Thursday Dec 12, 2024
Thursday Dec 12, 2024
Thursday, 8 December 2022 03:05 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
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ADB Vice President Shixen Chen - Pic by Ruwan Walpola
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The Asian Development Bank (ADB) this week expressed optimism over Sri Lanka’s progress towards economic recovery but stressed the path to recovery is challenging and requires the support of all stakeholders.
“The economy is on its way to recovery and this is very positive. The Government is working on a stabilisation plan. It is a very comprehensive plan. We see some economic indicators showing positive signs,” ADB Vice President Shixin Chen told the Daily FT in an exclusive interview during his visit to Sri Lanka.
He had one on one meetings held with President Ranil Wickremesinghe, Prime Minister Dinesh Gunawardane, Treasury Secretary Mahinda Siriwardena and Central Bank Governor Dr. Nandalal Weerasinghe.
The Vice President expressed the multilateral donor agency’s strong commitment to supporting Sri Lanka to overcome the economic crisis.
“Sri Lanka at this moment requires the support of the development partners and the ADB is very keen on supporting the country to overcome the ongoing economic situation,” he added.
Chen also said the Government’s strong commitment and efforts taken so far to change the momentum towards a more inclusive, and diversified recovery path are commendable.
“In the short term, economic stabilisation is very important. The Government’s fiscal situation, debt, inflation, balance of payment and supply of essential goods are urgent factors that need focus at present,” he said.
The ADB Vice President also insisted on protecting the poor and the vulnerable including women, children and girls.
With regards to the post-recovery stage, Chen said it was important for the country to explore sectors that can help to put Sri Lanka on a growth trajectory.
“Policy and structural reforms in SOEs to enhance governance, and efficiency is important, particularly in sectors like finance and power is essential to enable the private sector,” he said.
He went on to say that the country has the potential to diversify the power matrix.
“Sri Lanka has a huge potential in the renewable energy sectors such as wind, hydro, and solar. So many potential areas but still not been fully utilised,” he pointed out.
The ADB Vice Chairman also said to move in a better direction, it was critical to bring in upstream policy reforms to enable private sector participation.
“It is important to have a strong private sector with reduced protection to be competent and work on a level playing field,” he added.
He said a boost in FDIs is also important to expand the job opportunities in economic zones, transfer of technology, innovation, and doing business ranking in the country.
Chen highlighted tourism as a top potential industry and low-hanging fruit for Sri Lanka to overcome the situation, though it requires more support to overcome the multiple challenges faced.
“Exports are another key sector that can drive growth. In the future, merging with the global value chain is critical, because the competition is high. Sri Lanka needs to explore an outward-looking export growth model. The structure of exports also needs to be upgraded from low-value to high-value-added products,” he explained.
Noting that the path to recovery has many daunting tasks, Chen said the progress so far has been quite positive.
“The Government has the vision and even people have realised that they need to somehow grasp the opportunity to continue the momentum,” he pointed out.
In terms of the ADB’s country strategy partnership for the next five years from 2023-2027, he highlighted three key focus areas; economic growth, human capital development and green growth.
“I think this is a very important period for Sri Lanka to build confidence and work together step by step,” Chen said.
