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LKI’s Executive Director, Dr. Ganeshan Wignaraja, recently spoke on ‘Trade Liberalisation in Sri Lanka: Then and Now,’ at the Sri Lanka Economic Association (SLEA) 33rd Anniversary Annual Sessions, on 19 January 2019. In his presentation, Dr. Wignaraja noted that while the 1977 economic reforms allowed Sri Lanka to expand manufactured exports, particularly in ready-made garments, there was little industrial upgrading and diversification seen in East Asian success stories like Korea, Taiwan and Singapore. Nonetheless, even the partial opening to trade and foreign investment in Sri Lanka saw faster growth and poverty reduction than under the previous import substitution strategy.
He also suggested that a 30-year internal conflict, a lack of integrated outward-oriented policies à la East Asia, and a limited base of tertiary-level engineers partly explains Sri Lanka’s record since 1977. Fast forward to today, Sri Lanka has seen some success in terms of the rise of the service sector, a shift in trade and investment towards the Asian markets, and a transition to low-middle income status. However, the country is plagued by rising income inequality, slow growth, and a simmering debt crisis. These challenges may continue for sometime as several global and internal risks are clouding the economic horizon in Sri Lanka.
Dr. Wignaraja argued that as the political dust settles, a national debate is needed on how to move on from the political crisis to an economic policy agenda for the next few years. He suggested that professional bodies like the SLEA as well as the universities can play an important role in educating the public on the hard economic policy choices ahead.
The theme of the sessions this year was ‘Impact of Globalisation on Sri Lankan Economy: Challenges and Opportunities.’ Other panelists included Deshamanya Professor Emeritus W. D. Lakshman, University of Colombo; and Dr. Sarath Rajapatirana, Economic Adviser to His Excellency the President of Sri Lanka and Official Participant in the Cabinet Committee on Economic Matters Chaired by the Prime Minister. The discussion was moderated by Dr. Nimal Sanderatne, Professor, Postgraduate Institute of Agriculture, University of Peradeniya.