Spotlight: Econ Op-eds in Summary (Week ended 9th June '21)
1. Trade in the pandemic era: A 1-year assessment
By: Dr. Asanka Wijesinghe
Although trade volumes contracted in 2020, the WTO’s recent estimates showed that trade contraction for 2020 was much lower than they had previously expected. New data has also shown a recovery in global trade similar to 2019 levels. However, Sri Lanka’s exports need further recovery in order to reach the 2016-2018 trend levels as exports plummeted mid 2020 in light of the pandemic.
As exports remain low, authorities have taken to restricting imports in order to maintain a bearable balance of payments. The restricted imports include food items, of which although production prospects are promising for now, economists predict to see a large decline given the chemical fertilizer ban. To avoid a shortfall in food, imports of food items must be allowed.
Although global trade is recovering, current import controls inhibit Sri Lanka’s integration into the global market. The government must re-assess import controls for two main reasons. One reason is that COVID-19 has reduced purchasing power for daily wage earners, and the other is that domestic food shortages may be created if there is a shortfall in domestic production.
2. Promoting organic agriculture Repercussions of the fertiliser ban
By Nimal Sanderatne
A recent report by the Sri Lanka Agricultural Economics Association (SESA), while acknowledging and endorsing the decision to adopt a green socio-economic model, raised concerns about the recent decision to ban chemical fertilizer and pesticides and impact it could have on the productivity of agricultural goods.
While more and more countries are currently adopting this green socio-economic model, most countries take systematic and pragmatic approaches to achieve this long-term objective by first setting targets, standards, and subsequently, investing and promoting farmers to adopt best practices.
As such the SESA proposes a three-point policy package to incentivize organic cultivation. These includes, encouraging organic fertilizer production, developing national standards for organic fertilizer and improving awareness of various organic farming technologies.
(Compiled by: Promodhya Abeysekara, Malitha Goonerathne & Mariyan Perera)
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