Inward looking policies hinder country’s forward march - PM | Sunday Observer

Inward looking policies hinder country’s forward march - PM

22 September, 2019
Prime Minister Ranil  Wickremesinghe.  Pic: Hirantha Gunathilake
Prime Minister Ranil Wickremesinghe. Pic: Hirantha Gunathilake

The Indian Ocean is increasingly becoming important for Sri Lanka which we need to keep our foot in and this is why I am promoting the freedom of navigation, Prime Minister Ranil Wickremesinghe told the 19th Sri Lanka Economic Summit last week.

The Indian Ocean provides the major sea routes connecting the Middle East, Africa, and East Asia with Europe and the Americas. Projections suggest that the Indian Ocean economy will likely account for over 20% of global GDP by 2025 and its GDP per capita is expected to almost double to $6,150.

He urged the business community to take a look at the global economy and the shift towards Asia.

The Prime Minister said that if the country needs to see exponential growth it has to make a clean break from inward looking policies and recalibrate the economy and move forward.

However, economists believe realising this regional outlook will depend on tackling several pressing policy challenges such as improving port quality and logistics, lowering barriers to trade and investment, narrowing development gaps, strengthening regional economic governance and mitigating geopolitical tensions.

“We need to have a real system not designed for a low income economy. A radical restructuring is needed and the government machinery has to be re-modeled. The public sector has to be restructured to be delivery oriented with competent faces,” the Premier said. He said decline in trade, national rivalry and debt are adding on. We have to consider the Brexit issue as UK is impartant for Sri Lanka. A no deal Brexit will affect the people who are important to us. The next issue is the shit of global economy to Asia. The world is looking at over three percent growth in 2020. India is at 7.2 percent down from a bit higher growth rate and China is down from seven percent to six percent while ASEAN economies are doing well.

“What are we today? We are an upper middle income country. We have two options to look at. One is do we want to stagnate in middle income trap as many economies like to do or have a leap frog trajectory to be a high income country. We have prepared the country for that and the framework presented by the Ceylon Chamber of Commerce will help achieve these goals,” the Premier said.

He said that he always believed in a leapfrog trajectory to develop the economy. The Easter bombs slowed down the pace of economic growth and everyone said we must go home but by August and September tourist arrivals started to recover faster than expected. “Somehow we were able to do that and people are surprised how we did that. We had Prime Minister Modi coming and then 28,000 of the Bohra community visiting us.

“We have to carry this forward but if we are to focus on a leap frog trajectory we need to do things differently and not be doing the same things we have been doing. We need to take a clean break from the way we did things in the past and this is where the accelerated program of the chamber will come handy to fast track economic growth,” the premier said. He said the country should not allow debt to increase but rather create an investment and business climate in the country. We must encourage private investments and shift to knowledge and skills enhancing investments.

“We have entered into Free Trade Agreements, one with the GSP Plus and the other with India which we are building on. We are looking at FTAs with Indonesia, Malaysia, Thailand and if possible one with Japan which is where the money is. So let’s go there but free trade should be for all. If we are going to be an advanced economy we need to be a highly competitive economy by joining the global value chain,” the Premier said.