World Bank Document

Report No. PID9352 Project Name Sri Lanka-Distance Learning Project (@) Region South Asia Regional Office Sector Institutional Development Project ID LKPE69784 Public Disclosure Authorized Borrower(s) SRI LANKA Implementing Agency Address DISTANCE LEARNING CENTER LTD. Distance Learning Center Company 28/10 Malalasekere Mawatha, Colombo 7, Sri Lanka Contact Person: Mr. Prabath Gunathunga Tel: 94-1-587671 Fax: 94-1-584406 Email: [email protected] Environment Category C Public Disclosure Authorized Date PID Prepared January 9, 2001 Projected Appraisal Date November 6, 2000 Projected Board Date February 20, 2001 1. Country and Sector Background BACKGROUND: Sri Lanka was the first South Asian state to liberalize its economy in 1977. However, insufficient exposure to international experience and policy trends limited the follow-up process of individual sector reform. Key stakeholders fearful of change were unaware of how similar concerns were addressed in other countries. The proposed LIL is intended to bridge this knowledge gap in support of market reform.Moreover, the public sector has not adequately adapted to the Public Disclosure Authorized liberalized economy. There is a need to examine the role of the bureaucracy, its interface with the private sector, access to technology and human resource capacity in the context of the modern demands of business and civil society. Sri Lanka is confronted with serious shortfalls in governance, be it the capacity to plan at the center, implement decisions at the periphery or ensure corporate governance. The scrutiny of public finances is weak at all levels of government. Internal control and audit systems have not been modernized in line with international best practice, the liberalized economy and devolution. The existing civil service culture hinders good governance, accountability and transparency. The reform of the civil service is needed for an institutional framework supportive of market-led growth. The Government has set up a 'Public Service Management Development Authority' (PSMDA) to address these issues.While distance learning alone will not resolve the shortcomings of public administration, it will nonetheless facilitate Public Disclosure Authorized improved governance through knowledge transfer. It will expose local decision-makers to international best practice and enhance the skills of local decision-makers in the priority areas of economics, finance and management. There is at present no incentive for a civil servant to undergo training since it does not determine his or her career prospects. The absence of mandatory on-the-job training for civil servants impacts negatively on administrative capacity. The PSMDA recommends an Annual Performance Review to decide promotions, increases in remuneration and training in the civil service. It proposes amendments to the Sri Lanka Administrative Service Minute to this effect. If this were to be implemented, it will increase civil service training as a whole.The internet, e-business and WTO-led trade liberalization have reinforced the globalization of markets and a degree of convergence in business operations. Improved corporate governance is therefore needed to facilitate strategic international partnerships. Sri Lanka is still short of the skills required in this context. The private sector lacks exposure to the latest trends in corporate finance and management. It lacks the supporting institutions and human resources that are critical to sound corporate governance. Several senior executives are due to retire while new leaders are poised to take over. Knowledge enhancement and skills development are needed in this transitional context. Distance learning course modules relayed from international institutions will strengthen corporate management while access to the latest technical information will allow the Sri Lankan private sector to effectively compete in the global economy. The recent proliferation of private training institutions in Sri Lanka is reflective of the demand for global knowledge in a fast changing world. However, these management institutes still lack real time access to the latest training materials, case studies and technical information from top notch accredited international content providers committed to excellence. The professional training system largely entails bringing individual experts to teach a course to a limited audience in Sri Lanka or sending a restricted number of persons abroad for training. This piece-meal approach is of insufficient scale to promote market reforms or enhance capacity in the public and private sectors. Neither is it cost-effective. The strategy of the Government is to introduce the distance learning method to complement existing training programs in the country and strengthen the scope of such programs. Multi-media internet-based distance learning will focus on global knowledge, governance and policy reform at lower cost. Distance learning will be a public-private partnership committed to serve the training needs of both sectors effectively.EXISTING TRAINING PROGRAMS: The Sri Lanka Institute for Development Administration (SLIDA), incorporated by an Act of Parliament in 1982, is the training arm of the civil service. It trains 3000 senior and middle-level civil servants each year, and inducts new recruits into the administrative service. It has 17 full time resource persons and several part-time lecturers. The Treasury funds 85t of the SLIDA budget while the rest is earned from course fees charged to the private sector, management consultancies and customized training. It identifies the course curriculum in keeping with official policy requirements, regular needs assessments and the feedback of past trainees. Internet-based distance learning will increase SLIDA's live access to relevant international experience, latest policy trends and specialized knowledge. It will facilitate increased policy debate within the civil service on current development issues. Distance learning will offer an increased range of courses that will keep pace with developments in the international arena and more positively impact on administrative capacity within Sri Lanka. The Sri Lanka Institute of Local Governance (SLILG), was incorporated by an Act of Parliament in September 1999. The Thirteenth Amendment to the Constitution (1987) devolved several administrative responsibilities to the eight provinces. The provincial bureaucracy, however, lacked the financial management and strategic planning skills to take on the responsibilities assigned to it. To date, no province has been - 2- able to develop a corporate plan or enact relevant legislation. Rural divisional secretaries lack internet connectivity and exposure to global knowledge. The 'Commission of Inquiry on Local Government Reforms' in 1999 emphasized the need to build capacity at the local level. SLILG endeavors to rectify the widespread lack of capacity and supports eight provincial-level "Management Development Training Units" (MDTU) to train provincial civil servants. SLILG, with a training budget of Rs 16 million, now has 100 external resource persons. It develops course curricula for the MDTUs, trains provincial-level trainers, holds workshops for senior provincial bureaucrats and undertakes consultancy assignments for provincial line agencies. As a new institution, SLILG still lacks the expertise to effectively train grass roots government officers in management. Most MDTUs are not fully functional either.The overall training required at present in the devolved authorities is of a rudimentary nature. Internet-based distance learning will not be the best instrument to address such needs. The English language course modules and the required level of expertise prevent middle-level provincial cadre from effectively using the Distance Learning Center (DLC). The limited size of the provincial and local government budgets also pre-empts the extensive use of DLC facilities.Senior grades in the provincial and local levels, however, can avail themselves of distance learning modules in financial management, policy analysis and broad development issues. The Government intends to approach other donors to support the initial training of provincial chief secretaries, deputy chief secretaries, secretaries to provincial ministries and divisional secretaries on a pilot basis. Distance learning will vastly enhance training opportunities and link grass-roots decision-makers to the borderless world of knowledge.The Sri Lanka Institute of Directors (SLID), established by the Ceylon Chamber of Commerce under the Company's Act in April 2000, was envisioned to provide training and development support for corporate executives. It emerged in response to a broad demand for education in corporate governance, currently unavailable in Sri Lanka. SLID, soon to be converted into an independent body, is in the process of developing a training program for business managers. It acts as an information resource and discussion forum for private directors. SLID has a membership of 735 Directors, Senior Managers and Corporate Partners. It organizes breakfast meetings on e-commerce and corporate governance, and external diploma programs for directors at the Chartered Institute of Directors in London, the University of Ulster and the Wharton School of Business in Singapore. In a survey of its membership carried out in August, 2000, most directors identified web-based learning experiences and distance learning programs in corporate governance, e-business and the legal ramifications

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