9 October 2017 08:16 am
Against the background of a progressive improvement in the macroeconomic environment, led by better fiscal policy outcomes, Sri Lanka needs to urgently address the structural constraints through a process of reforms, if the country is to raise its medium-term growth prospects, Sri Lanka’s leading economic policy think tank, the Institute of Policy Studies (IPS) pointed out recently.
In its annual flagship report, ‘Sri Lanka: State of the Economy 2017’, a primary constraint on growth is identified as the nation’s inadequate human resource pool of professional and technical skills. It notes that Sri Lanka’s labour market efficiency has to be improved by tackling two of the biggest limitations – its stringent employment protection laws and low female labour force participation rates.
As such, the report, which will be launched on October 10 at the Dr. Saman Kelegama Auditorium, focuses on ‘Demographics, Labour Markets and Growth’ as its main thematic area.
The other areas of policy priority to revive Sri Lanka’s medium-term growth outlook from the current rate of 4.0-4.5 percent highlighted in the report include education, health and human development, agriculture and land resource management, tourism, migration and climate adaption and disaster resilience.
As the report aptly points out, the implementation of reforms will depend on persuading government coalition partners that economic reform initiatives are designed with sufficient reference to the concerns of ordinary voters. If political indecision makes a reform effort less achievable, the evidence will begin to confirm that the probability of a sustained upswing for the Sri Lankan economy is dim. In view of the daunting medium-term debt financing challenges that Sri Lanka must prepare to meet, the country cannot afford to lose this opportunity to put its economic house in order.
‘Sri Lanka: State of the Economy 2017’, the flagship publication of the IPS, can be purchased from the Publications Unit of the IPS, located at No: 100/20, Independence Avenue, Colombo 7. For more information, contact the Publications Unit on 0112143107/0112143100 or email amesh@ips.lk.