斯里蘭卡的政策研究中心（Institute of Policy Studies, IPS）曾被評選為亞洲排名24的智庫，也是該國最知名的研究機構之一。本文作者專訪副執行長Dushni Weerakoon博士，討論斯國內戰前後的發展狀況與面臨的困境，包括社會與教育制度、人力資源發展與外資進入等議題。
Interview with Dr. Dushni Weerakoon, Deputy Director of IPS
January 29, 2015
Interview with Dr. Dushni Weerakoon, Deputy Director of IPS
January 29, 2015
Q. Please tell us about Institute for Policy Studies of Sri Lanka.
IPS is set up by an act of parliament, were being under the Ministry of Finance until two weeks ago. But we are admistratively and financially independent from government. Currently there are 30 researchers.
Although we have government treasury members, we are self-funding we get only 10 percent of our budget from treasury. 90 percent we find by our self. Mostly from outside, because we do collaborative work, with development partners, overtime we have built some relationship to get some funds Recent for were seeking financial independence, we first set up by funds from Nederland government. But in 2004, that was ceased.
We solely focus on socio- economic policies. We have captured many areas such as agriculture, trade, poverty, labor, education etc.
Our mandate really is to influence the Economic policy making, and we do that through our research findings. We often host meetings with the government officials and also with private sectors.
Q. Does Sri Lanka have a concrete development strategy?
If you look at the development strategies in Sri Lanka from late 1970s, we were fairly an open economy, mainly because we started reforms, which started in 1977/1978. In 1990/1991 what we call second wave of reform. In 1997/1998 or may be 1996/1997, we had a fairly sort of a strong privatization process. If we look beyond that period, nothing really could be seen.
Q. Was it because of the civil war?
I don’t think it was entirely because of the war. Because of the war to the extent that policy makers, their attention was focused on political side. I think it is also because of reforms are not a very popular sort of, it is very difficult to convince your general population that the economic reforms are good for them. If you look at the 1977/78 reforms, it was a big bang approach to reform, the economy was in a very bad shape. The government came to power with support of majority votes, so they could start it. Another problem is that we did not have a development strategy, and we never had strong industrialization. It was always some sort of ad hoc reforms that never tackled the economy in the holistic level.
Q. Is that because this country always tries to maintain some kind of socialist welfare system?
If you look at the name of the country, it is still “Democratic Socialist Republic of Sri Lanka”. The whole notion of socialism, welfare state still very much embedded in our thinking. If you were to push reforms, any political leader, any government, has to come up against left parties, they may not be very strong in terms of their presentation of parliament but they can put crowds on the streets, in to the streets, then we have trade unions, Our trade unions are very strong. They may be aligned to different parties, but when you try to institute public sector reforms, if want to privatize any state office, they will get on to the streets.
Similarly, in 2011, previous government tried to introduce some limited attempt to allow private investments in Sri Lanka’s free education system and they brought a bill but university students, university lecturers, all opposed it saying that free education is a guarantee then the government pulled it back. So to push through a reform effort is very difficult, but that is not to say that, we cannot push through industrialization. In that case, I think that to a large extent, why we have not had a strong industrialization strategy, of course, is because of the war. As you know, we have a limited domestic resource base, if we are talking about a real industrial push we need to have large volumes of foreign investments and with 30 years of war we cannot expect such kind of investments in Sri Lanka.
Q. Did the situations improve after the war?
Yes, situation has improved. But I think that Sri Lanka has lost the comparative advantage that we had 30 years ago when we initially liberalized , now every other countries has opened as Sri Lankan economy is, our labour costs are very high compared to even some of our South Asian countries. Compared to India and Bangladesh our labour cost is very high. I think Pakistan is somewhat similar to us. And I think competitors are more from Vietnam, Laos, Cambodia etc. So Sri Lanka is not linked with any regional value supply chain, and for us to break in manufacturing in a big way we need the comparative advantage. Though we say that we have an advantage in geographic location, but the location doesn’t matter so much.
In last 4-5 years we have seen an increase in foreign direct investments. But they have come in to development projects, condominium, shopping malls, and leisure sort of things.
Q. How do you attract other foreign visitors? What concrete strategies do you have?
The previous government attempted to develop tourism, leisure sector and all those lines. They have targeted some kind of tourist arrivals to be increased to 2.5 million by 2016, but these tourists come not only because of the beaches sort of all of that but coming for retail shopping , gambling, golf, business tourism. They were kind of modeming it. Somewhat similar to Thailand and Singapore. For tourism Sri Lanka has a lots more to offer. In Sri Lanka we have beaches, some historical places and we are one of the most bio diverse countries in the world.
