Ruchir Sharma 

Pic by Kithsiri de Mel

• Visiting Rockefeller International chief says the island has bounced back and has made significant progress
• Says fares well from an investment perspective
• Asserts key for SL is recognising what will be its growth engine
• Places SL as  ‘good’ among emerging markets
• Raises concerns about the outcome of the upcoming election cycle

By Nishel Fernando

Sri Lanka has bounced back and stands firm among the top emerging economies for investment, a globally renowned investor said, as it has made significant progress in implementing key reforms. 
Commending the progress the island nation has achieved given the severity of the turmoil it faced just a year ago, Rockefeller International Chairman, Breakout Capital Founder and CIO Ruchir Sharma said that investment-wise, Sri Lanka is in a better position today.

“Generally I’d say Sri Lanka fares relatively well from an investment perspective, liquidity issues, and other things. This is a big improvement over the last couple of years. 
“The big takeaway is what happens in politics and once the political situation is stable, the key for Sri Lanka is what is going to be a growth engine,” Sharma said.

The visiting Morgan Stanley veteran shared these remarks during a public lecture held in Colombo yesterday, which was organised by the Center for Banking Studies of the Central Bank (CB).
However, concerns remain on the upcoming election cycle, he said.
“Politics is wiggling because of an election coming up so you don’t know which way the elections going to go,” Sharma pointed out.

According to Sharma’s country rules framework, also a part of his most recent book ‘The 10 Rules of Successful Nations’, Sri Lanka is ranked as ‘good’ among emerging markets. The island nation scored high in terms of inflation, currency, and sentiment. 
In terms of challenges, not falling into the ‘circle of life’ trap by moving away from reforms is one
to avoid.

“The problem is most countries are caught in what I call the circle of life, that they carry out economic reforms. When they have a crisis, then you get a revival. Once you get a revival, then complacency tends to set in, once complacency sets in, that often leads to the next crisis. Because you’ve frittered away a lot of the gains,”
said Sharma.

Meanwhile, Sharma raised concerns about wealth concentration around Colombo and the absence of another city that could compete with the commercial capital.
He also touched on the low tax revenue to GDP ratio despite having a high public expenditure which is somewhat a unique problem for Sri Lanka similar to Mexico.