GCR highlights obstacles to business growth
Policy instability, bureaucratic inefficiency, access to financing,
corruption and inflation are the key factors that obstruct growth in
businesses in Sri Lanka, states the Global Competitiveness Report (GCR)
of 2006-2007.
Sri Lanka was ranked 79 of 120 developed and emerging economies for
sustained economic growth indicating a slight progress from the previous
year.
Inconsistency in policies, poor infrastructure facilities, crime and
corruption are major obstacles for corporate growth and economic
development in the country said CEO, The Lion Brewery Ceylon Ltd. Suresh
Shah speaking on Global Competitiveness Ranking- A private Sector
Perspective at the Colombo Hilton.
An investment growth of 35 to 40 percent is necessary to sustain an
eight percent GDP growth rate in the country. The rate of investment in
2005 was 26.5 percent of the GDP of which domestic savings were 17.2
percent. Attracting Foreign Direct Investments (FDIs) is important to
meet the required investments, he said. To attract FDI market size,
political and macroeconomic stability, modern infrastructure, investor
friendly regulatory framework, good governance and skilled professional
labour are necessary, Shah said.
Policymakers and business leaders should use the GCR to raise GDP
growth, alleviate poverty and encourage local entrepreneurs to penetrate
international markets. To boost GDP growth it is paramount that
investments and exports are increased, he said.
According to the GCR, Sri Lanka's health and higher education,
innovation and business sophistication standards are higher than
Pakistan, Bangladesh, Nepal but behind Singapore, Hong Kong, Taiwan and
India which have progressed rapidly in these areas over the years.
Economists and research analysts said that the GCR and the ranking of
Sri Lanka meant little in terms of practical indications for economic
growth and viable policy reforms. The indicators were academic and not
forceful enough to make changes to global economic reforms.
Ceylon Chamber of Commerce, Chairman, Mahen Dayananda said that Sri
Lanka had a long way to go in achieving economic development but has
come halfway down the road.
"We need to boost our exports with value added products and build a
good image to compete in the international markets with confidence. Sri
Lanka's tea, rubber and spices need value addition and branding for
sustained market growth", Dayananda said.
Senior Economist World Economic Forum Dr. Irene Mia said business
sophistication, innovation and finance markets in Sri Lanka are good and
encouraging.
The GCR is a guide and an indicator as to how economies function and
perform.
(LF) |