Headline: Beyond Recovery – Urgent Call for Structural Transformation in Sri Lanka 📈

• Overall Assessment: Prof. O.G. Dayaratna-Banda warns that while Sri Lanka’s recovery from the post-2019 collapse is "rapidly" progressing—with stabilized inflation and rebounding growth—it must not be mistaken for permanent transformation. • Sector Breakdown: • Services: Now the economy's "glue," accounting for 57% of GDP and 50% of employment. • ICT/BPM & Modern Services: The transition from low-value tasks to high-complexity sectors like AI-driven analytics, fintech, and logistics is critical for productivity. • Agriculture & Industry: Productivity in these sectors is now heavily dependent on efficient, modern services. • Economic Costs of Corruption: Historical data from Prof. Indraratna (2007) highlights that public sector corruption absorbs approx. 8.5% of GDP, effectively slashing annual growth by 2 percentage points. • Key Barriers to Growth: • Red Tape: Starting a business requires navigating at least 14 government agencies, leading to institutional inertia. • Skills Mismatch: Weak broadband and outdated curricula hinder the knowledge economy. • Bureaucracy: Digitalization remains "rhetoric" as long as regulations demand physical paper over digital copies. • Future Outlook: Based on provisional analysis, lasting growth requires moving beyond "low-technology traps" toward high-value, tradable services and radical institutional honesty. 🇱🇰