Dec 20, 2011 (LBO) – Sri Lanka should strengthen relations with the West and India and expand economic freedoms to boost foreign direct investments and exports, an economist who is a specialist in international trade said.
“There is every argument to diversify exports,” Sally said. “That should be done with utmost vigor. But it will still not be a substitute, given how important Western demand is to Sri Lanka and the rest of the emerging world.”
He said Sri Lanka should also build stronger relations with India because prospects were better due to its proximity rather than China.
“There is every reason to have very good economic and commercial relations with China but prospects of doing well in Chinese markets are less than India and other markets closer by,” Sally said.
“In terms of diversifying exports the next priority has to be India, given its geographical proximity,” Sally said.
“This particularly means closer links with the South Indian economy including Sri Lanka’s Tamil neighbor in Tamil Nadu.
“There is of course a political complication in here. There is perhaps a chauvinistic reflex action that is against pursuing this kind of action.”
Sally said Taiw