By: Staff Writer
December 13, Colombo (LNW): A year into the new administration, Sri Lanka’s economic trajectory reveals a widening gap between outward ambition and inward political practice. The IFC’s call for globally integrated, export-led growth has exposed uncomfortable truths about governance that remains cautious, defensive and overly focused on the past.
While macroeconomic stability has improved, the reform momentum expected by investors and businesses has failed to materialise. Policy signals remain mixed, regulatory changes unpredictable and decision-making heavily centralised. Ministers, instead of articulating a clear forward strategy, have leaned on a familiar narrative of inherited crises and external shocks an approach increasingly dismissed by the private sector as an excuse for underperformance.
IFC Regional Director Imad Fakhoury’s remarks underscored that Sri Lanka’s challenge is not a lack of opportunity but a failure of mindset. He argued that the country must rebrand itself as a green, sustainable and outward-looking economy, capable of attracting long-term investment and competing globally. This vision contrasts sharply with inward-looking tendencies that continue to shape policymaking, from hesitant trade reforms to administrative controls that stifle enterprise.
Sri Lanka’s ambition to expand exports, develop high-value tourism, scale digital services and modernise agribusiness depends on confidence and consistency—qualities investors say are missing. Even public-private partnerships, frequently promoted as essential given fiscal constraints, have progressed slowly due to bureaucratic caution and political risk aversion.
The IFC, which has invested heavily in renewable energy, logistics, agribusiness and financial inclusion, remains “bullish” on Sri Lanka’s potential. Yet this optimism is conditional. Fakhoury emphasised that policy predictability and a credible investment climate are non-negotiable if Sri Lanka hopes to convert opportunity into sustained growth.
The deeper concern highlighted by the IFC’s warning is leadership attitude. An inward gaze, coupled with an air of arrogance, has limited honest self-assessment within government. Instead of acknowledging policy failures and course-correcting, leaders have chosen to look backward.
Sri Lanka’s history shows that recovery without reform is temporary. The choice before policymakers is stark: embrace an outward-looking reset or risk turning a fragile recovery into another lost decade.
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