Pathfinder Foundation

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Improving the Business Climate In Sri Lanka

 The Pathfinder Foundation with the assistance of Volunteers for Economic Growth Alliance (VEGA) and USAID, recently commissioned a study to identify the policy and regulatory reforms that are required to make Sri Lanka a leading country in investor friendliness.  Improving the business climate is not an end in itself.  A better business environment is a means for the achievement of the national objective of rapid economic growth resulting in increase in the living standard of the people and reducing poverty.

Last Updated on Tuesday, 06 March 2012 21:48

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Investing in the Northern Province: Constraints and Countering Them.

From War and Destruction to Peace and Reconstruction

Both before and following the end of Sir Lanka’s 30-year separatist war in May 2009, it was recognized that rapid economic recovery in the Northern Province would be the key to lasting reintegration and reconciliation within a united country.  Nearing the two and a half year point since the cessation of hostilities, the Pathfinder Foundation (PF) examined the current pace and scope of economic development in the North, with a specific focus on private sector investment.  The premise is that rapid economic growth in the North will largely depend on the private sector, in combination with essential government investments in physical and social infrastructure and business environment policies that are tailored to the special needs in the Northern Province.

Last Updated on Tuesday, 06 March 2012 22:20

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Sustainable Solutions or Unsustainable Borrowings?

Widening Trade Deficit

Concerns regarding Sri Lanka’s trade deficit have become elevated. It amounted to $6.9 billion in the first nine months of 2011 and is projected to exceed $8 billion by the end of this year. The corresponding figure for 2010 was $5.2 billion. This represents a projected deterioration of 73.1%. This decline has taken place despite a 27.7% increase in exports ($7.8 billion) in the first three quarters of this year. However, this improvement in exports was more than offset by a 51.8% increase in imports ($14.7 billion). The upsurge in imports has been fuelled by an expansion in private sector credit. This makes it important to explore whether this combination of events was an inevitable consequence of interest rates declining at a time when the real effective exchange rate was significantly over-valued (by about 20%).

Last Updated on Tuesday, 06 March 2012 22:19

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Commendable Start: Now for the Finish

Avoiding a Crisis

The Pathfinder Foundation (PF) commends the Treasury and Central Bank for the policy measures introduced recently. This has prevented an external payments crisis. Without remedial action, the country would not have been able to meet its debt obligations and/or finance essential imports within a short period of time.  There is considerable evidence from around the world that payments crises have a devastating impact on living standards and results in political instability. The poor and vulnerable bear a disproportionate share of the pain. The actions taken are, therefore, necessary and unavoidable. The PF has called for the use of the full range of macroeconomic instruments to tackle the imbalance in the external account. It, therefore, welcomes the measures that have been taken by the authorities. They are courageous and have improved the prospects of stabilizing the economy and securing a more favourable medium-term outlook.

Last Updated on Tuesday, 06 March 2012 21:35

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Economic Alerts Introduction


As of October 2010, the PF has been issuing monthly Economic Alerts which have sought to highlight emerging economic challenges & opportunities. These Economic Alerts have gained wide publicity in print and electronic media.

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