Country Assistance Program Evaluation for Sri Lanka

Evaluation Document | 3 October 2016

This evaluation assesses ADB’s support for Sri Lanka over 2006–2015, to inform the preparation and design of a new country partnership strategy that will guide ADB’s Sri Lanka operations from 2017 to 2021. 

ADB support for Sri Lanka over 2006–2015 was found to be successful. ADB operations achieved substantial progress toward most of their country partnership strategy development objectives, particularly in the infrastructure sectors and education in which notable improvements in service delivery were made. ADB support was relevant to the government’s Development Policy Framework, which called for higher investment in infrastructure in lagging regions and service expansion in transport, energy, and water and sanitation. Even so, while ADB was able to scale up its delivery, there was declining attention to sector and macroeconomic policy reform over the period.

The program was rated broadly effective in all sectors, except for sovereign operations in the finance sector, which were rated less than effective, on account of poor commitment and ownership by the government plus a lack of political will to carry out reforms. Development impact ratings were also in line with this, with a lower score for the sovereign financial sector program.

The sustainability of the impressive infrastructure achievements remains a key risk, especially for transport, energy, and multisector operations, which were rated less than likely sustainable. There is evidence that ADB’s attention to policy reform in each infrastructure sector declined over the evaluation period while lending increased. The proportion of technical assistance to total loan approvals also declined. This reflects the government’s push to increase infrastructure investment over the period, while at the same time closing channels for policy dialogue.

Looking ahead to the next country partnership strategy period, ADB’s loan portfolio and the government’s development programs face significant sustainability risks. As Sri Lanka transitions to an upper middle-income country, access to concessional financing and technical assistance will decline putting the development agenda at risk unless domestic revenues can be adequately raised. The current government faces an uphill challenge to increase domestic tax revenues, and to attract the levels of private investment needed to expand services, and sustain growth. Sri Lanka needs ongoing support to consolidate its development achievements, reduce regional disparities, ensure inclusive growth, protect the environment, and sustain peace. In the next country partnership strategy, ADB should scale up its support for policy reform, private sector development, environmentally sustainable growth, and human capital development.

Note on IED's Country Evaluations and Validations

Using its 2015 Guidelines for the Preparation of Country Assistance Program Evaluations and Country Partnership Strategy Final Review Validations, the Independent Evaluation Department (IED) intends to provide an objective and informed judgement of the performance and results of country partnership strategies (CPSs), particularly in terms of their relevance, effectiveness, efficiency, sustainability and development impacts.

In ascertaining relevance, IED considers not only the alignment of the program with country needs and government objectives, but also cross-sector CPS objectives, appropriateness of modalities and sector program designs, and sufficiency of donor coordination.

The effectiveness of a country program in delivering results is also an important aspect of an IED evaluation. Primary focus is on the achievement of the outcomes and outputs of ADB interventions (and the likelihood of achievement if the program is still ongoing), as worded in CPSs and their results frameworks. These include knowledge products and institutional development efforts.

Performance and results are likewise judged from an efficiency perspective, that is, whether the program was delivered in a cost-effective and timely manner, and generated value for money. It also considers the capacity of executing agencies that may contribute to start up and implementation delays, and cost overruns.

Another critical element of IED's evaluation is the likely sustainability of results over the medium term, technically, financially, environmentally, socially, politically, and institutionally. Further, IED looks at how results led to development impacts. Specifically, whether ADB contributed to achieving the CPS objectives, directly through its sector programs and implementing cross-cutting agenda(s) across various modalities in different sectors and by various development partners.

IED gives special importance to cross-cutting objectives by considering how the cross-sectoral and thematic objectives of the CPS are articulated in the results framework and provided with appropriate indicators and targets; and how the program achieved the cross-sector thematic results. Equal weights are given to the achievement of sector and cross-cutting objectives in the relevance and development impact assessments, in both country assistance program evaluations (CAPEs) and CPS final review validations (CPSFRVs). This aligns with ADB's increasing emphasis on achieving corporate strategic priorities.

In preparing its country evaluations and validations, IED conducts document reviews, consults with concerned departments, staff, governments and other stakeholders, and undertakes evaluation missions. IED has put in place a quality assurance system to ensure consistent application of its 2015 guidelines. In CPSFRVs, IED's primary focus is to validate the evidence presented in the CPS Final Review.