Sri Lanka’s Finance Minister calls for a shift towards higher value agriculture and improving competitiveness of the economy
Finance Minister of Sri Lanka Mangala Samaraweera has reportedly noted that Sri Lankan farmers should shift towards higher value agriculture in order to avoid being trapped in low-wage subsistence farming.
The Minister has made this observation at the CEO’s Forum 2018.
“This entails improving the competitiveness of the economy, so that output per employee is higher, and this would be reflected in higher real wages,” he has said.
To drive competitiveness, economic resources must be diverted into activities that optimize output per worker, the Minister has noted.
“This requires a shift of economic activity into sectors where Sri Lanka is globally competitive and move out of sectors where we cannot compete.”
According to Samaraweera, about 30% of the labour force accounts for only around 9% of GDP in agriculture.
“By ‘protecting’ uncompetitive agriculture, we are in effect trapping farmers in low wage economic activity,” the Minister has reportedly said.
“It is clear that we need to gradually shift into higher value agriculture in order to improve output per farmer, and thus income per farmer,” he has said, adding that to get there Sri Lanka needs investment and technology – both foreign direct investment and domestic private investment.
“This same principle applies to all economic sectors; many of which are uncompetitive but have been protected, stifling competition, innovation, and real wage growth, whilst imposing high costs of protection on consumers,” Samaraweera has reportedly said.
He has further noted that the government has embarked on a shift in the economic trajectory of Sri Lanka from a protected domestic market driven economy, to a more outward oriented economy.
“The future of our economic growth must be through exports, entrepreneurship, FDI, and private enterprise,” Samaraweera has observed.
The statement by Sri Lanka’s Finance Minister of the future of the country’s economic growth being in the areas of exports, entrepreneurship, foreign direct investments and private enterprise is an indication of the opening up of a vast number of investment opportunities in Sri Lanka. The move towards higher value agriculture along with such a shift in other sectors as well would expand opportunities for foreign businesses to engage in Sri Lanka’s economy. Therefore, it is an opportune time for foreign businesses to venture into Sri Lanka.
|Article Code :||VBS/AT/06092018/Z_3|