📈 Sri Lanka Flood Risk: Urgency for Institutional Reform

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Following Cyclone Ditwah in late 2025—which caused an estimated US$ 4.1 Bn in direct damages (~4% of GDP)—Sri Lanka faces a critical need to transition from reactive disaster response to proactive risk management. • Economic Impact & Sectors Agriculture suffered US$ 814 Mn in losses, threatening food security and rural livelihoods. Physical infrastructure damage totaled US$ 1.74 Bn, disrupting apparel & textiles logistics and general commerce. The cyclone is expected to trim real GDP growth by 0.5%–0.7%. • Institutional Weaknesses Despite high technical competence in meteorology and hydrology, the absence of an empowered command structure leads to "decision paralysis." Current fragmented responsibility delays critical actions like pre-emptive reservoir water releases. • Proposed Strategic Shift • Command Structure: Establish a technically-led unit under the Ministry of Disaster Management with legal authority to regulate water levels before forecasted extremes. • Technical Integration: Leverage basin-scale modeling and university partnerships for "war-gaming" rainfall scenarios. • Urban Resilience: Prioritize drainage clearance and flood-plain regulations, which are more cost-effective than post-disaster relief. • Fiscal Outlook The government has allocated LKR 30 Bn for 2025 emergency needs, but total recovery costs could reach US$ 7 Bn. While fiscal buffers from a 2025 primary surplus (~Rs. 1.94 Tn) provide some relief, climate-induced risks remain a primary threat to long-term economic stability.

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