Shift gears to growth or risk sliding back: Advocata CEO

Saturday, 26 September 2026 00:00 - - {{hitsCtrl.values.hits}}

Dhananath Fernando

– Pic by Sameera Wijesinghe

Advocata CEO says Sri Lanka has staged one of the fastest recoveries from a crisis of its magnitude, but lingering in stabilisation risks renewed instability Calls for land reform, noting that about 82% of land is Government-owned and titling is progressing slowly
Proposes joining RCEP alongside an India trade deal, but concedes it is a long shot

Sri Lanka must shift from stabilisation to growth or risk sliding back into instability, Advocata Institute Chief Executive Officer Dhananath Fernando warned, calling for land, labour and trade reforms.

Speaking at the 49th Annual Meetings of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) in Colombo this week, Fernando said the macroeconomic indicators pointed to a completed recovery. The economy grew 5.1% in the first quarter and 4.2% in the second, and the fiscal accounts performed well.

“In simple terms, the economy is stable and has recovered. The challenge is on the growth side,” he said. “If we stop at the same place, we will slowly shift towards destabilisation again. We have to shift gears from stabilisation to growth.”

Fernando identified land as the first constraint. About 82% of land is owned by the Government, and land titling is progressing very slowly, he said. Labour laws are equally restrictive, he argued, citing limits on women working after 8 p.m. or 9 p.m. and on part-time and flexible work. He also called for reforms to open sheltered sectors to genuine competition.

The pressure on the labour market is set to build, with about 1.8 million young people expected to join the workforce in the next few years, more than the number the Government currently employs.

On trade, Fernando urged Sri Lanka to join the Regional Comprehensive Economic Partnership (RCEP, while securing a separate trade agreement with India, which remains outside RCEP. He conceded this was a long shot requiring extensive domestic changes, but said it would open up large new markets.