📈 World Bank Warns Sri Lanka to Reopen Trade & Accelerate Reforms

• Key Issues & Growth Trends World Bank Lead Economist Dr. Harsha Aturupane warned that Sri Lanka risks falling behind regional peers due to two decades of anti-export policies. • Merchandise exports grew sluggishly from US$ 8.6 Bn in 2010 to US$ 12.8 Bn in 2024, representing an average annual growth of only 3.4%. • Global Value Chain (GVC) participation stands at just 8.1%, falling significantly behind regional competitors like India (26%) and Vietnam (34%). • Sector Vulnerabilities & Key Exports • Sri Lanka remains dependent on a static export basket dominated by tea, apparel & textiles, coconut, and rubber. • The ICT/BPM sector—the country's second-largest export industry—faces severe disruption from AI unless firms rapidly shift to higher-value services. • Structural & Cost Bottlenecks • High domestic production costs driven by tariffs, non-tariff barriers, taxation, and elevated electricity rates undermine market competitiveness. • Loss-making State-Owned Enterprises (SOEs) like SriLankan Airlines and Ceylon Petroleum Corporation impose substantial economic costs. • Cumbersome administrative procedures, public sector rent-seeking, and lengthy legal processes (often taking a generation to resolve commercial disputes) discourage investment. [State of Business Analysis](https://www.youtube.com/watch?v=P5WwzgRoDpI) This broadcast offers additional perspective on Sri Lanka's current economic climate and private sector performance discussions.