Sri Lanka Economic Summit: Session 01
The recently held ‘Sri Lanka Economic Summit 2019’ took stock of the evolving global scenarios and explored its implications for Sri Lanka under the theme of ‘Global Dynamics in the Next Decade’. This article captures a few areas discussed by the speakers under the broad topics of global headwinds and how Sri Lanka can positively leverage on this.
“62% of Sri Lankans are going to the labor market without any technical training or university education” remarked Mr Dhammika Perera, Chairman of Vallibel One PLC. He argued that if this segment is provided with loans or other support mechanisms, they will be able to harness the skill set that is required. There was also a broad consensus among the panelists that skills development and improving competitiveness is imperative for Sri Lanka in order to move out of the middle income trap.
Tourism plays an important role in the island, with 2.3 million tourists arriving last year. However, this number is relative low when compared to most of the Asian countries. Hence, the uncertainties
in the world are unlikely to impact Sri Lanka’s tourism sector given its low base. The Easter terror attacks have had an impact on the country but recovery is faster than expected. However, returns will be lower due to the discounts given with earnings being about 15% lower than last year. Therefore, as recognized by Mr. Balendra, Chairman of John Keells Holdings PLC, the sector is recovering much faster than what was projected because the base was low and it will see an increase in tourist arrivals owing to its proximity to India.
“The Indian explosion of outbound travel is really manifesting itself and Sri Lanka will see an increase in growth because of its proximity to India”
– Mr Krishan Balendra
Sri Lanka has immense potential in many areas, one such area is its natural beauty. Hence, development of Sri Lanka should be carried out in a way which preserves its natural capital. As suggested by the former Indian Commerce and Industry and Civil Aviation Minister, Sri Lanka can leverage on its potential for wind power.
“Because of Sri Lanka’s location it can generate about 14,000 MW of wind power and it can share its power with other countries”
– Shri Suresh Prabhu
Sri Lanka should also focus on strategic partnerships in global supply chains and much more attention should be paid to Asia so that the country can latch onto Asia’s growth. As recommended by Mr. Yapa, the country needs to attract market seeking FDIs and in order to do so, Sri Lanka should expand beyond its current 21 million population and move towards regional and bilateral agreements particularly with Asia. Further, it was also highlighted by him that the growth in FDI inflows for Sri Lanka has mostly been in the Western Province and this may pose a threat to the country. Hence, Mr. Yapa advised the country to look at widening its FDI coverage which will ultimately bring about inclusivity and sustain the FDI momentum.