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World Bank urges SL:
Enhance role of private sector
Key challenges for Sri Lanka include enhancing the role of the
private sector, including the provision of an appropriate environment
for increasing productivity and exports, boosting investment, human
capital, realigning public spending and policy with the needs of a
middle-income country, and ensuring that growth is inclusive, a World
Bank (WB) report released recently said.
Sri Lanka should focus more on rising public debt, low fiscal revenue
and the deficit in the external current account.
Much needs to be done to attract FDI, improve external sector
competitiveness and arrest declining fiscal revenue, adopt an export-led
growth path and create the space to pursue counter-cyclical policy, Sri
Lanka is focusing on long-term strategic and structural development
challenges as it strives to transit to an upper middle-income country,
WB's South Asia Economic Focus, Fall 2015 report said.
The WB commended the government for its commitment to carry out much
needed political and economic reform. However, having acknowledged what
has been done so far, the WB stressed the need to do much more in the
micro-economic sphere. Economic growth in Sri Lanka has been among the
fastest in South Asia in recent years. Growth averaged 6.3 percent
between 2002 and 2013, with Gross Domestic Product (GDP) per capita
rising from US$ 859 in 2000 to US$ 3,256 in 2013. Preliminary
indications are that the GDP increased by 7.8 percent in 2014.
For most of the past decade, growth has been pro-poor, with
consumption per capita of the bottom 40 percent growing at 3.3 percent a
year, compared to 2.8 percent for the total population. Other human
development indicators are also impressive by regional and lower middle
income standards. Sri Lanka has surpassed most of the Millennium
Development Goal (MDG) targets set for 2015, outperforming nearby
country comparators on most MDGs.Notwithstanding declining poverty, 13
districts comprising 36 percent of the population remain below the
national poverty headcount. In four conflict-affected districts, poverty
rates are at or above 20 percent. While the national unemployment level
is low at 4.4 percent, 14 districts report unemployment rates higher
than the national average, the World Bank report said.
- SJ
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