Sri Lanka’s digital ambitions clash with stalled human development

From left: Digital Economy Ministry Acting Secretary Waruna Sri Dhanapala, Central Bank Governor Dr. P. Nandalal Weerasinghe, Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe, Chief Adviser to the President on Digital Economy Dr. Hans Wijayasuriya, UNDP in Sri Lanka Resident Representative Azusa Kubota, Digital Economy Deputy Minister Eranga Weeraratne, Science and Technology Minister Prof. Chrishantha Abeysena and Strategic Engagement, Digital and Innovation, UNDP Sri Lanka Team Leader Fadhil Bakeer Markar at the launch of 2025 UNDP Human Development Report in Colombo – Pix by Ruwan Walpola

From left: Dialog Axiata Group Chief Analytics and AI Officer Dr. Romesh Ranawana, OCTAVE - John Keells Group Consultant Principal Data Scientist Dr. Radheeka Abeyweera, WSO2 Chief Architect 

Dr. Srinath Perera, Pyxeda AI/Lead on AI clubs in Sri Lanka CEO and Founder and Dr. Nisha Talagala and moderater Dialog Finance PLC Chief Data and Analytics Officer Yasith Fernando

•  UNDP’s report underlines global HDI growth at slowest pace in decades
• World may also be decades away from achieving its 2030 development goals
• Sri Lanka ranks 89 globally and second in South Asia, but progress has stalled
• UNDP Sri Lanka Resident Representative Azusa Kubota says HDR’s findings were wake-up call
• HDI peaked at 0.78 in 2018 and slipped slightly to 0.776 in 2023
• Inequality increases for fourth consecutive year
• Gender Inequality Index has worsened, dropping from 122 in 2024 to 93 in 2025
• Other South Asian countries, like Maldives, closing gap with Sri Lanka
• Digital Economy Deputy Minister Eranga Weeraratne says AI is strategic tool to revive momentum
• UNDP calls for human-centred approach where people, equity, and inclusion must be core to AI adoption 
• Emphasises combining AI with human intelligence to boost innovation and recovery

By Divya Thotawatte

Digital Economy Deputy Minister Eranga Weeraratne

UNDP Sri Lanka Resident Representative Azusa Kubota

Chief Adviser to the President on Digital Economy Dr. Hans Wijayasuriya

UNDP Strategic Engagement, Digital and Innovation Team Leader Fadhil Bakeer Markar

Despite Sri Lanka’s resilient digital position within South Asia, the country’s progress has stalled, according to the 2025 United Nations Development Programme (UNDP) Human Development Report (HDR), which highlights artificial intelligence (AI) as a new hope for growth and recovery.

This year’s report, titled ‘A Matter of Choice: People and Possibilities in the Age of AI,’ explores AI’s transformative impact on human development. It emphasises that the choices societies make in their design, governance, and application will determine whether the technology becomes a catalyst for empowerment or a driver of exclusion.

The report underlines that globally, the Human Development Index (HDI) is growing at its slowest pace in decades. It warns that the world may be decades away from achieving the levels of the human development goals set for 2030. While South Asia recorded a 4.8% rise in the HDR in 2022, rebounding strongly after the pandemic, Sri Lanka is yet to recover from its compounding shocks from the 2019 Easter attacks, the pandemic, and the economic crisis that followed in 2022.

While Sri Lanka still ranks second in South Asia, closely following Iran, it has seen a marginal decline in the HDI over the past few years. However, other countries in the region, especially the Maldives, have continued to improve, narrowing the gap with Sri Lanka.

Globally, the HDI had also shown steady improvement and a decline in inequality for over 30 years until the crisis of 2020-2021 disrupted this trajectory. Although last year’s report had hinted at recovery, the 2025 HDR has dashed this optimism. Inequality has increased for the fourth consecutive year, with the lowest ranked countries falling even further behind. Sri Lanka, ranked 89 in the HDI, had also seen its Gender Inequality Index worsen significantly, slipping from 122 in 2024 to 93 this year.

Speaking at the launch of the 2025 HDR, UNDP Strategic Engagement, Digital and Innovation Team Leader Fadhil Bakeer Markar also noted that Sri Lanka’s HDI had peaked at 0.78 in 2018 and has since slipped slightly to 0.776 in 2023, signalling that progress has slowed, even with technology accelerating.

