Notes from Sri Lanka Economic Summit: Session 02
The growth of Sri Lanka's economy has come under the spotlight in the past few years. It has been debated and discussed at many platforms. But what are the private sector views on this?
Exploring Sri Lanka's next growth drivers was one of the discussions held at 2019's Sri Lanka Economic Summit. Experts representing various sectors of the economy came together to examine specific bottlenecks, growth drivers, and most of all, how can we as a nation achieve inclusive growth.
Sri Lanka Economic Summit: Session 02 Panellists
Some of the key points of discussion focused on tourism, retail, agriculture, health, education and connectivity (logistics and transportation). Here, the panelists discussed on how to improve management techniques, upgrading education structure, using new technologies, and more.
Tourism's contribution to the country's GDP in terms of dollar earnings has risen from 1% in 2011 to 5% in 2018, equivalent to US$ 4.4billion. The panelists brought to attention the need of a fully-fledged marketing plan to promote tourism further, promoting the country as a shopping and entertainment tourist destination and setting internationally competitive prices for popular tourist attractions, while also concentrating on tax schemes, to help revive the tourism industry.
If retail is to move forward, there is a need for greater consumption. Larger consumption could take place by means of expanding the market. This in turn would boost the GDP, while giving rise to income. Moreover, the country needs to look into matters such as tax refunds, investments and supply chain improvements, for sectoral growth. In 2018, Sri Lanka ranked number 12 out of 30 countries in the A.T. Kearney 2018 Global Retail Development Index, highlighting the potential for investment in the sector as well.
The uniqueness of Sri Lanka's retail and tourism is that it is not limited to Colombo alone, but spread across the country's length and breadth. The tourism can unlock the full potential of the retail industry enabling it to be a hub in the region.
Over 30% of the population in Sri Lanka is engaged in agriculture. The country is known to have an agricultural history spanning over 1200 years. Currently, loss of agricultural land, irrigation problems and inadaptability to technology are the main issues faced by the sector. Giving priority to improve productivity and modernizing the systems of agricultural technology could further tweak agriculture to provide a larger share of the economy's GDP.
“We need a well-educated work-force to support the envisaged growth that we are expecting in all the sectors,”
Prof. Nilanthi de Silva.
A main reason for the successful performance of the healthcare sector in Sri Lanka is the fact that it has very good rates of completion of primary and secondary school. Some of the speakers in the panel brought up the concern that individuals need to pursue higher education. This would effectively boost economic growth as higher education is one of the key drivers of growth performance in economies, since it improves the quality of workers and expands the labour force.
The panelists discussed the tremendous services provided by the health sector to its users. However, due to the low tax collection as a percentage of GDP, the expenditure that can be put on health is constrained. Thus, this would also prove to be detrimental in terms of economic growth.
The Colombo Port has been regarded as an excellent container terminal, which has been included in the world’s top 30 ports. The need of the hour is to expand the current capacity, so it is able to comfortably service the current and future demand thus enabling the nation to continue to leverage on its strategic location.
When you consider the development of the economy, each sector plays a significant role. Therefore, Sri Lanka needs to focus on its key growth drivers and thrust forward determined policies and strategies for the reconstruction and growth of the economy. Thereby, promoting trade and tourism, upgrading services such as education and health, expansion of logistics and productive investments in agriculture, would support Sri Lanka’s transition to a more inclusive and resilient economy while getting growth back on track.