Lanka's HDI rankings reach new high

By Sanjeevi Jayasuriya

The export community appreciates a strong currency as it is conducive for economic growth.

There are periods where exporters undergo difficulties when local currencies appreciate, Exporters Association, Chairman, Rohan P. Daluwatte said.

Increase in cost of fuel and energy has been a major drawback for industries and businesses. Sri Lanka has one of the highest electricity tariffs in the region. This in turn has increased the cost of all goods making the products uncompetitive, he said.

There is no immediate sign of fuel and energy costs coming down and exporters need to make an effort to manage cost efficiently and effectively by increasing productivity and using energy efficient methods, he said.

The latest global trend is to invest on research and development, which is essential for development of the economy. Sri Lanka's expenditure on R and D is around 0.11 percent of the GDP. The amount spent on R and D is relatively lower when compared with other Asian countries.

The government should take an initiative to encourage research and development by forming public and private partnerships as there is a declining trend in R and D expenditure over the years, Daluwatte said.

Although, interest rates on deposits have come down, the prime lending rates remain relatively unchanged. This in turn hurts the development of the SME sector. However, the larger exporters borrow in foreign currency at much lower interest rates. The disparity between the rupee deposit rates and the lending rates have to be met immediately to keep the SME sector buoyant.

Sri Lanka's Human Development Index (HDI) ranking has reached the best levels in Asia. Similarly the ease of doing business index which emphasises having business friendly regulations and the global readiness index has also improved by a few notches. We need to improve theses indexes for better results, he said.

ADB has approved a grant of $ 200 million to help the government revamp its secondary school education to reduce unemployment and meet the urgent need for a skill workforce.