We also noticed Sri Lanka has set up a number of industrial parks and Export Processing Zones (EPZ). How did they perform?
We have many Industrial parks but they are really not working. But some of the export processing zones are okay and occasional advantages are there. But by and large whatever the tax concession that you can get by being in an export processing zone, you can get from being in anywhere in the country. The EPZ, when they are first set up, were linked to tax benefits. Now in all island you can get them. And infrastructure has improved slowly over time, whether it is energy, transport etc. I think a long way to come, when it considers labour. If you talk to foreign sector, even private sector, they would say they cannot find skilled labour that we want.
Q. But you have a high literacy rates, which mean Sri Lanka can offer high skilled labors, right?
But if you cross the board, what is the main constrain in Sri Lanka‘s growth, that is skills. Though we say that we have high literacy rate, in Sri Lanka there is a rapid aging population. Because from 1930s we had free education, free health and we have achieved high development indicators, life expectancy all of that. For even now, the entrance for the labour force numbers are falling. We have unemployment rate of 4 percent. But if you look at figures, educated youth unemployment is around 17 percent. Our growth depend on how productive our labour force going to be in the future. We have very few engineers, mathematicians, IT skilled people, people who skilled in English. Bulk of our university entrants are for the Arts stream. If you talk to private sector they would say that biggest drawback of the labour is Language barrier.
Although we had some initial advantage, we did not reform and keep changing. If you take the education system, teaching methods are still based on taking down notes. It is not to develop analytical and problems solving skills.
Some reform in University Education System is necessary?
Yes, In Sri Lanka Graduate Unemployment rate is high. About three years ago , government recruited all the unemployed graduate as and they were not used productively. Some graduates have first class. Public sector is already overcrowded. Public sector wage bill along comprises a significant portion of government budget. Pension scheme of the public sector employees is also a heavy burden of the budget. However it is also difficult to the government to reform pension scheme because of some political reason.
Only recently private sectors are allowed to enter high education. There are so many collages affiliated to foreign universities however there is no quality assurance. So the Privatization Bill not only allow private sector participation but also introduce regulatory mechanism to control the quality of them. In Sri Lanka inly 7.5% of youth between 22- 24-age groups attend universities and vocational training colleges.
Q. Who are main investors Sri Lanka?
In Sri Lanka most of the investments are in service sector. Most of them are in the hotel and tourism. There is one in Telecommunication and some in IT sector. Sri Lanka has an advantage in that sector even some local companies provide IT services for foreign customers. One example is that financial services are outsourced to Sri Lanka. However when compared with India we did not have enough IT graduates
There are no many investments from Korea and Japan. When we look at FDI statistics, our foreign investments are mainly from Hong Kong. When we started our export processing, producers in the countries like Hong Kong had quota restrictions. So they came and invested in the garment sector here. They are the main suppliers of fabrics for the garment sector. Unlike in India FDI here is mainly in service sector. India has diversified their presence here. Japan is a source of imports and bilateral aid.
Q. How about Chinese investment in this country?
They are not investments. But loans except the Colombo port city project that is FDI. Chinese FDI are backed by the government not by the private sector. Some Chinese private investments may come in the future. But India and Sri Lanka have many trade agreements to include goods, services and investments and however new agreement was supposed to singed in 2008 but the government of Sri Lanka wanted some changes.
Do you think there is a strategy for this country to come out from stagnation?
We have always said what the previous government did to improve infrastructure was sensible thing. But the problem was they were relying on external financing to do that.
Because of that at some point that Sri Lank will face a kind of a crash unless development in other sectors does not follow. I emphasize the skill factor that has to be improved. That include education systems reforms, public sector reforms. We have loss making public enterprises government revenue is also just 11 percent of GDP. Because of we relying raising funds from abroad. Secondly we need labor market reforms, we have strict hiring and firing laws here.
Q. Who is in charge of economic policies of the new government?
It seems that it is in the hands of the Prime minister. However at the moment government is adopting 100 day program. So the real face of the economic policy may be found only after the parliamentary election. And it was not clear who would come to the power in the election. We are aware of the economic policies of the UNP and the Mahinda Rajapaksha Grope and we do not know the economic policies or the economic ideology of the Mithripala Sirisena. Sri Lankan case is somewhat similar to India. What Sri Lanka could do is in the future what Modi is trying to do in the India.
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