Sri Lanka’s new national industry policy and five-year strategic plan should help the island nation boost its manufacturing sector and exports, aiding broader economic recovery and enhancing the country’s presence in the global markets, experts said.
Sri Lanka’s Ministry of Industries has prepared a new national industry policy in a bid to boost manufacturing output, as part of wider efforts to shore up the national economy.
Sirimal Abeyratne, a professor of economics at the University of Colombo, said the manufacturing sector has no limits to expansion, unlike agriculture.
“It is essentially a ‘tradable sector’ that (will) help the country to expand its presence in the global markets and integrate with global value chains,” he told China Daily.
Strengthening manufacturing will have a positive knock-on effect on other sectors, including agriculture and service sectors, he said.
“The Ministry of Industries has played a crucial role in reviving the country’s economy amid past economic crises. Our goals for 2030 include increasing the manufacturing sector’s contribution to gross domestic product from 16 percent to 20 percent, raising the role of entrepreneurship in the workforce from 2.8 percent to 7 percent, and boosting industrial exports’ contribution to GDP from 14 percent to 20 percent,” Secretary to the Ministry of Industries Shantha Weerasinghe said during a news briefing on July 31.
To achieve these objectives and build a globally competitive national industry base in Sri Lanka, a five-year strategic plan for 2023-27 has been prepared and submitted to the Department of National Planning, the official said.
“The new national industry policy and the five-year strategic plan of Sri Lanka will be the cornerstone of progress in its ongoing economic development,” said Lawrence Loh, director of the Centre for Governance and Sustainability at National University of Singapore Business School.
Urgency of recovery
The expert noted that Sri Lanka is in urgent need of economic recovery after recent downturns.
“The policy and plan will set the direction for a whole-of-country approach to harness resources and investments to attain a strong economic growth momentum,” Loh said.
The Ministry of Industries has introduced a registration system for manufacturing industries, Weerasinghe said on July 31.
Also, the government has allocated funds for a loan scheme to enhance leadership and entrepreneurship in small and medium enterprises. “The manufacturing sector will be particularly critical for Sri Lanka as it can tap into human capital more rapidly than the services sector,” said Loh from Singapore.
“The country will have a better comparative advantage in the manufacturing sector as the costs can be lower at the onset.”
However, to boost the expansion of manufacturing industries, Sri Lanka will need to lean on globalizing countries such as China for technical expertise and business opportunities, he said.
James Chin, professor of Asian Studies at the University of Tasmania in Australia, said the Sri Lankan economy is picking up again, which will boost trade prospects for the island nation.
“It is highly expected that trade in Sri Lanka will pick up for the rest of this year and next year, as the world trade recovers,” he added.
Xinhua contributed to this story.
