Category: Economic Flash Published on Wednesday, 22 October 2014 03:57
The anticipated national elections have spawned a spate of misguided and unaffordable claims and counter claims. There have been calls for price controls for ‘essential commodities’ and a higher guaranteed price for paddy farmers as well as the introduction of a guaranteed price for fish. When considering such requests, it is important to learn from the mistakes of the past. Repeating policies, which have undermined the development of the country and ultimately imposed additional burdens on the people, would not serve anyone’s interest, particularly those who need ‘relief’ the most. In this connection, it would be useful to examine why price controls and subsidizing ‘essential commodities’ was a failed policy in the past. There is also merit in considering what the best instrument is for providing relief and how it can be targeted to those most in need. Finally, one needs to understand how best to treat the causes rather than the symptoms of the ‘cost of living problem’ which are triggering the pressure for these distortionary policies.
Last Updated on Wednesday, 22 October 2014 09:25
Category: Economic Alert Published on Thursday, 02 October 2014 03:36
A Winning Combination.
The combination of Sri Lanka’s geographical proximity and multifaceted ties with India which stretch back millennia not least through Buddhism; and the close all weather friendship with the People’s Republic of China which spans over six decades, creates an unprecedented development opportunity. Maximizing commercial opportunities with both countries are not mutually exclusive objectives. Sino-Indian economic ties were given a major boost during President Xi’s recent visit to India. This will inevitably generate new opportunities for Sri Lanka as well (see previous Pathfinder Alert 64 at www.pathfinderfoundation.org). This poses the question as to what would be the most conducive framework for maximizing the benefits from the proximity to India and the closeness to China. Getting the FTAs with the two countries right would act as a major engine for growth and development. It is noteworthy that Mexico has benefited greatly from the North American Free Trade Agreement (NAFTA) which links it both to the US and Canada.
Last Updated on Wednesday, 01 October 2014 09:04
Category: Economic Alert Published on Tuesday, 23 September 2014 03:47
A Results – Oriented Visit
President Xi’s visit to Sri Lanka delivered an array of concrete outcomes across a wide range of activities. A total of 27 agreements were signed in important areas.
Last Updated on Tuesday, 23 September 2014 09:17