Sri Lanka needs to untap USD 10 Bn export potential – WB

Sri Lanka has at least about USD10 billion untapped export potential, opined World Bank Group Country Manager for Sri Lanka and Maldives Gevorg Sargsyan addressing the launch of the World Bank’s bi-annual report in Colombo yesterday.

The Country Manager emphasized that several things needed to be done to untap this potential. Bringing more investments is one step. For investments, removing red tapes and making more level playing fuel for domestic and foreign investments is critical. Sustaining reforms will be an absolutely critical part of Sri Lanka moving forward and realising this potential. Sargsyan expressed optimism that the new leadership of the country and all stakeholders will come together and make sure that the policy momentum is maintained, which will help the country start moving in the direction it deserves to be. He also said that Sri Lanka has recovered faster than expected after a painful economic crisis. However the country has a poverty rate of around 25 percent.

“Women’s participation is an upbeat challenge for Sri Lanka. Migration, brain drain, female participation has been falling in Sri Lanka. There is a relatively narrow path forward. Unfortunately, there is no magic or silhouette to build it. It is going to be a hard work and consistent approach to policies,” said Sargsyan.

World Bank Senior Country Economist for Sri Lanka and Maldives Richard Walker stressed that it is necessary to prepare the domestic industries and businesses ready for more competition, which is another hurdle to untap the 10 billion dollars of exports. Companies and firms that are not as competitive may struggle against foreign competition. Those need to be transitioned and support provided in that respect. Answering a question raised on strengthening Sri Lanka’s economy without falling into a crisis future, Walker replied, “The reforms are to avoid another crisis. But of course, these policy consistencies are the first goal. Fiscal adjustment and monetary policy, financial sector policy is a lot of what’s happened to be put in place that has contributed to the stabilization. It is important to continue with those policies. Of course, overtime there may be adjustments to quit, but you need to ensure stability in that consistency is important.”

The Sri Lanka Development Update is a companion piece to the South Asia Development Update, a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges faced by countries in this region.

“No negative impact on growth forecast due to twin elections”

THUSHAN JAYASURIYA

World Bank Country Economist for Sri Lanka Shruti Lakhtakia said that the twin impact of the Presidential and General elections would not have a negative impact on their growth forecast for the Sri Lanka economy.

According to the World Bank ‘higher frequency indicators’ elections would not make much of a big impact she said. The World Bank predicts that Sri Lanka’s economy has stabilized, with growth expected to reach 4.4% in 2024, surpassing earlier forecasts. It was also disclosed that the October 2024 edition, Women, Jobs, and Growth, projects growth of 6.4 percent in South Asia this year, making it the fastest-growing EMDE region in the world.

Increasing women’s participation in the labor force and opening further to global trade and investment could help the region grow even faster and achieve its development goals, says the World Bank’s regional outlook.