Sri Lanka's protectionist policies are holding back economic growth: Expert

SRI Lanka has a unique opportunity to tap into a rapidly growing global market in shipping, logistics, and free zones, projected to hit $ 18 trillion by 2030, but its protectionist stance is restricting economic growth, said an expert recently.

- DIVYA THOTAWATTE

This discussion took place during an evening Business Council of The Ceylon Chamber of Commerce. The discussion was themed 'Sri Lanka's Future Export Prospects? Challenges. Opportunities. Reforms.' where Shippers' Academy Colombo CEO Rohan Masakorala spoke on the subject.

"Protectionism isn't patriotism. This is to guard a few people's interests, but we cannot grow exports if the industry Minister's position is this," said Masakorala, highlighting how despite Sri Lanka's head start as South Asia's first open economy, it now remained stuck at $12 billion in annual exports while Bangladesh, Vietnam and India surged ahead.

"We are protectionist. We don't want foreign shipping companies having 100% ownership here. India, Pakistan, Dubai, Singapore, Malaysia, Philippines, and even Communist China have opened it. But we talk of how we don't want them to have 100% office here. We want them to be minority partners here." He explained that while Sri Lanka liberalised in 1977, decades later, it still clung to para-tariffs, complex regulations, and a "closed-shop" mentality that deterred investors. With its archaic labour laws, inefficient customs procedures, and sudden VAT changes and red-tape that blindsides exporters, it was inevitable that the country would lose investors. Therefore, tea, rubber and apparel still dominated the country's exports, with little diversification into other high-value sectors.