Sri Lanka must diversify exports and shift to making more complex, high-value products, Harsha de Silva, state minister of National Policies and Economic Affairs said.
“It is not possible for us to carry on growth if we do not make a turnaround; we have to change the way we do business. We can learn from our own experiences and from our competitors,” he told an economic forum organized by Sri Lanka’s Ceylon Chamber of Commerce in Colombo, Thursday.
“We need to move from buyer driven to producer driven production network.”
Producer driven networks are more technology driven and more capital intensive – with technology and knowledge needed in-house.
“So that is what we are looking for through FDI’s and innovations – with copy right – ownership of knowledge,” he added.
Speaking on trade competitiveness the minister noted that, Sri Lanka will struggle to be internationally competitive if we are restricted by the policies of the country and the attitudes of the people.
In 2017, Sri Lanka’s country score in the Global Competitiveness Index (GCI) declined to 4.09 out of 7. This is the lowest score Sri Lanka has received since 2010.
“The problem the way I see it is – why we can’t free up our growth is because we are not increasing exports to cover the increase in imports as growth accelerates,” the minister says.
“If you look at exports – the growth on its own has been doing well – but if you compare with the other competing countries – we are not even close to them.”
According to trade policy indicators recently developed by the IMF, Sri Lanka’s trade and FDI regimes are more restrictive than the average emerging market across key areas.