IMF Representative bemoans restrictive trade regulations | Sunday Observer

IMF Representative bemoans restrictive trade regulations

Dr. Eteri Kvintradze
Dr. Eteri Kvintradze

Sri Lanka’s export structure has been static for years, reflecting a lack of competitive forces to drive trade dynamism, innovation, and diversification, said Resident Representative of the International Monetary Fund in Colombo, Dr. Eteri Kvintradze.

Noting that Sri Lanka needs to do away with the more restrictive rules and regulations in terms of FDIs and trade and export procedures, she highlighted the need to create a more open and a less regulated environment to facilitate trade and investment activities.

“Sri Lanka’s export structure has been frozen over the years while its East Asian neighbours have moved very fast in terms of export diversification and export value chain. There is no space for innovation to enable competition,” she told an economic forum organised by the Sri Lanka’s Ceylon Chamber of Commerce in Colombo on Thursday.

She also said that Sri Lanka needs to maintain its fiscal consolidation and other key reforms agenda in a consistent manner to cushion both internal and external economic vulnerabilities and also to boost investor confidence.

“Sri Lanka knows where it is going; it has set out very ambitious targets to position itself as a regional and global hub for trade. It also knows how to get there. However, it will depend on how these reforms are implemented and efforts and ability of the government and private sector as well as civil society of this country to go ahead with those reforms,” she said.

She also said energy price reform is a key initiative taken by the government and stressed that necessary steps should also be taken to contain fiscal cost of state owned enterprises, while taking measures to transform these institutes into profit making organizations in the future.

In addition, she pointed out that current account deficit, low reserves position and high debt repayment requirements are major vulnerabilities faced by Sri Lanka at the moment.

However she said further that central banks’ flexible inflation targeting and exchange rate regime will improve country’s external reserve cover to a great extent .

She said Sri Lanka’s three-year reform program with IMF-the extended Fund Facility has made considerable progress so far.