ADB continues to support Sri Lanka in new areas such as private sector development, knowledge solutions, and development of advanced infrastructure as the country transforms into an upper-middle-income country.

Sri Lanka has emerged in recent years as one of the most dynamic countries in South Asia. With a rich cultural heritage, an increasingly sophisticated work force, and a strategic location that links Asia to Europe, the country is well positioned for strong economic growth for years to come. Sri Lanka has moved beyond being a place to find low-cost labor to manufacture goods for export. The country achieved middle-income status in the mid-2000s and could become an upper middle-income country in a few years. This steady march out of poverty puts Sri Lanka in an enviable position, but also creates challenges for the country. Sri Lanka can no longer compete as effectively with low-cost labor countries. Therefore, it must develop expertise, products, and services, and increase the productivity of workers to compete with the world’s