Harnessing AI for Inclusive Growth: S.T. Thanigaseelan on Sri Lanka’s Path to a Smarter Economy

Exclusive Interview with S.T. Thanigaseelan (S.T.S), Development Economist & Policy Strategist: “AI Can Add Up to 1.8% to Sri Lanka’s Annual GDP Growth by 2030—But Only If We Move Now”

As the world races towards an AI-driven future, Sri Lanka stands at a pivotal point where strategic adoption could either accelerate economic recovery or widen existing gaps. S.Thanigaseelan (S.T.S), speaks to us about the transformative impact of Artificial Intelligence on Sri Lanka’s economic landscape, highlighting both the opportunities and the pitfalls.

Q: How significant is the economic potential of AI for Sri Lanka’s long-term growth trajectory?

S.T.S: The economic potential of AI for Sri Lanka is profound—if it is guided by strategic policy alignment, targeted investment, and inclusive governance. Projections based on regional comparatives and World Bank modelling suggest that AI could contribute between 1.5% to 1.8% to Sri Lanka’s annual GDP growth rate by 2030, amounting to approximately $8 billion in cumulative economic value over the next five years. AI adoption could also catalyze productivity gains of 15–25% across key sectors such as agriculture, logistics, manufacturing, and public services. However, this growth will not be automatic—it requires deliberate action in building digital infrastructure, investing in human capital, and aligning our legal-regulatory frameworks with emerging technologies.

Q: What factors contribute to Sri Lanka’s unique position for accelerating large-scale AI adoption?

S.T.S: Sri Lanka, though smaller in scale, has a few unique structural advantages. Firstly, we have a well-educated, English-proficient workforce, with over 85% literacy and strong STEM participation at secondary levels. Secondly, public digital platforms such as Sri Lanka Government Network (SGN), eSamurdhi, and Aswesuma in customs already provide digital backbones that can be enhanced with AI applications. Third, Sri Lanka’s compact geography and centralized governance structure allow for faster nationwide policy rollouts compared to federated nations. If leveraged correctly, these attributes can help us scale pilot models in areas like AI-based public service delivery, digital health records, and AI-supported agriculture faster than many of our South Asian counterparts.

Q: Given the potential impact of AI on the job markets, what steps can Sri Lanka take to address this issue?

S.T.S: AI will not only create jobs, it will also radically redefine them. The challenge is managing the transition. Studies from the International Labour Organization indicate that over 12% of jobs in Sri Lanka could face high risk of automation, especially in clerical, transport, and low-end manufacturing sectors. To respond, Sri Lanka must immediately prioritize a National Reskilling Strategy, aimed at training at least 250,000 workers in AI-adjacent skills by 2028. This includes digital data handling, robotic process management, AI-augmented healthcare, and ethical AI governance. Additionally, integrating AI awareness and coding into GCE A/L Technology and ICT streams would ensure future generations are workforce-ready. Social safety nets must also be modernized, offering portable benefits and financial incentives for continuous learning.

Q: In Sri Lanka, there is a stark variation in internet penetration. The penetration of AI also varies across different sectors. How can Sri Lanka ensure inclusive AI development and global competitiveness compared to nations like the US and China?

S.T.S: This is a critical concern. Urban areas enjoy over 60% internet penetration, while remote rural and plantation regions often fall below 25%. Similarly, AI is being explored in finance and retail, but is almost absent in primary sectors like agriculture and fisheries. For Sri Lanka to ensure inclusive development, we must adopt a “Digital Equity First” model, which begins by investing in broadband expansion, especially fibre-to-village and 5G coverage in rural zones, funded through universal service obligations and donor partnerships. Simultaneously, we must implement Sector-Specific AI Missions, modeled on India’s NITI Aayog approach, that drive AI use in inclusive sectors—like AI for farmers, AI for health outreach, and AI for disaster resilience. Competing with global giants like the US and China is less about volume and more about niche leadership—we must aim to be a regional innovator in ethical, low-resource AI solutions, especially in climate adaptation and human-centered public services.

Q: Which sectors are poised to gain the most from the AI boom in Sri Lanka?

S.T.S: Five sectors stand out for AI-enabled transformation. First, agriculture, which still employs over 25% of the workforce, can benefit from AI-driven tools in pest forecasting, crop yield modelling, and smart irrigation. If fully adopted, this could increase sector productivity by 20%, adding $400–500 million to national output annually. Second, healthcare, where AI can support rural diagnostics, medical imaging, and teleconsultations—especially vital in our ageing society. Third, logistics and port services, where AI can streamline customs, fleet tracking, and predictive maintenance, improving export competitiveness. Fourth, financial services, especially microfinance and insurance, can use AI for risk scoring and fraud detection. Lastly, education, through AI-enhanced personalized learning and digital language tools, can close equity gaps and expand access, particularly in Tamil-speaking regions.

Q: Despite the government’s support, what are the key roadblocks that could slow AI adoption in Sri Lanka?

S.T.S: While policy signals have been positive—such as the “Digital Sri Lanka” initiative and support for tech hubs—the execution faces six major hurdles. First, fragmented data governance—we lack clear data protection laws, open data policies, and public-private data sharing frameworks. Second, talent drain and skills mismatch—only about 6,500 professionals are trained in AI or ML nationally, and many migrate abroad. Third, public mistrust and lack of awareness around AI’s role in society and employment. Fourth, insufficient R&D investment, currently less than 0.1% of GDP, while nations like South Korea invest over 4%. Fifth, bureaucratic inertia, where outdated procurement rules and siloed decision-making slow down public sector innovation. And finally, digital divides, particularly in estate, Northern, and Eastern regions, where connectivity and capacity gaps risk leaving entire communities behind.