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In this issue

Exports cannot deliver what trade reforms can We began 2021 on a low, with a 3.5% GDP contraction the previous year, the sovereign rating falling deeper into junk status, and with $3.5 billion worth of foreign currency loans to repay during the year - and a massive $23 billion by 2025! In January, official forex reserves stood at $4.15 billion and recovered to $4.5 billion in April before falling to $4.02 billion in May 2021. Things are dire. Everyone agrees that exports can solve most of our problems (if not all). For decades, we have tried to boost exports while liberally curtailing imports. From being among the first to liberalise its economy in the region, we have regressed to a protectionist state, and worse (please see the Bellwether column on page 22). Yet, we are incapable of unlocking the export potential. According to the World Bank, exports as a share of GDP almost halved from nearly 40% in 2000 to 23% in 2019. To understand why, we interviewed well-known economist Anushka Wijesinha for this edition of Echelon (please see page 84). He argues that without trade reforms, we will not grow exports. In turn, we will fail to attract FDIs that will add real economic value, create better jobs and uplift living standards—important things investments to build apartments will not do. The more we delay reforms, the harder it will be to do reforms. The economy will fall deeper into debt with frequent currency and balance of payments crises. Worryingly, most do not even recognise the need for trade reforms! However, there is some comfort. Building consensus on trade reforms is not impossible.