Sri Lanka will need to establish an overall policy package to restore country’s initial and original open economy regime to better garner benefits in multiple areas particularity to make progress in terms of international trade, said Sirimal Abeyratne, Prof. in Economics, University of Colombo.
He said over the years, a number of distortions have been introduced into the open economy, as a result of that; Sri Lanka has not been able to make progress in terms of international trade. Noting that Sri Lanka is left with limited options to face any burning issues on the economic front, Prof. Abeyratne cited enforcing and restoring rule of law and improving the public sector efficiency as two main fundamental cornerstones in which the open economy functions.
“It is essential to enforce the rule of law in the country to have enough rules and regulations to make sure everyone is equal before the law.”
He also stressed the need to enhance the effectiveness of the public sector role in the economy.
“Today exchange rate has become weaker and is vulnerable to external shocks. I believe our biggest problem is to correct our economic fundamentals and trade activities to avert any foreseeable negative impacts,” he said. The Professor said further that the government needs to do away with protective and prohibitive tariff regime to attract foreign investments and to improve international trade.
“Also, we’re not quoting industries that have flourished without the government interventions and at the same time, we don’t quote unsuccessful stories that have happened with the government intervention. In numbers, they are bigger than the success stories,” he said.
Prof. Abeyratne also added that country will end up in a worst situation if unnecessary taxes were removed and the trade fully liberalized.
There are many other areas that the government can correct along with that, he said.
Speaking at the event, Rohan Samarajiva, Chairman of Information and Communication Technology Agency of Sri Lanka said that telecom enables greater productivity in all other sectors including logistics.
He said the logistics sector enables greater productivity in rest of the economy and the liberalization of logistics sector is likely to yield benefits in the form of value for money, greater responsiveness to customers and new products.
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