Sri Lanka’s Journey to Economic Stability
As a nation, Sri Lanka has endured a tumultuous past, particularly with respect to its economic standing. In the wake of a nearly three-decade-long civil war, the country was left to grapple with a wide-ranging array of economic challenges that had been exacerbated by a lack of economic development. With the war now in its rearview mirror, Sri Lanka has committed itself to a path of economic recovery and stability, with a variety of measures being implemented to ensure the nation is able to make its way out of the economic abyss.
Rebuilding the Economy from the Ground Up
The rebuilding of Sri Lanka’s economy began with the implementation of several fiscal reforms. These included an increase in the value-added tax rate, reductions in public sector wages, and reforms of the country’s pension system. These measures were designed to address the fiscal imbalances that had hindered the nation’s economic development in the years prior. In addition to fiscal reforms, the government also sought to increase foreign direct investment in the country. This included the implementation of a number of tax incentives and other measures designed to attract foreign investors. These efforts were seen to have had a positive impact on the country’s economy, with foreign direct investment increasing by 12.6% in 2018.
Creating Conditions for Sustainable Growth
The government of Sri Lanka has also taken steps to ensure that the economic growth that has been achieved is sustainable and equitable. This includes the implementation of a number of measures to promote the development of small and medium-sized enterprises (SMEs) in the country. These measures include the provision of credit guarantees, tax incentives, and access to financing. Furthermore, the government has also sought to promote the development of the country’s infrastructure in order to support economic growth. This has included the construction of new roads, railways, and ports, as well as the development of telecommunications and energy infrastructure. These efforts have been seen to have had a positive impact on the country’s economy, with the World Bank noting that the country’s infrastructure has improved significantly in recent years.
Promoting Inclusion and Equality
In addition to the measures mentioned above, the government of Sri Lanka has also sought to promote economic inclusion and equality. This has included the implementation of policies aimed at reducing poverty and increasing access to essential services. These measures have been seen to have had a positive impact on the country’s economic development, with the World Bank noting that the poverty rate in Sri Lanka has decreased from 15.2% in 2006 to 4.1% in 2018. Furthermore, the government has also sought to increase access to financial services in order to promote economic inclusion. This has included the implementation of measures such as the provision of microfinance loans and the establishment of a financial literacy program. These efforts have been seen to have had a positive impact on the country’s economy, with the World Bank noting that access to financial services has increased significantly in recent years.
Fostering an Environment of Innovation
The government of Sri Lanka has also sought to foster an environment of innovation within the country. This includes the implementation of measures such as the establishment of a number of incubators and accelerators, as well as the provision of seed funding to entrepreneurs. These efforts have been seen to have had a positive impact on the country’s economy, with the World Bank noting that the number of startups in the country has increased significantly in recent years.
Gaining Momentum in the Right Direction
Overall, the government of Sri Lanka has made significant progress in its efforts to rebuild the nation’s economy. The combination of fiscal reforms, investment promotion, infrastructure development, poverty alleviation, and the fostering of an environment of innovation has been seen to have had a positive impact on the country’s economic development. As a result, the country has been able to make significant strides in its journey out of the economic abyss.
Conclusion
Sri Lanka’s journey to economic stability has not been an easy one. However, the government’s commitment to fiscal reforms, investment promotion, infrastructure development, poverty alleviation, and the fostering of an environment of innovation has been seen to have had a positive impact on the country’s economic development. As a result, the country has gained significant momentum in its efforts to make its way out of the economic abyss.
