📈 Economists Call for Stronger State Role to Fix Sri Lanka’s "Racket" Economy

Leading economists and analysts highlight that Sri Lanka’s economic structure currently enriches a select few while burdening the majority, calling for progressive state regulation, redistributive market policies, and institutional reform. • Key Economic Issues & Malpractices - Systemic challenges cited include short-termism, low wages, price gouging, tax/VAT evasion, and illegal financial flows. - Highlighted a recent illicit $ 1 Bn transfer scheme involving four commercial bank managers without physical goods imported. - IMF 17th program ensured immediate financial stability, but failed to guarantee long-term social or environmental sustainability. • Sectoral Impacts & Regulatory Actions - Apparel & Textiles: Recognized as a key national success story built on historic investments in public human capital. - Environment & Health: Severe pollution in key water sources like the Kelani River from the Biyagama and Seethawaka industrial zones; Central Environmental Authority (CEA) recently shut 41 illegal factories and suspended the Ambuluwawa cable car project over ecological damage. - Agriculture: State role in paddy purchasing, milling, and distribution remains vital to curb price volatility. - Infrastructure & Utilities: Call for strong state control in natural monopolies like power and water to avoid high private rents. • Institutional Enforcement & Reforms - CIABOC actively investigating major financial malfeasance, including the $ 2 Mn Airbus bribery scandal involving SriLankan Airlines. - Proposed legislative updates aim to establish a Digital Economy Authority and strengthen state control via Electricity Act amendments.