Sri Lanka’s economy to move towards an outward oriented, private sector-led and knowledge intensive model
Sri Lanka’s Minister of Development Strategies and International Trade Malik Samarawickrama has reportedly said that the government was committed on rebalancing Sri Lanka’s economy and converting it to a more outward oriented, private sector-led and knowledge intensive model.
The Minister has made this observation at the launch of the five year National Export Strategy (NES) in Colombo last week.
“The focus has been to rebalance Sri Lanka’s economic model from one over-reliant on government investment and public infrastructure to a model that is more outward oriented, private sector-led and knowledge intensive.
“This is necessary to attract transformative FDI that produces goods higher up the global value chain,” Samarawickrama has said.
The Minister has noted that the transition will be challenging.
“But is the only option for Sri Lanka if we are to create better jobs for our young people and make a sustainable transition into a higher income economy.”
“Inward-looking, protectionist trade policies have not brought the results that we seek,” Samarawickrama has said.
In 2017, Sri Lanka recorded its highest annual export earnings of US$ 15.5 billion and is expected to record US$ 17.2 billion this year.
FDIs were recorded at US$ 1.9 billion in 2017, and is forecast to reach US$ 2.5 billion this year.
“These numbers suggest that we are a long way off from where we want to be as a country,” Samarawickrama has said.
The annual export earnings of Singapore is around US$ 480 billion, Taiwan’s is US$ 340 billion and Malaysia’s is US$ 250 billion.
“Even Bangladesh a much later entrant is at US$ 41 billion,” Samarawickrama has said.
In terms of FDIs, Singapore attracts about US$ 77 billion a year, Vietnam US$ 12 billion and Taiwan US$ 9 billion.
“If we only concentrate on a domestic market of 21 million people, we will never be able to achieve the rapid economic growth we aspire to,” Samarawickrama has added.
OSL take:
Since the Sri Lankan government is looking at converting Sri Lanka’s economy into a more private sector driven and knowledge intensive model, there has been an expansion in the investment opportunities for foreign businesses/investors. Sri Lanka has recorded an increase in the number of FDIs that have entered the country in the past few years and is positive on further increasing the numbers. The economic policies of the Sri Lankan government to push for private sector drives in the economy would result in an increase in the FDIs received by the country.
| Article Code : | VBS/AT/20180725/Z_2 |