What is Regional Development

Regional development is the provision of aid and other assistance to regions which are
less economically developed. Regional development may be domestic or international in nature. The
implications and scope of regional development may therefore vary in accordance with the definition
of a region, and how the region and its boundaries are perceived internally and externally.

Countries need competitive dynamic regions to achieve their economic, social and environmental
objectives. Regional development policies complement national macroeconomic and structural
policies.

WHAT IS REGIONAL DEVELOPMENT?

Regional development is a broad term but can be seen as a general effort to reduce regional
disparities by supporting (employment and wealth-generating) economic activities in regions. In the
past, regional development policy tended to try to achieve these objectives by means of large-scale
infrastructure development and by attracting inward investment.
Past policies have failed to reduce regional disparities significantly and have not been able to help
individual lagging regions to catch up, despite the allocation of significant public funding. The result is
under-used economic potential and weakened social cohesion.

THE REGIONAL DEVELOPMENT POLICY COMMITTEE

The Regional Development Policy Committee (RDPC) was created in 1999 with the goal of identifying
the nature of territorial challenges and assisting governments in the assessment and improvement of
their territorial policies. Through its mandate today, the Committee aims to serve as the premier
international forum for senior-level policy makers to identify, discuss, develop, and disseminate a
vision of regional development policy that is place-based, multi-level, multi-sectoral, evidence-based
and innovative.
The Committee also seeks to enhance well-being and living standards in all region types, from cities
to rural areas, and improve their contribution to national performance and more inclusive and resilient
societies. To this aim, the Committee promotes the design and implementation of policies that are
adapted to the relevant territorial scales or geographies, and that focus on the main factors that:
 sustain competitive advantages;
 generate stronger, fairer and liveable regional economies; and
 promote effective and innovative governance at all levels of government.

Related Documents
 Regional Development
 Rural Development
 Urban Development
 Regional Statistics and Indicators
 Regional Innovation
 Multi-level governance, subnational finance and investment
 OECD Water Governance Programme

Regions matter for innovation, and innovation matters for regions

Innovation is a source of growth and a tool for addressing global challenges like climate change and
social issues such as inequality. Regions are seeking to promote their economic development
increasingly through support to innovation. They define and implement strategies and policy
instruments to build on their strengths and to shift course.
However, a shared regional vision needs to be grounded in an analysis of regional strengths and
weaknesses. The core challenge for regional innovation policies is to ensure a favourable
environment for entrepreneurship and business growth to creat jobs.

Urban Development

URBAN POLICIES FOR AN INCREASINGLY URBAN WORLD

Urban issues are increasingly prominent on national policy agendas. Cities and metropolitan areas are major contributo
and play a key role as nodes in global markets. Moreover, at a time of deepening globalisation and increasing internatio
investment, metropolitan regions have become the targets of a wide range of public interventions. As a result, througho
development policies seek to address a range of issues – from managing urban expansion and congestion to fostering
social inclusion and environmental sustainability.

Understanding rural economies

Rural regions in OECD countries are important economically and demographically. They account for 75% of the
land and 25% of the population in OECD countries.

Increasing globalisation, improved communications and reduced transportation costs are also drivers of
economic change in rural areas.

OECD National Rural Policy Reviews assess the trends, strategies and the role of central governments in
increasing the potential of rural areas.

Multi-level governance, subnational finance and investment

Subnational governance and finance matter for regional development

At the global level, subnational governments are key economic and social players. They represent on average in the OECD:
 40% of public expenditure
 63% of total public staff expenditure
 59% of public investment
 32% of public tax revenue
 20% of public debt
The OECD is the leading international forum on multi-level governance, identifying policy options and recommendations to strengthe
multi-level mechanisms for more effective and inclusive regional development policies.
In 2016, the OECD created the Multi-Level Governance Studies series, focusing on decentralisation reforms, public investment, mun
finance and territorial reforms.

