Move away ‘Crony capitalism’, in comes transparent development
View(s):Prime Minister Ranil Wickremesinghe, addressing the Economic Summit on Tuesday, urged businesses to change their mind-set from crony capitalism to the next generation of reforms. ”The topic of this summit, which deals with increasing exports to $50 billion, is perfectly aligned with our aim to build a new country in 60 months. We want to create one million jobs in five years. For this we need to be bold, a change of mindset from the private sector. We must form a highly-competitive social market economy based on sustainable development,” he told the gathering, pointing out that “crony capitalism” must give way to reforms.
He added that the main focus of the new Parliament would be to resolve Sri Lanka’s longstanding ethnic issue and take the country off the United Nations Human Rights Council (radar). ”In order to ensure that there are large investors coming in to the country, we are having economic development areas,” he said, adding that within this they will cluster three or four investment promotion zones that will reduce the cost of infrastructure that will make it easier to control pollution and ensure the environment is protected.
He said there will be two major zones located around the Western province starting from Kuliyapitiya to Diwulapitiya and the other from Horana to Avissawella with the third economic development zone focussing on logistics, which will be around the port and airport in Colombo. He added that another zone will be built focusing on financial services with all zones located within Hambantota and Trincomalee tagged along with Jaffna.
“Apart from that, we are looking at two economic development zones for tourism, with one zone located within Bentara to Weligama, and other within the cultural triangle to attract high spending tourists,” Mr. Wickremesinghe said.
He added that the government is also planning another 22 economic development areas for export oriented agricultural sector.
With its strategic location and human development fundamentals, the Sri Lankan economy has ample opportunities for success, the discussants at the panel discussion in the inaugural session at the Economic Summit observed.
They said that the country is lagging behind competitor economies in Asia largely owing to the three decades-long war. Whilst the post-war era has shown some growth momentum and brought in macroeconomic stability, the structure of the economy does not provide the framework for high and sustainable growth, such growth is essential to increase incomes of the majority of the population, and push Sri Lanka to upper middle income status and beyond.
As a small developing economy with a population of 20 million, Sri Lanka needs to have a thriving export sector to provide the impetus for growth, Mr. Wickremesinghe said, adding that the country’s export performance never reached the highest of countries like Singapore, Taiwan, and Korea initially, and Malaysia and Thailand more recently. An analysis showed that at its peak exports reached just above 30 per cent of GDP in late 1970s and 1990s and has more than halved since the turn of the century, according to the panelists who said that as a result, the country has gradually lost its share in world exports. “Our markets are concentrated in Western economies and tea and apparel continue to dominate with a 60 per cent share. This leaves our export sector vulnerable to various external shocks,” an analyst said.
Mr. Wickremesinghe added that the Western Megapolis project encompassing eight million people will be taken forward to create a mega city to spur development including 500,000 new housing units. Reviving export growth has been central to many economic debates in the past, but a lack of a creative vision, right policies, and focused implementation had held back progress, according to the panelists, who said that the current social, economic and political environment in Sri Lanka has opened up a unique opportunity to rethink Sri Lanka’s growth strategy and to reboot the economic engine with exports as a key driver to achieve sustained and inclusive growth.