Restructure exports for growth

Economic downturnThe Economic Forum has set the stage for international and national experts and business tycoons to discuss and build a dialogue on economic development trends. Organised by the Open Society Foundation, the Economic Forum was based on a study by the Harvard University’s Centre for International Development on initial growth diagnosis on Sri Lanka.

Director of the Centre for International Development and former Minister of Planning in Venezuela Prof. Ricardo Hausmann, in a brief interview with the Sunday Observer, highlighted four key areas to support sustained and inclusive growth. Commenting on the economic development path, Sri Lanka is taking at present, he pointed out that it depended on the government and the citizens to cooperate with each other and stressed the need to follow the correct path to economic development.

Excerpts.

Q : Sri Lanka, with the recent political changes is facing challenges in the economy as well. How supportive will the Economic Forum be for the country to overcome challenges?

A: This definitely creates the platform to discuss economic development in the country under special circumstances – especially after the end of a war. The Economic Forum is structured around areas with risks and opportunities discussed among several internationally-renowned leaders who would share their perspectives with the government. An in-depth analysis and discussion on the need to develop government policy on these lines have been identified.

Q : How is Sri Lanka’s economic development?

A: Sri Lanka is at a critical stage. After ending the war, there is more space to focus on economic development. It is important to create a dialogue among economic experts and the business community for the way forward. Four areas need to be taken into consideration to support sustainable growth. Firstly, macroeconomic and fiscal stability, secondly structural transformation and competitiveness, thirdly, urbanisation and development and finally regional development and social inclusion.

Q: How would you analyse the current position of the Sri Lankan economy?

A: With the end of the war, Sri Lanka has to focus more on development. The fundamental solution is inclusive growth through social change. The country’s resources need to be equally shared to result in sustainable social change. Inclusive growth could be at regional or national level.

Q: The world economy is facing challenges due to climate change. Sri Lanka felt the changes more frequently in the recent past, which affected agriculture – the basis of the country’s economy. How can countries face those challenges which will have a direct and indirect impact on economic growth?

A: Sri Lanka cannot stop global warming as it is created by other countries. This year it is believed the weather patterns have worsened due to the El Nino effect. There are droughts in one part of the world, while others experience excessive rain and floods. Countries need to master the technology. This demands a learning society and a learning economy.

Q: Sri Lanka alos faces challenges regarding the GSP Plus – particularly the garment and fishing sectors. Government discussions with the EU seem to be positive but nothing has been finalised as yet. Sri Lanka’s economy depends on these industries, especially the garment industry. Has Sri Lanka been heavily dependent? Do we need to change?

A : The GSP Plus is meant for greater benefit, to support developing economies without paying large tariffs to markets in the developed countries. The impact depends on how effectively it is used.

Q: Do you think Sri Lanka is on the right path as far as economic development is concerned?

A: It all depends on the government and the citizens and how they cooperate with each other – on conditions in which the society is attuned. For Sri Lanka, it is too small at national level and too big at global level to have internal fights.

It is fundamental to solve problems by building confidence and trust among people and it is through this that sustainable economic development can be achieved.(Sunday Observer)

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