Home / FT View Editorial/ Competitiveness measures

Competitiveness measures

Comments / {{hitsCtrl.values.hits}} Views / Friday, 11 October 2019 00:01

Any economy looking to grow fast in the world today has to be obsessed with competitiveness. At the core of Sri Lanka’s slow growth is the reality that the economy is simply not competitive enough to link to global value chains, attract investment and thereby increase the volume and diversity of exports. This is also the hardest aspect to implement reforms in and the Government having struggled with it for four-and-a-half years has effectively given them up ahead of Presidential Elections.

But the world is still engaged in the race. According to the World Economic Forum (WEF) Sri Lanka has fared well in South Asia, managing to rank in the 85th position out of 141 countries. But it has only managed to improve one ranking from the previous year and lags well behind India and other countries in East Asia, which should really be the benchmark Sri Lanka aspires to. Despite sliding 10 positions India is still ranked at 68. 

Even more worryingly in terms of trade openness, Sri Lanka is the second worst performing country, being ranked at the 140th position, out 141 countries. Further, Sri Lanka has poorly performed in terms of property rights, labour market flexibility and quality of land administration, being ranked at 123rd, 132nd and 135th, respectively. 

The stability of Sri Lanka’s financial system has also declined due to an uptick in non-performing loans, widening credit gap and a decline in the soundness of the banking system. Sri Lanka is ranked at the 92nd position in terms of the future orientation of the Government with weak performances in the legal framework’s adaptability to digital business models and the Government’s responsiveness to change. 

These numbers will not come as a surprise to anyone who has a clear picture of Sri Lanka’s economic weaknesses. The imposition of tariffs and other protectionist measures that have been implemented over the decades, usually with no logic behind them, has reduced the competitiveness of the economy. A sluggish agriculture sector, which employs about 24% of the labour force together with a under productive public sector, economic activity concentrated in the Western Province, moderate human capital development, an aging population and limited infrastructure development are some of the challenges that successive administrations have grappled with.  

Sri Lanka has made steady progress in key indicators such as corporate governance, transport infrastructure, labour markets, research and development, entrepreneurial culture, judicial independence, efficiency of legal framework in challenging regulations and freedom of the press.

Sri Lanka is ranked 50th, out of 141 countries, in terms of transport infrastructure and 56th in terms of corporate governance, despite a decline in the strength of auditing and accounting standards. The country is also ranked relatively high in terms of financing of SMEs and venture capital availability. 

Sri Lanka’s public sector performance has also been enhanced mainly due to an increase in the efficiency of the legal framework in settling disputes. But these need to be supported by more important reforms that keep pace with global challenges. 

In the latest ranking Singapore has replaced the US as the most competitive economy in the world. In a world riven with trade battles, political upheavals and other uncertainties Sri Lanka will have to find a way to improve its competitiveness to see stronger growth.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Ministry of Technical, Vocational Education and Training (TVET): A nation rich in human capital

Friday, 18 October 2019

nIncrease TVET certificate holders from 79,200 to 144,000, which will result in 40% of the 360,000 students per annum. nTransform unskilled labour contribution of the labour force into skilled labour contribution of the labour force by reducing the

Politics of history

Friday, 18 October 2019

An orator addressing a big political meeting in the North Central Province invites a journey to an atavistic glory, invoking names of several kings as well as notional imagery from the animal world. “Coming from these historical lands you are proud

The greenhouse and house destruction

Friday, 18 October 2019

The Buddha the Enlightened One on attaining enlightenment over 2,600 at Bodh Gaya uttered this paean of joy where he said, “For so many lives in the Sansara I have been looking for you the house builder, I have seen you and you will never make a ho

Deception, distortion, demonisation: Integral parts of SL democracy today

Friday, 18 October 2019

Elections are here, time for pacts, pledges and promises – the time-tested Sri Lankan way of savouring democracy. The sooner you get them negotiated and sealed the better. Formation of alliances before a Presidential Election is normal in Sri Lank

Columnists More