Sri Lanka advised to improve connectivity to prosperous areas

Aug 10, 2010 (LBO) – The World Bank has advised Sri Lanka to change its development approach and improve access of people to prosperous parts of the country instead of shifting economic activity to lagging regions. These measures include investment subsidies, tax rebates, local regulations, local infrastructure development and targeted investment climate reforms, such as special regulations for export processing zones. Growth can be speeded up by enabling people to seek economic opportunities, improving quality of basic services across regions, and targeting interventions to stimulate economic growth in selected lagging areas.

This can lead to “rapid and geographically inclusive” growth in Sri Lanka, said a new World Bank report called Sri Lanka: Reshaping Economic Geography: Connecting People to Prosperity.

“We argue that policy makers should not be concerned in moving factors of production but rather increasing labour mobility and improving links between lagging areas and more prosperous areas,” said Somik Lall, co-author of the study and Senior Economist, World Bank.

Economic growth has been shown to be unbalanced in geographic terms with some areas prospering and others lagging behind a