SL remains too protectionist

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By 2017-10-19

By Kamal Kandewatta

Though there are many reasons to be optimistic about the country's future, there are still major challenges to achieving greater prosperity, pointed out the World Bank (WB).

According to the featured story by WB under the theme 'Vision 2025: Sri Lanka's Path to Prosperity', it has noted that "though there are various reasons, such as its people, natural endowments and its location beside big markets that offer many opportunities, the country still has challenges on the path to greater prosperity."

Among various factors the WB identified as challenges, the low competitiveness of the country in the international arena has been given priority. According to the WB, Sri Lanka remains one of the most protectionist countries in the world.
Low revenue collection by the Government has resulted in insufficient allocation for public goods, needed to sustain economic development of the country. Further, WB has pointed out that as a result, Sri Lanka is spending much less on education, healthcare and social protection, compared to similar income level countries.

In terms of Foreign Direct Investments (FDI) attractions, the country is at a minor level, as they have achieved FDI of only around 2% of GDP.
The report says, "The economy has not expanded enough to new areas over the past few decades and exports have not been grown to their potential."

In order to achieve more inclusive economic growth, the WB recommends to understand where the poor live, and address the poverty.
WB findings suggest that "most poor people live within 30 kilometres of main cities." WB therefore emphasizes that "it is critical to ensure the benefits of growing cities reach out to the poor."

In order to tackle higher poverty rates in the Northeast and districts like Monaragala, the need for a wide range of activities was highlighted.

The importance of addressing issues like low female labour force participation and institutional reforms to ensure open, accountable and inclusive governance were also stressed.

"Balancing economic growth with preserving country reachable environment and to make country rich before it gets old since the aging population in the country is accelerating are crucial," the story concluded.

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