‘Strong policy direction, needed for economic growth’ | Sunday Observer

‘Strong policy direction, needed for economic growth’

11 December, 2016
Prof. Premachandra Athukorala

Sri Lanka’s prospects are bright and not bleak and its sound human capital base can outdo Vietnam in 10 years time, Prof. Premachandra Athukorala of the Australian National University (ANU) told guests at a ceremony organised by the Institute of Policy Studies (IPS ) to felicitate him last week.

He said Sri Lanka’s human capital base is better than many countries in the region. “Our workers are easily trainable compared to many countries. However, a lack of policy direction and uncertainty in the political arena are obstacles to get to the next stage of economic growth,” Prof. Athukorala said.

He said despite challenges, Sri Lanka has leading industries such as the apparel industry which produces quality products for the world market.

He said there is ample scope for growth in the major industries such as apparels which exports less than 10 percent of world trade.

Central Bank Governor Dr. Indrajit Coomaraswamy while acknowledging the immense contribution Prof. Athukorala made to international trade and to develop an export strategy for Sri Lanka said the country has not made use of his wisdom in policy making and driving economic growth through trade.

“Sri Lanka needs to find ways to plug into the regional and global value chain instead of being fixated with value-addition. We need to have a thrust to increase export earning rather than be hung up on value-addition,” Dr. Coomaraswamy said.

However, he said, the country is moving in the direction Prof. Athukorala has focused on.

“Globalisation has pulled millions out of poverty but it has also created inequality. The steep rise in inequality has lot to do with the global financial crisis than globalisation. Global commodity prices have exacerbated inequality,” he said.

Introducing the Prof. Athukorala felicitation volume: ‘Managing Globalisation in the Asia Century’, Prof. Hall Hill of the Australian National University, Canberra said, Prof. Athukorala is well-known for his work on global production networks and added that his collegiality, curiosity, cooperative spirit had a profound impact on those whom he knew.

In his key note address on ‘Where are the South East Asian Economics Heading?’ Prof. Hill said Sri Lanka could learn from the success stories of South East Asian economies.

“Managing export oriented industrialisation with FDIs, participation in global production networks, maintaining sound macro economic management, resilience and recovery from deep crises and managing a sudden transition from authoritarian to democratic rule while maintaining growth, are some areas where South East Asian economies have displayed strength,” Prof. Hill said.

IPS, Director General Dr. Saman Kelegama said the topic dwelt on by Prof. Hill is vital in the context of Sri Lanka’s current global outreach and development strategy. Sri Lanka is increasingly losing interest in SAARC and is now focused on the Bay of Bengal region for a free trade area.

“Sri Lanka is currently a member of BIMSTEC that includes Myanmar and Thailand in Southeast Asia in addition to five SAARC countries. Vietnam another country that inspires Sri Lanka - underwent a similar experience of war and came out of it remarkably well. Vietnam and Sri Lanka were on par in exports in 1990 but today Vietnam exports 13 times more than Sri Lanka,” Dr. Kelegama said.