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$200 Million Catalyst to Recharge Sri Lanka's Health System

April 3, 2013

Simone D. McCourtie/World Bank

  • Sri Lanka has better health indicators than most developing countries and many lower-middle-income countries. But as it develops economically and its population ages, it is seeing growing problems in areas such as nutrition and non-communicable diseases.
  • A $200 million World Bank loan will help upgrade the public health system and enable it to better respond to these challenges.
  • This project will benefit the entire population, and will help revolutionize the system by improving the linkages between budgeting, planning, and monitoring in the health sector.

Sri Lanka has impressive health achievements when compared to other developing and lower-middle-income countries. Maternal and infant mortality rates are at 36 per 100,000 and 12.2 per 1,000 live births, respectively.

The country is experiencing a demographic and epidemiological transition, partly due to its success in the health sector -- an aging population with life expectancy at 74.9 years, and 9.2% of the population over 60.  

In the last 50 years, Sri Lanka has seen a reduction from 42% to 20% in the proportion of deaths due to infectious diseases, yet the percentage of deaths from cardiovascular disease has risen from 3% to 24%. Nutrition also poses a problem in Sri Lanka, where under-nutrition and over-nutrition coexist, sometime within the same family. 

The rising trends in non-communicable diseases are associated with the changing age distribution, economic development, urbanization, increased motorization, and changes in lifestyle.

To help address these issues, the International Development Association approved a $200 million loan to the government of Sri Lanka on March 27. 

“Investing in further improvement of the health system will be a critical prerequisite for Sri Lanka’s vision,” said Diarietou Gaye, country director, World Bank Sri Lanka. “A more modernized and efficient health system employing more international standards will not only help achieve the objective of improving living standards and social inclusion, but it will also contribute to the broader objectives set out in the Mahinda Chintana document, including sustained economic growth, and a move toward a knowledge-based and competitive economy.”

" Investing in further improvement of the health system will be a critical prerequisite for Sri Lanka’s vision. "

Diarietou Gaye

Country Director, World Bank Sri Lanka

The Second Health Sector Development Project will help ensure that Sri Lanka will not become complacent with its impressive health indicators, but rather push forward to tackle areas that need additional attention, such as nutrition and non-communicable diseases. In addition, the project will give opportunities to enhance and update the skills and knowledge of health staff across the country and to further improve the quality and efficiency of health services in Sri Lanka.

The project is expected to become effective in August 2013 and will close in September 2018. The terms of the concessionary loan are a 1.25% interest rate with a grace period of five years and a 20-year repayment period.

$190 million will be added to the government of Sri Lanka's Health Master Plan, and $10 million will go toward capacity building, results monitoring, research, and innovation in health care.

“The current health system needs improvements to deal effectively with emerging health problems of a middle-income country such as ours,” said Kumari Vinodhani Navaratne, World Bank senior health specialist. “Developing a modern health management information system, establishment of a quality assurance system, strengthening the capacity for results-based planning and management, and strengthening the coordination between institutions and agencies for coordinated development and continuing human resource development are essential to improve the health system and better address the changing health needs of Sri Lanka.”

 A System of Checks and Balances

The project will be implemented by the Ministry of Health in close collaboration with the Ministry of Local Government and Provincial Councils, Finance Commission, all nine provincial councils and the respective Provincial Health Departments. The Ministry of Finance and Planning will provide overall oversight to the project. 

The project will be monitored through a project steering committee with representation from the Ministries of Health, Finance, Local Government and Provincial Councils, Finance Commission and the nine provinces. In addition, at each of the levels from district to the central level, the project will be monitored as part of the monitoring of the National Health Development Plan. An update on the agreed results will be reviewed biannually, and the achievement of the agreed annual targets will be reported to the Word Bank by the Ministry of Finance and verified by the World Bank in consultation with the Ministry of Finance and the Ministry of Health annually.