“But there are positives here. The decline has been actually slow. Our human capital has the potential, our digital ambition is high and we have a highly resilient nation. But the fact remains that we have not fully recovered.”

He advised that Sri Lanka’s path of recovery was to utilise AI to enhance human intelligence, combining the strengths of people with AI to boost innovation and creativity. Sri Lanka must also accelerate human development achievements to get its trajectory back on track.

“As the report says, Sri Lanka today, with its digital ambition and the potential we have, can focus on building a complementary economic guide. Innovation with intent. We can invest in the right skills and create a space where people have the freedom and power to shape their future with AI.”

Government bets on AI for digital economy targets

Addressing the points made in the report, Digital Economy Deputy Minister Eranga Weeraratne said that the country had chosen not to retreat in the face of global setbacks. Instead, it would rise from its position. 

He explained that AI was a strategic tool to power this goal.

“With AI, we have a chance to reignite that momentum if we choose wisely. This is the time to make deliberate choices in how we govern and apply this transformative technology. AI is no longer an option. It can empower or it can exclude… we want Sri Lanka to be ready.”

Weeraratne said that AI, if adopted strategically, could become the “engine for the next generation of jobs,” creating new industries, services, and careers. Sri Lanka’s AI strategy supports six national priorities: trusted data, talent, digital public infrastructure, public value pilots, private sector innovation, and ethics and security.

These priorities were already in motion, he noted, highlighting ongoing initiatives such as Gamata Sanvidanaya, which delivers 4G and satellite broadband to rural villages, and the National School Connectivity Program.

“This is not just about technology, it is about people. It is about ensuring no community, no woman, no person with a disability, or an elderly citizen is left behind.”

He emphasised that in this global environment, AI was at the core of the Government’s ambitious goal of building a $ 15 billion digital economy by 2030.

AI and human-centred growth

UNDP Sri Lanka Resident Representative Azusa Kubota said that the HDR’s findings were a wake-up call, especially for countries like Sri Lanka navigating a post-crisis recovery. She urged: “The report warns us that if the sluggish recovery of 2024 hardens into a long-term trend, the world may miss the 2030 development milestone by decades, not years.”

Still, the report also showed signs of optimism. A global survey found that nearly 70% of people believed AI would improve their productivity, with two-thirds expecting to engage with AI in education, health, or work within the next year.

AI was not a mere distant disruptor anymore, but an active presence already shaping how we live, work, learn and govern, Kubota stressed, calling for a human-centred approach to AI. An approach that upheld unity, advanced equity, and placed people at the heart of development was necessary.

“The digital divide is no longer just about device or Iinternet access. It is about whether people have the capacity, confidence, and opportunity to use new technologies to improve their lives. This means expanding access to knowledge, to platforms that enable innovation, and to institutions that can translate digital potential into inclusive growth.”

The launch of the 2025 HDR was co-hosted by the Digital Economy Ministry and UNDP Sri Lanka, with the participation of Digital Economy Deputy Minister Eranga Weeraratne, Chief Adviser to President on Digital Economy Dr. Hans Wijayasuriya, Digital Economy Ministry Acting Secretary Waruna Sri Dhanapala, and UNDP Sri Lanka Resident Representative Azusa Kubota, among other high-level dignitaries.

It also included a panel discussion themed ‘AI in Action – Impact Driven Adoption,’ featuring Dialog Axiata Group Chief Analytics and AI Officer Dr. Romesh Ranawana, AIClub Founder and CEO Dr. Nisha Talagala, OCTAVE – John Keells Group Consultant Principal Data Scientist Dr. Radheeka Abeyweera, and WSO2 Chief Architect Dr. Srinath Perera. The panel was moderated by Dialog Finance Chief Data and Analytics Officer Yasith Fernando.

The event served as a platform for a multi-stakeholder dialogue, bringing together over 200 participants from the government, development partners, UN agencies, the private sector, academia and civil society.

Since late 2023, the UNDP has partnered with the Digital Economy Ministry and is continuing its support provided to the previous Committee on Formulating the Strategy on AI to support the formulation of Sri Lanka’s first national AI strategy. This collaboration has involved technical assistance, policy advisory support, and facilitation of dialogue among international and local experts.

The strategy, informed by both global best practices and national development priorities, is designed to be inclusive, forward-looking, and tailored to the unique needs of Sri Lanka.

Throughout this process, the UNDP provided sustained support to ensure the strategy is firmly anchored in human development principles, promoting both equity and innovation at its core.