initiatives aimed at enhancing Sri Lanka’s business and investment landscape, a topic explored in this discussion. A subsequent article, to be detailed in another discussion, focuses on boosting foreign direct investment (FDI) in the nation. These publications build upon a previous report released earlier this year, titled ‘Learning to Target for Economic Diversification’, documenting the rigorous efforts by Sri Lankan government teams. With the guidance of BSC, these teams utilized PDIA methodologies to confront and navigate critical challenges impeding Sri Lanka’s journey towards economic diversification and sustainable growth.
The Genesis of BSC’s Intervention in Sri Lanka
BSC’s involvement in Sri Lanka commenced in July 2016 amidst the country grappling with decelerating GDP growth, a significant current-account deficit, diminishing export performance, and inadequate diversification, coupled with low FDI inflows as a percentage of GDP, especially when juxtaposed against nations like Vietnam and Malaysia. The Sri Lankan Government sought the expertise of CID to aid in designing and implementing reforms to surmount these obstacles.
Leveraging insights from PDIA engagements with governments in Albania among other countries, BSC seized the opportunity to refine its ‘Launchpad’ process for Sri Lanka. This six-month intensive action-learning program enables government teams to address priority issues. In September 2016, five teams comprising Sri Lankan officials embarked on Launchpad, each tackling distinct but interrelated economic challenges, including identifying new strategic sectors for Sri Lankan export and investment, attracting FDI, enhancing the business climate, stimulating key exports, and bolstering tourism performance.
The “C Team” Journey
One team, known as the “C Team” and consisting of members from Sri Lanka’s Board of Investment, was central to the narrative of the first paper. Their mission was to address the challenge: “Attraction of FDI is not perceived as a national endeavor by the state, undermining investor confidence for swift project implementation.” The team’s goals included fostering a supportive investment climate for expedited project approvals and implementation, increasing project numbers, creating jobs, and improving living standards and income.
Embarking on this mission, the C Team initially deconstructed their primary challenge into smaller segments and prioritized them. This approach stemmed from the understanding that extensive planning often falls apart when confronted with reality’s unpredictability, advocating instead for a strategy that accommodates iterative refinement based on emerging insights and adjustments.
Progress Through Iteration
Following the identification of core issues, the C Team outlined an action plan emphasizing short-term objectives and longer-term goals. Their focus areas included enhancing industry consultation, bolstering research and information accessibility, and aligning labor training with productivity needs. The bi-weekly check-ins facilitated by BSC served as milestones for evaluating progress, learning from actions taken, and recalibrating strategies accordingly.
As the process unfolded, the C Team iteratively refined their problem understanding and response strategy, eventually identifying six priority issues demanding resolution. These ranged from simplifying exchange control systems to addressing specific VAT challenges, promoting Sri Lanka as a startup hub, addressing labor skill gaps in manufacturing, establishing a Special Economic Zone for water-intensive industries, and improving the investment approvals process within the Board of Investment.
Outcomes and Impact
By the conclusion of the six-month Launchpad initiative, the C Team had made significant strides in addressing the identified challenges, achieving key milestones, and laying the groundwork for future progress. Their efforts culminated in a final workshop in Colombo, marking the end of an intensive period of action, learning, and adaptation.
The success of the C Team and their counterparts underscores the potency of the PDIA approach in tackling complex challenges through incremental, informed actions. It highlights the importance of fostering local capabilities and learning from both successes and setbacks. As BSC continues to share these narratives, it aims not only to provide a roadmap for similar endeavors but also to celebrate the perseverance and achievements of the teams involved, demonstrating that significant progress is possible through dedicated, iterative effort.
Conclusion: Reflecting on Progress and Pathways Forward
The journey of the “C Team” and their counterparts in Sri Lanka, as chronicled by the Building State Capability program’s recent publications, illustrates a compelling narrative of perseverance, adaptability, and collaborative problem-solving. Through the application of the Problem-Driven Iterative Adaptation (PDIA) approach, these teams confronted complex economic challenges with a methodology that prioritizes learning, flexibility, and incremental progress. The outcomes of their efforts not only reflect tangible improvements in Sri Lanka’s business and investment climate but also underscore the transformative power of enhancing governmental capability and fostering a responsive and collaborative relationship between the government and the private sector.
This narrative serves as a testament to the potential for meaningful change when government teams are empowered to engage deeply with the issues they face, iterate solutions, and learn from each step of the process. The BSC’s work in Sri Lanka, especially through the experiences of the “C Team”, provides valuable insights for other countries and teams facing similar challenges. It highlights the importance of adopting a nuanced, context-aware approach to problem-solving in government and economic development.
Key Takeaways from the BSC Program’s Engagement in Sri Lanka:
- Iterative Learning and Adaptation: Emphasizing the importance of adapting strategies based on continuous learning and feedback, rather than rigidly adhering to initial plans;
- Engagement and Collaboration: The necessity of engaging with a wide range of stakeholders, including industry representatives and government officials, to understand challenges and co-create solutions;
- Addressing Complex Challenges: Demonstrating the efficacy of breaking down complex issues into manageable parts and prioritizing them for action;
- Fostering Local Capabilities: The critical role of building local government capabilities to tackle problems independently, reducing reliance on external interventions;
- Incremental Progress Toward Substantial Goals: Highlighting how small, consistent steps can lead to significant impacts and progress towards broader economic and social objectives;
- The Power of a Responsive Government: Showcasing the impact of a government that actively listens to and addresses the concerns of the private sector, fostering an environment conducive to growth and development.
The experiences documented through the BSC program’s publications offer a blueprint for achieving sustainable growth and development through informed action, collaboration, and a steadfast commitment to addressing the real needs and challenges of a nation. As the Building State Capability program continues to share its findings and support other nations in their developmental journeys, the story of the “C Team” remains a beacon of inspiration for what is possible with the right approach and mindset.