1.
Seeks to better understand the issues and problems facing the regions because of the contemporary
economic and social changes, including the formulation of territorial policies accordingly. Learn more
in: The Challenges of Smart Specialization Strategies and the Role of Entrepreneurial Universities: A
New Competitive Paradigm
2.
Development is by definition a process by which a societal problem is to be solved by implementing a
systematic and well-defined change process. Regional development activities are always aimed at
addressing regional problems and issues through development interventions which are best carried
out at the regional level. It focuses on good practice in the support and promotion of wealth as part of
an integrated geographical approach, expressed at a regional scale involving regionalactors. Learn
more in: E-Learning Tool for Regional Development
3.
Results from the integration of the space variable in the thematic development that is connected to a
concrete spatial reference - the region. Learn more in: What are the Most Critical Factors for
Competitiveness of a Tourism Destination?
4.
It relates to programmes to uplift the people in a region in terms of their social, economic, cultural
and/or political level. Learn more in: Social Science Education and Outreach as a Tool for Regional
Development and Institutional Building: A Case Study in India
5.
Set of activities carried out in order to reduce social and economic inequalities between developed
and less developed regions. Learn more in: Building Smarter Cities through Social Entrepreneurship
6.
Set of activities carried out in order to reduce social and economic inequalities between developed
and less developed regions. Learn more in: Social Entrepreneurship: Does Institutional Environment
Make a Difference?
7.
The act, process, or result of actions to grow, expand, or bring a regional place to a more advanced
or effective state. Learn more in: Building Local Capacity via Scaleable Web-Based Services
8.
The process of a region to realize its economic, social and cultural goals within the collaboration of
the organizations and institutions of that region. Learn more in: The Impact of Entrepreneurial
Sustainable Universities in Regional Development
9.
A multidimensional concept related to the degree of access to diversifiable set of opportunities
available to the people of a region, which contributes to a satisfactory personal and professional
fulfilment and to improve quality of life. Learn more in: Entrepreneurship, Firm Internationalization and
Regional Development
10. The provision of aid or assistance to less economically prosperous areas.

Agency Functions

Regional Development

One of the agency functions of the Bank is the promotion of regional development
initiatives through coordination among all stakeholders, namely, the Government of
Sri Lanka (GOSL), financial institutions, foreign donors, other lending agencies and
beneficiaries with a view to improving economic conditions of low income groups
and reducing poverty. This is achieved through the formulation and execution of
cost effective credit delivery programs which include promotion of credit discipline
and inculcation of savings habits among rural communities and the dissemination of
information required for these development efforts to those communities.

Agency Functions

Regional Development

Regional Development Lending Programmes

The Central Bank on behalf of the Government acts as the apex agency to
implement the following donor funded and government funded lending programmes
for key economic sectors in the regions through Participating Financial Institutions
(PFIs) selected for the purpose.

Following programmes are implemented by the Regional Development Department

(RDD) of the Central Bank.

1. Agricultural, Fisheries & Livestock Sector

1.01 Second Perennial Crops Development Project Revolving Fund Loan Scheme
-

SPCDPRF

1.02 Tea Development Project Revolving Fund Loan Scheme - TDPRF

1.03 New Comprehensive Rural Credit Scheme - SARUSARA >>

1.04

Agro Livestock Development Loan Scheme - Abhivurdhini

1.05 Krushi Navodaya Loan Scheme

1.05 Special Loan Scheme for Agriculture Sector Development - Viskam

1.05 Post Tsunami Rehabilitation and Resource Management Programme -

PTCRRMP

2. Small and Medium Enterprise Sector

2.01 Sabaragamuwa Province Integrated Rural Development Project Revolving

Fund Loan Scheme (SPIRDPRF)

