Export Promotion and Import Substitution: From Ideology and Prescriptions to Economic Reality and Pragmatism

In recent days, following the Budget Speech, there has been much discussion about the relative merits of import substitution. There has been pressure from some quarters for protection for specific goods. This tends to reflect the narrow interests of specific vested interests which do not take into account the broader interests of the economy, consumers or even other producers of goods and services for local or export markets. It is important to address the relative merits of exports and import substitution pragmatically, taking into account historical experience in Sri Lanka and abroad.