Spotlight: Econ Op-eds in Summary (Week ended 05th August '20)
1. Economists opine Sri Lanka should focus on international market
By: Nishantha Hewage
· The lockdown due to the COVID pandemic has significantly affected the Sri Lankan economy, and may result in a fall in income equivalent to 5% of 2019 GDP and result in an economic contraction. Scarcity of jobs and deteriorating standards of living have also left the poorest most vulnerable.
· The combination of a strict lockdown strategy, breakdown of the country’s international connectivity and the global economic slowdown have significant implications for Sri Lanka’s economy. With limited tax revenue and fiscal constraints, the entire burden of short-term stimulus has been placed on monetary policy.
· However, in terms of long-term recovery, it’s important that Sri Lanka tries to reach GDP growth rates of 5-6% by stimulating investments and achieving fast export expansion. To do this, an assessment of why Sri Lanka failed to sustain a high rate of growth in the past must be made, while also focusing on the international market.
2. Out-of-the-box thinking is the need of the moment - Ajith Nivard Cabraal
By: Sandun A. Jayasekara
· The impacts of COVID-19 can be quite damaging to Sri Lanka’s economy, according to former Governor Ajith Nivard Cabraal. Big hits to consumer demand both locally and globally, Sri Lanka’s economy has caused a significant contraction this year. Creative policies will be needed to take Sri Lanka forward.
· While export sectors seem to be recovering, further capitalizing on and reaching new niche markets will be crucial for sustaining this. At the same time, several local businesses are suffering substantially, and the government might need to further support them using low interest loans, moratoriums, and even tax breaks despite the weakness in government finances.
· The whole world is in an unprecedented place right now, and will also need to take creative measures. Debt relief or delays for emerging nations will be a massive benefit to countries like Sri Lanka, especially given the inability to increase government revenue at times like this. That will be one of the most crucial and helpful actions to help countries right now.
(Compiled by: Chayu Damsinghe, Promodhya Abeysekara & Eshan de Mel)
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