Sri Lanka Case Study

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When comparing Sri Lanka to other regional lower-middle income countries, their GDP is on the lower side of the range, and Sri Lanka is not competing up to its potential on the global level in terms of exports. To become a desired higher middle-income country, Sri Lanka must focus on an expansive and diversified export basket.
Most recently recorded, Sri Lanka exports 11.5 billion USD, and imports 21.4 billion USD, resulting in a negative trade balance of 9.8 billion USD. This significant difference in exports and imports is a direct result of their exports mainly consisting of lower-value goods, like tea, garments and rubber. On the other hand, their imports mainly consist of higher-valued goods, like oil, automobiles and planes.
Their leading …show more content…

Considering the country’s location in comparison to India, they should be exporting more than just seven percent of their total exports. Presently, exports account for only 12.8 per cent of the GDP and this is far too small. In this context he welcomed the proposed trade and investments pacts with India, China, and Singapore, which will help attract investments and boost exports. More specifically, the government has discussed ETCA with India, and FTA with Singapore and …show more content…

Rubber exporters in countries such as Thailand, Indonesia and Malaysia do not face this when they export to China due to regional members but we face it and this makes our rubber uncompetitive in China, the largest rubber consumer. Therefore we request you to take steps to remove this export tax in consultation with other government agencies such as the Treasury and the Central Bank and more importantly, we urge you to expedite the coming Sri Lanka-China FTA which can help our rubber exports greatly,” he added. - This quote highlights the importance of finalizing a FTA with China; the tariff is stopping Sri Lanka from being globally competitive and should be eliminated as soon as possible. Being that China is the leader in exports for rubber tires, Sri Lanka needs liberalize trade with China, in hopes of adding value and increasing productivity to their rubber

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