Sri Lanka slips further in global competitiveness rankings

Monday, 2 October 2017 00:22 - - {{hitsCtrl.values.hits}}

Sri Lanka has slipped to 85th place in the World Economic Forum Global Competitiveness Index (GCI) released last week, down from 71st place in the previous assessment.

The latest ranking is the lowest for Sri Lanka in recent years. In 2005 the country was placed 68th. Other South Asia nations, including Bhutan (up 15 places), Nepal (up 10 places), Pakistan (up seven places) and Bangladesh (up seven places), have improved in competitiveness. The WEF said Sri Lanka dipped mainly due to a deteriorating institutional environment, lower goods markets efficiency and infrastructure that is assessed as less well developed.

“Macroeconomic stability needs to remain a priority for the government, as the country continues to cope with high levels of debt and tries to restore a sound macroeconomic environment,” it added.

WEF acknowledged the Government managed to decrease the deficit and stabilize debt after the country entered assistance program by the IMF in 2016. Yet, the burden of interest on debt remains high and currently amounts to most of the revenue collected by government. Inflation also increased and forced the authorities to tighten monetary policy, with negative effects on credit. “Business confidence has been declining over the past two years,” it added.

Inefficient bureaucracy tops as key concerns on doing business whilst policy instability, restrictive labour regulations and Government instability/coups figure among the top five most problematic factors.

Most problematic factors for doing business

In order of seriousness

Inefficient government bureaucracy
Poor work ethic in national labor force
Policy instability
Restrictive labor regulations
Government instability/coups
Tax rates
Access to financing
Inadequate supply of infrastructure
Inflation
Corruption
Inadequately educated workforce
Tax regulations
Insufficient capacity to innovate
Foreign currency regulations
Poor public health
Crime and theft

Global Competitiveness Index Rank/137

Subindex A: Basic requirements 78

1st pillar: Institutions 77

2nd pillar: Infrastructure 85

3rd pillar: Macroeconomic environment 94

4th pillar: Health and primary education 43

Subindex B: Efficiency enhancers 90

5th pillar: Higher education and training 78

6th pillar: Goods market efficiency 83

7th pillar: Labor market efficiency 131

8th pillar: Financial market development 83

9th pillar: Technological readiness 106

10th pillar: Market size 59

Subindex C: Innovation and sophistication factors 58

11th pillar: Business sophistication 59

12th pillar: Innovation 54