14 February 2020 09:50 am Views - 236
While commending President Gotabaya Rajapaksa’s Independence Day remarks with regard to his commitment to ensure political and economic freedom of Sri Lankan citizens, Colombo-based free-market think tank, Advocata has come out with three key recommendations that may allow President to keep his pledge.
Advocata proposes to replace Sri Lanka’s complex tariff system with low and uniform tariff rate and calls for the implementation and improvement of the National Single Window for trade, which will allow all parties involved in trade and transport to lodge standardized information and documents at a single-entry point to fulfil all import, export and transit-related regulatory requirements.
As the third recommendation, the think tank stresses the need to reform the country’s archaic Customs Ordinance.
According to the National Export Strategy, a new Customs Act, which is in line with international standards for trade facilitation, has been drafted but this hasn’t progressed beyond this stage.
Sri Lanka currently ranks 104 out of 162 countries for economic freedom, according to Economic Freedom of the World Index 2019. This is a seven step drop from last year’s ranking of 97.
Economic freedom is the degree to which policies and institutions of countries are supportive of economic freedom.
The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately-owned property.
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Comparatively, Hong Kong and Singapore occupy the top two positions in the Index. The Index also concludes that nations that are economically free outperform non-free nations in indicators of well-being.
For example, nations in the top quartile of economic freedom such as Hong Kong, Singapore and New Zealand had an average per-capita GDP of US$ 36,770 in 2017, compared to US$ 6,140 for bottom quartile nations like Sudan, Libya and Venezuela.
Sri Lanka’s rank in the indicator ‘Freedom to trade internationally’ is alarmingly poor, ranking 113 out of 162 countries.
When governments impose restrictions that reduce the ability of their residents to engage in voluntary exchange with people in other countries, economic freedom is diminished. Not only does Sri Lanka enforce exorbitant taxes on imports, trade facilitation in the country is also poor.