Though the mindset of entrepreneurs in the North is positively changing to engage in more economic activities, the Tamil Diaspora is still in two minds whether to invest or not, said Dean, Department of Economics, University of Colombo, Dr. M. Ganeshamoorthy.
He was speaking at the first Tamilpreneur event hosted by digital PR agency, GoodPR to celebrate diversity, promote inclusivity and foster collective growth within the Tamil-speaking business community at Hatch Works, Colombo.
He said Sri Lanka’s top political leaders must give a strong assurance to the Diaspora that their investments in the North and the East would be offered tax concessions and other benefits given to investors in the South.
A strong pledge should also be given that even in the event of a change of Government investments made by the Diaspora in the North would be safe.
“This message should be emphasised when political leaders address international events/forums and engage with political leaders of other countries,” Ganeshamoorthy said.
He said that local investment is improving in the North as the country’s economic situation is improving.
He said that 2018 was a good year for the economy where most of the economic indicators recorded an upward trend but sadly they dipped after that due to a series of negative events.
“However, we are pleased to see that these economic indicators are again on an upward trend from mid last year.”
In 2018, Sri Lanka’s Per capita GDP was USD 4,361 and the country moved up to upper middle-income country status. The per capita thereafter recorded a decline and in 2019 it slipped to USD 4,083, in 2020 to $ 3,852, in 2021 -$ 3,994, in 2022 to $ 3,354 and last year – $ 3,830 which was the level of a ‘lower middle-income country’.
Since the second half of last year, the economy showed signs of rebounding due to microeconomic stability amid softening interest rates and the easing of external sector pressures.
For the first time after 1977, Sri Lanka achieved a surplus in the BOP current account and financial account last year.
This can be attributed to the increase in remittances (close to USD 6 billion), rebound in tourism and goods exports under USD 1 billion per month while imports remained subdued.
The continued suspension of external debt services, inflow from development partners, large purchase of forex and postponement of repayment of existing credit lines also helped towards this achievement.
The World Bank too hailed the country’s success and said that Sri Lanka’s economy is on the road to recovery. However, they said that sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical.
“A continuation of the path of robust and credible structural reforms is also necessary,” he said.
The World Bank said that this involves a two-pronged strategy: first, to maintain reforms that contribute to macroeconomic stability and second, to accelerate reforms to stimulate private investment and capital inflows, which are crucial for economic growth and poverty reduction.
The panel included the Managing Director of Cliphs Trading, Arunan Vengadasalam, International Corporate Trainer, Lecturer, President of the Colombo Fashion Council and Researcher, Prassanna Pathmanathan, Entrepreneur and the founder of Archelo Lab, Ainharan Vivekananthan.
The discussion was moderated by The Training Lab CEO Shivalatha Sivasundaram.
