Sri Lanka now stuck in the middle – Economist

3 June 2015 02:51 am - 0 - {{hitsCtrl.values.hits}}

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Sri Lanka has now reached an economic stage where the country can neither compete with the low cost producers nor can it match its productivity with that of its high productive, higher middle income countries such as Malaysia and Thailand, according to an eminent economist.
“Sri Lanka is stuck in limbo. They can’t compete with Bangladesh in cost or Malaysia and Thailand in productivity,” the Pathfinder Foundation Executive Director Dr. Indrajit Coomaraswamy said.
Therefore Dr. Coomaraswamy reminded that the upgrading of the country’s human resources becomes the top priority of the policy makers of the new government.
“The government’s job is to create a framework to release the creativity and productivity of people,” he said.
Developing a quality human resource pool is one of three most critical economic policy reforms that must be pursued by the new regime with the other two being the development of smart budgets and luring foreign investments.
There are three main areas of non-productivity in Sri Lanka – agricultural sector, State owned Enterprises (SoEs) and the State service.
The agricultural sector employs 30 percent of the workforce while contributing only 10 percent to the country’s GDP. SoEs continue to weigh on the tax payer as they have been making hefty losses.
Public sector labour force more than doubled to 1.4 million employees during the last decade with no improvement in the efficiency in delivery of service.
It was only recently the International Monetary Fund Resident Representative Dr. Eteri Kvintradze said the country’s hard infrastructure drive was fast phasing out, instead the government must re-shift their focus on building a soft infrastructure pool with high-end skills to drive economic growth.
Under the former United People’s Freedom Alliance government, post-war Sri Lanka had been investing on physical development on a massive scale financed by high cost commercial borrowings.
But the unity government which came in to power on January 08, this year, is trying to lure private investments to push through development, but lack of clarity on economic agenda is keeping the private sector in uncertainty.
Meanwhile The Pathfinder Foundation Senior Fellow Professor Sirimal Abeyratne
called for reforms in Sri Lanka’s University system in order to make the country more competitive in the global arena.
“We need to reform the universities because they are outdated. They have not been reformed since 1978,” he said.
Prof. Abeyratne, who is also an academic at the University of Colombo, said that universities must start producing graduates who will cater towards future economic trends.
(CW)

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Sri Lanka now stuck in the middle – Economist

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