What economic measures should Sri Lanka take to overcome the COVID-19 pandemic economic shock and to what extent can Port City be a catalyst for the recovery?
Dr. Wignaraja highlighted that 2020 is likely to see negative growth globally in the wake of the COVID-19 crisis. He said Sri Lanka had handled the public health emergency well but the economic fallout from the pandemic would be significant. Sri Lanka’s growth could be less than the 2.3% recorded in 2019 and possibly the worst rate in its recent development history. Much will depend on the US-China dynamics and supply chains getting relocated from a manufacturing point of view. However, it is important to note that the Port City is a services hub not an industrial one. To be competitive Sri Lanka needs to have a tax and policy regime to position itself as a business-friendly nation. He further stated that a ranking of 99th position on the World Bank’s Doing Business Index is low by the standards of other upper-middle income economies in Asia and that Sri Lanka should ideally target being in the top 35 or 40 in the world by 2025, which requires a major effort in cutting red tape affecting business and digitizing all government services.
Dr. Wignaraja expressed concerns about the future employability of local graduates in the Port City. Despite a possible reversal of the brain drain, there are urgent issues to be addressed in the university system including a skill mismatch. The President has recognized this problem and underlined the need to move towards a curricula that suits the Port City (that includes STEM subjects, IT skills and foreign languages). Raging has been outlawed but better enforcement is needed.
Dr. Wignaraja that it is critical that the Port City should be seen not as an enclave but as a vehicle to drive modern services sector developed which is linked to the rest of the Sri Lankan economy. Since the GoSL needs the support of businesses including the port city to achieve a high growth trajectory it needs to create an overall environment that is conductive to do business and foster economic growth in the future.