2.02 Post Tsunami Line of Credit - European Investment Bank ( EIB ) Contract B
Loan Scheme

2.03 Construction Sector Development Project - CSDP

2.04 Self Employment Promotion Initiative Loan Scheme - SEPI

2.05 Northern Province Development Special Loan scheme "Awakening North"

2.06 Eastern Province development Special Loan Scheme

2.07 Provincial Development Loan Scheme

2.08 Saubhagya Loan Scheme

3. Micro Finance Sector

3.01 Dry Zone Livelihood Support Partnership Programme

3.02 Small Holder Plantation Entrepreneurship Development Loan Scheme -

SPEnDP

3.03 Poverty Alleviation Micro Finance Project II - Prabodhini Loan Scheme

3.04 Poverty Alleviation Micro Finance Project Revolving Fund - PAMPRF

3.05 Small Farmers Landless Credit Scheme Project II – SFLCP

Welcome to Ministry of Regional Development

The Ministry of Regional Development was established by the extra ordinary

gazette notification no. 1958/72 published on 18th March 2016 as a new Cabinet
Ministry with the objective of facilitating and coordinating economic and social
development programs & projects. The Ministry will focus mainly on strengthening
of regional economy through establishing specified development projects in the
areas of tourism industry, Agro-Industries, and other industrial projects.

Background

The Ministry of Regional Development was established by the extra ordinary

gazette notification no.1958/72 published on 18th March 2016. The Ministry will
focus on strengthening of regional economy and aiming at establishing specified
development projects in the industry areas of Agro-Industries, Tourism Industries
and other Industries for the national economic development.

Regional development is an effort to reduce regional disparities by supporting

economic activities, creating employments and generating wealth in regions.
Regional development contributes to the national growth of socio - economic status
and competitiveness among the regions which leads to improve the standard of
living of the rural community.

Considering the per capita Gross National Income (GNI per capita) of Sri Lanka
which exceeds US$ … in the year …, Sri Lanka is considered a lower middle
income country. However, the figures obscure significant disparities between
geographical regions. A total of 8.9 % of the population is considered to be living
below the official poverty line (UNICEF). Considering the fact that, there is a felt
need of clear policies and development strategies which should be adapted to the
Regional Development efforts with close coordination of line ministries of the
central government, provincial councils, Department of national planning and
general treasury.

Regional Development
Main Activities

 Facilitate local and foreign investments.

 Infrastructure development activities.

 Livelihood development program.

 Approving proposals recommended by the Hon. Members of Parliament for

the 9 districts, on the funds allocated under the Decentralized Capital Budget
Programme (DCB).

Development Units

Development units are established with a view of facilitating and coordinating

development activities. These units are responsible for planning and execution of
selected programs and projects in keeping with the National Economic Priorities
and will ensure the following:

 All Development projects are in accordance with the national economic

development policies

 Avoid duplication of activities

 Impact on the regional economy

Our Functions

We provide assistance and advice from the initial stage up to the completion of the
projects and thereafter. In this process following activities will be undertaken by the
development units.

 Provide basic infrastructure as appropriate up to the site

 Liaise on with state and regional authorities in obtaining clearances and

other related services.
About The RDB

The beginnings of the Regional Development Bank (RDB) can be traced back to as
far as 1985 when district level banks under the category of Regional Rural
Development Banks were established. Later in 1997, seventeen such rural regional
development banks were merged into six provincial level banks, which functioned
as Rajarata, Ruhuna, Wayamba, Uva, Kandurata and Sabaragamuwa Development
Banks. In May 2010, these six banks were merged into one national level bank and
designated as the Pradheshiya Sanwardana Bank (Regional Development
Bank/RDB).

The Bank was established as a statutory body under the Pradheshiya Sanwardana
Bank Act No.41 of 2008. The 100% Government owned bank was set up with the
objective of improving the living standards of the rural masses by providing them
accessible and affordable credit facilities that in turn would contribute to strengthen
the rural economy. Originally based on the “barefoot banking concept,” the bank
strives to provide innovative yet simple financial services to those at the middle and
bottom of the income pyramid.

The bank is keen on empowering its’ customers in the micro, small and medium
scale industries, women as well as the agriculture, livestock and fisheries industries
who would in turn contribute towards the country’s economic development. Bank
has also taken steps to inculcate the savings habit amongst the rural people
providing higher returns on savings and fixed deposits, and encouraging school
children and minors to save.

The results have been most encouraging and today the bank is proud to have
established over 6 million loyal customer base and 268 service points and given
employment to 3000 plus staff members.
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 Goals & Strategies

Goals & Strategies

Goals

In achieving the stipulated goals and functions, the Ministry has identified the
following programs and activities that should be implemented.

