Case Study: Strategic Recovery from Systemic Shock – Cyclone Ditwah and the Sri Lankan Dilemma written by Maxwell Ranasinghe.
Synopsis: This case presents the Sri Lankan government facing the aftermath of a devastating cyclone amid a pre-existing economic crisis. It challenges you to formulate a strategic, credible, and executable recovery plan that can mobilize diverse funding sources while ensuring accountability and long-term resilience. The core strategic dilemma is how to transform a humanitarian catastrophe into a managed, transparent, and investable portfolio of projects.
Part A: The Crisis – Cyclone Ditwah Hits a Vulnerable Nation
Date: December 5, 2025
Event: Extremely Severe Cyclonic Storm ‘Ditwah’ makes landfall in Eastern Sri Lanka, stalling for 36 hours and unleashing torrential rains across the Northern, Eastern, North-Central, and Central provinces.
Preliminary Impact Assessment (as of Dec 4, 2025):
Human Cost: Over 600 confirmed deaths, over 1,800 , and over 200 individuals missing. 412,000 people are displaced, with 125,000 in 850 overcrowded emergency shelters.
Infrastructure: 37 major irrigation tanks (anicuts) are breached, flooding vast agricultural basins. Many rural and municipal roads are damaged. Power and communication grids are down in three districts.
Housing & Livelihoods: An estimated 78,000 homes are fully or severely damaged. Over 160,000 hectares of standing paddy and seasonal crops are, tea and plantations destroyed, along with significant damage to fisheries infrastructure and livestock.
Macro-Economic Context: Sri Lanka is midway through a fragile economic recovery under an IMF Extended Fund Facility program. Public finances are strained, foreign reserves are low, and debt levels remain high. The government’s capacity for unilateral fiscal response is severely limited.
The Strategic Challenge for the Government:
How can the Government of Sri Lanka strategically architect a recovery process that:
1. Secures Immediate Relief for the affected population.
2. Mobilizes Substantial, Transparent Funding from diverse international and domestic sources without exacerbating debt distress.
3. Builds Back with Resilience, ensuring reconstructed infrastructure and systems can withstand future climate shocks.
4. Restores Credibility and Trust both domestically and with the international donor community, given past criticisms of opaque procurement and project implementation.
Part B: Learning from Global Precedents – Successes and Pitfalls
1. The Phased & Expert-Led Approach: The 2004 Indian Ocean Tsunami (Indonesia & Sri Lanka)
Strategy: Massive international aid influx was initially chaotic. Success emerged where expert-led, community-participatory planning was adopted. In Aceh, Indonesia, the BRR (Rehabilitation and Reconstruction Agency) was established as a dedicated, time-bound, and transparent task force, reporting directly to the President.
Outcome: Efficient channeling of ~$7 billion in aid. Key Lesson: A dedicated, expert-driven oversight body with high-level authority and clear sunset clauses can enhance coordination, reduce duplication, and build donor confidence.
Contrast in Sri Lanka (2004): Post-tsunami recovery was criticized for being politicized, lacking transparency, and having inequitable distribution, slowing rebuilding and eroding trust.
2. The Transparency & Technology Portal: Post-Earthquake Recovery in Nepal (2015)
Strategy: Facing concerns over aid mismanagement, the Government of Nepal, with support from the World Bank, launched the ‘Development Assistance Database System’ and later the ‘DRM Portal’. This publicly accessible platform mapped all recovery projects, funding commitments, implementing agencies, and geographical distribution.
Outcome: Increased accountability, reduced duplication, and empowered communities to track resources. Key Lesson: Proactive, real-time transparency is not just an anti-corruption tool but a strategic asset for attracting and retaining donors who demand visibility on their contributions.
3. Tapping into the “Loss and Damage” Agenda: Pakistan Floods 2022
Strategy: Following catastrophic floods, Pakistan strategically framed the disaster as a prime example of climate injustice, where a low-emission country suffered disproportionate loss. It aggressively lobbied at COP27 to make the newly established Loss and Damage Fund (now the Fund for Responding to Loss and Damage – FRLD) operational and relevant.
Outcome: Positioned Pakistan as a test case for the fund, securing pledges and shifting the narrative from pure charity to climate obligation. Key Lesson: Strategically aligning a national disaster with global climate finance mechanisms can unlock new, non-debt creating funding streams and garner diplomatic support.
4. The Pitfall of Fragmented, Ad-hoc Recovery: Cyclone Idai (Mozambique, 2019)
Strategy: (Lack thereof). The response, while generous, was fragmented among hundreds of NGOs and donors, with weak government coordination.
Outcome: Inconsistent rebuilding standards, duplication in some areas and neglect in others, and a failure to systematically build long-term resilience. Key Lesson: Without a strong, government-led strategic framework to coordinate all actors, recovery efforts remain inefficient and fail to transform vulnerability.
Part C: The Strategic Dilemma for Sri Lanka
The Cabinet is divided on the path forward:
The Expediency Group argues for using existing, but under-resourced, ministry channels to fast-track contracts and begin work, fearing delays in bureaucracy.
The Prudent Group insists that without a world-class, transparent strategic plan, Sri Lanka will not attract significant funding beyond basic humanitarian aid from a few partners. They warn that opaque, quick fixes will repeat past mistakes and fail to secure funding from multilateral banks, the FRLD, and Western donors.
Your Task as Strategic Advisors:
Draft a Strategic Recovery Framework for the President and Cabinet. Your framework must address the immediate need for action while constructing a credible, investable platform for comprehensive recovery. Consider the lessons from global precedents and the specific constraints of Sri Lanka.
Guiding Questions for Framework Development:
1. Governance & Credibility: What institutional structure should be created to oversee the entire recovery effort? How can it be designed to maximize efficiency, transparency, and donor confidence?
2. Resource Mobilization: Given the economic context, categorize potential funding sources (bilateral, multilateral, philanthropic, domestic, innovative). What specific “offer” or “project pipeline” must Sri Lanka present to each to be successful?
3. Execution & Accountability: How should the recovery be phased? What mechanisms can be put in place to ensure funds are used as intended and outcomes are achieved, thereby maintaining the flow of future funding?
4. From Recovery to Resilience: How can this recovery be strategically used to “build back better” and upgrade Sri Lanka’s climate resilience, turning a liability into a future asset?
Questions
1. Diagnosis (20 mins): What are the core strategic constraints Sri Lanka faces? (Financial, governance, time, trust).
2. Learning from Others (20 mins): Which precedent is most relevant for each constraint?
3. Framework Design (40 mins): In groups, have students draft their 2-page “Strategic Recovery Framework” addressing the Guiding Questions.
4. Presentation & Critique (20 mins): Discuss plans forwarded by different groups and finally syntheisze and expert Advisory Paper to forward it to the government.