Sri Lanka PM says sweeping changes needed for a leapfrog in economy

(COLOMBO, LANKAPUVATH) – Sri Lanka’s Prime Minister Ranil Wickremesinghe said sweeping changes in multiple levels are needed to propel Sri Lanka on a leapfrog trajectory to growth and not stagnate in the middle-income trap.

Delivering the keynote address at the Sri Lanka Economic Summit 2019 titled “Re-calibrating Sri Lanka’s Economic Trajectory: Towards 2025,” organized by the Ceylon Chamber of Commerce (CCC), the Premier said for Sri Lanka to see exponential growth, it has to make a clean break from the inward-looking policies of the past, recalibrate and move towards increased productivity and competitiveness, underpinned by a new system of governance.

“We are now an upper-middle income country: Do we want to stagnate in the middle-income trap or have a leapfrog trajectory which will make us an advanced economy,” the Premier asked.

“We have two options: we can either stagnate as a middle-income country, which many countries do when they become a middle-income country, or we can continue to grow.”

“If we are taking a leapfrog trajectory then we have to go differently. We got to make a clean break. We cannot have an economic management system suited for a low income country.”

He said for the Sri Lankan economy to experience a true take-off, there will need to be sweeping changes on multiple levels, including policies, stronger competitiveness, breaking into new industries, international engagement, and maintaining macroeconomic fundamentals.

“We must have a fiscal policy that contains debt, we should not allow it to increase. There should be a much larger space for investors. Our business climate has to improve, and we must have reforms to boost private investment productivity. These are things we must do.”

We have to join the global value chain. We need a new outlook. So the government machinery has to be restructured. Whole thing has to be more modeled on the private sector …We have to rebuild trust and that is the way to go forward,” Wickremesinghe said.

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