 Incorporate and coordinate development plans and programs of districts

along with line Ministries, Central Government Agencies and Provincial
Councils.

 Attract local and foreign investors for development projects by providing

them with basic infrastructure facilities and necessary facilitation ensuring
these projects achieve the aspirations of the rural community.

 Review regional development policies, programs and projects and make

recommendations to the National Planners on regional development issues.

 Encourage sustainable soil conservation and soil rehabilitation which

protects the environment whilst maintaining higher productivity.

 Ensure large share of development benefits to rural community and

 contribute towards national socio-economic development efforts.

 Ensure all programs and projects are aligned with national policies.

 Ensure all programs and projects implemented are within the framework of
National Environmental Policies.

Strategies for Goal Achievement

 Integrate regional development concepts for planning strategies.

 Prepare plans, programs and projects to strengthen the regional economy.

 Coordinate and monitor development plans, programs and projects of the

central government, provincial and local authorities.

 Facilitate where necessary, the implementation of private sector investment

projects in accordance with the decision and guidelines of the National
Policy planners.

 Ensure environmental sustainability, social acceptability and economic

viability of all development projects.

 Coordinate the development efforts of public and private actors.

 Implement at least one project identified on Agro-Industries, Tourism

Industry or other Industry as appropriate per electorate in the nine districts
as per their resource profiles.

Sustainable Development in Sri Lanka

Sri Lanka's path to middle income status has been remarkable in several ways, with
consistently high GDP growth rates and enviable performance in education, health
and poverty reduction. The end of Sri Lanka's 26-year conflict led to a further
acceleration of economic growth, with real annual growth rates in GDP per capita
exceeding 7 percent from 2010 to 2012. But growth collapsed thereafter and has
remained at or below 4 percent for the last four years, slowing the rate of Sri
Lanka's overall development and leaving many parts of the country left behind. The
country's path to development must now change to sustain a convergence with high-
income countries.

The post-war boom was unsustainable because of the structure of growth itself,
which has been uniquely inward-oriented. Exports and export-oriented FDI have
been fairly stagnant over the last two decades, failing to keep pace with overall
growth and the growth of imports. As a result, Sri Lanka has run into recurring
balance of payments crises. At the same time, the country has faced a steadily
weakening ability to collect tax revenue, making it increasingly difficult to invest in
the public goods needed to stimulate sustainable and inclusive growth into the
future.

In January 2015, Sri Lanka elected a new government with a vision of promoting
sustainable development and reconciliation. As Sri Lanka's political institutions
undergo an important transformation, certain economic changes will also be
required to put growth on a more sustainable and more inclusive footing. The
Center for International Development at Harvard University is collaborating with
the Government of Sri Lanka through a grant by the Open Society Foundations
(OSF) to provide research support to help the country move toward this future.

The project has 3 key components:

Growth and Transformation

CID's Growth Lab is doing in-depth, tailored analysis of Sri Lanka's economy – to
diagnose what is constraining the country’s growth, identify the most fruitful areas
in which to diversify the economy, and identify what actionable reforms and
projects are required to achieve sustainable and inclusive growth. This applied
research and training is conducted mainly in collaboration with the Prime Minister’s
Office and the Ministry of Development Strategies and International Trade
(MODSIT).

Implementation
CID's Building State Capability Program is conducting action-research with
implementation teams drawn from across the Government of Sri Lanka, to develop
new ways to implement the reforms and projects necessary to achieve sustainable
and inclusive growth, and to foster new capabilities within the government. This
action-research and training is conducted in collaboration with MODSIT and other
agencies and ministries across the government.

Trade Development
CID's Growth Lab is also conducting research into ways to reform and improve Sri
Lanka’s trade policy and implementation of trade commitments, including
negotiation of partnerships and agreements to be able to achieve sustainable and
inclusive growth. This applied research and training is conducted mainly in
collaboration with MODSIT.

UNCRD, which was established in 1971 based on an agreement between the

Government of Japan and the United Nations, strives to promote sustainable
regional development in developing countries with a focus on development
planning and management in the context of globalization and decentralization
trends, and the growing concern towards global environmental issues and their
impacts.