Sri Lanka economic freedoms improve: think tank

Jan 14, 2011 (LBO) – Sri Lanka has improved its score in an economic freedom index for 2011 compiled by US based heritage foundation and the Wall Street Journal, but the increasing non-tarrif barriers and state expansion has dragged the score down.

Sri Lanka improved its score by 2.5 points to 57.1 making it the 107 freest economy out of 179 countries in the index, but the score remains below 60 in the ‘mostly unfree’ category. A decade ago Sri Lanka has had a much higher score.

Sri Lanka’s improvement reflected “major gains in trade, monetary, and investment freedom. Sri Lanka is ranked 19th out of 41 countries in the Asia–Pacific region, and its score improvement is one of the 10 largest in the 2011 Index,” the Heritage Foundation said.

“Challenges to economic freedom in Sri Lanka are considerable,” the compilers said.

“The average applied tariff rate has dropped significantly, but the persistence of non-tariff barriers still adds to the costs of trade.

“A lack of transparency and a burdensome approval process continue to impede much-needed growth in private investment.

“The heavy presence of the state in the economy continues to hamper private-sector development.”

The country also had poor governance, political i