Sri Lanka needs better transport, credit access to benefit from trade: study

June 04, 2008 (LBO) – Sri Lanka needs to improve access to markets through better transport infrastructure and access to credit to take advantage of opportunities presented by trade, a new study on the trade-poverty nexus in the island says. A major feature of the trade-poverty nexus in the island has been the uneven growth between regions, according to the study by researchers at the Institute of Policy Studies (IPS).

The capital Colombo and the surrounding western province developed rapidly due in part to access to international markets through the Colombo port and airport, it says.

Poverty in the western province has fallen sharply, while more rural regions have not had as much success in reducing poverty.

Past policy measures like encouraging garment factories to shift to rural areas by giving tax benefits have had only limited success with 72 percent of factories still being based in the western province.

"This example stresses the importance of improving access to international markets in order to benefit from trade," says the study, presented at an international conference on the trade-poverty nexus in South Asia organized by the IPS and Friedrich Ebert Stiftung, Colombo last week.

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