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Trade facilitation reform in Sri Lanka can drive a change in culture

Marcus Bartley Johns's picture

Two years ago, we started counting how many Sri Lankan agencies were involved in trade facilitation processes such as issuing permits and managing the movement of goods in and out of the country.  We counted at least 22 agencies in this assessment, and today, the Department of Commerce estimates that number at least 34 agencies are involved in issuing permits or publishing regulations that affect trade.
 
We know trade is critical to Sri Lanka’s future and that there are strong links between trade, economic growth and poverty reduction.

However, the trading community reports a lack of transparency, confusion around rules and regulations, poor coordination between various ministries and a dearth of critical infrastructure—you can see why trade has suffered in Sri Lanka.

 

When the World Bank evaluates a country’s performance in critical rankings like Doing Business, the ease of trading across borders is one of the benchmarks we consider. In this, and in other lists like the Logistics Performance Index, Sri Lanka is underperforming compared with its potential. Here, the average trade transaction involves over 30 different parties with different objectives, incentives, competence and constituencies they answer to, and up to 200 data elements, many of which are repeated multiple times. This environment constrains the growth of Sri Lanka’s private sector, especially SMEs.  
 
But now for the good news. By ratifying the World Trade Organisation Trade Facilitation Agreement, Sri Lanka has signalled its determination to intensify reform efforts.

Towards a clean India

Guangzhe CHEN's picture

When Prime Minister Narendra Modi launched the Swachh Bharat Mission in 2014, it marked the beginning of the world’s largest ever sanitation drive. Now, a 2017 survey by the Quality Council of India finds that access to toilets by rural households has increased to 62.45 per cent, and that 91 per cent of those who have a toilet, use it. Given India’s size and diversity, it is no surprise that implementation varies widely across states. Even so, the fact that almost every Indian now has sanitation on the mind is a victory by itself.

 Guy Stubbs

Achieving a task of this magnitude will not be easy. Bangladesh took 15 years to become open defecation free (ODF), while Thailand took 40 years to do so. Meeting sanitation targets is not a one-off event. Changing centuries-old habits of open defecation is a complex and long-term undertaking.

Pending homework: More teachers who inspire

Jaime Saavedra's picture

In India, Jaime spoke to teachers who have dedicated their lives to the education of students with special needs at the Dharabi Transitional Municipal School Corporation College. (Photo: Marcela Gutierrez Bernal/ World Bank)


Last Wednesday, the World Development Report 2018, Learning to Realize Education’s Promise (WDR) was released. It argues that there is a learning crisis: in many developing countries, children learn very little, educational opportunities are unequal, and educational progress is still very slow. What do we need to change this? We need prepared learners, who receive adequate nutrition and stimulation in their early years. We need well managed schools that create an environment conducive to learning. We need adequate inputs so that schools can operate effectively. But above all, we need motivated and well-prepared teachers. In classrooms around the world, white boards and screens have replaced black boards and notebooks are increasingly commonplace. But in this 21st century, with increased use of technology, there is one constant that determines, more than anything else, whether children learn at school: teachers. Indeed, teachers remain central to the classroom experience. And yet in many countries, the teaching profession needs attention and reform.

Chart: An Over 30-Fold Increase in Turkey's Power Generation Capacity

Tariq Khokhar's picture

Since 1970, the electricity generation capacity of Turkey has increased more than 30-fold to reach 70,000 MW in March 2015. In a country of nearly 80 million people, demand for electricity has risen about 7 percent annually in recent years, requiring steady efforts to expand the sources of reliable and clean power. Starting in the early 2000s, through a series of interlinked measures supported by the World Bank Group, the country has worked to meet this growing demand, while spurring private-sector investment and innovation. Read more.
 

Update from Iran: Iran’s Over-Education Crises

Amin Mohseni-Cheraghlou's picture
Victor Jiang | Shutterstock.com - A university student in Naqsh-e Jahan Square

Every year, Iranian schools and universities are in back in session on the first day of autumn—September 23rd. Despite educating some of the world’s top minds, such as the late Maryam Mirzakhani, the only women recipient of the Fields Medal, the most prestigious award in mathematics, Iran’s educational system has been in crisis. In this short space, I want to focus on the crisis Iran’s higher education system has been facing, which has taken a turn for worse in the past decade.

Weekly links October 6: A Bridge too far for Jishnu, reducing recruiting information frictions, cash transfers in Niger, improving tax collection in Brazil, and more…

David McKenzie's picture
  • On the future development blog, Jishnu Das discusses recent experiments on public-private provision of education in Liberia and Pakistan, takes on Bridge Academies, and highlights the importance of good measurement: “in Liberia, Romero et al. tracked students to ensure that schools could not “game” the evaluation by sending weaker children home: “We took great care to avoid differential attrition: Enumerators conducting student assessments participated in extra training on tracking and its importance, and dedicated generous time to tracking. Students were tracked to their homes and tested there when not available at school. Finding children who have left a school is like finding a needle in a haystack. In a country where only 42 percent have access to a cell phone, it’s heroism.”
  • On Straight Talk on Evidence, James Heckman and co-authors get taken to task for torturing data to overstate findings in a 2014 Science article on the long-term effects of the Abecedarian ECD program. Specific criticisms on sample size (and its reporting) and multiple comparisons. Response and a rejoinder follow the post...

Securing a prosperous future for Afghanistan amidst challenges

Christina Wieser's picture
 Rumi Consultancy/ World Bank
According to a recent report, just over half of Afghan children attend primary school and most of them were boys. Photo Credit: Rumi Consultancy/ World Bank


Fueled by unprecedented levels of aid, literacy, school enrollment, and access to basic services, Afghanistan made tremendous progress between 2007–08 and 2011–12. However, declining aid and increasing conflict during the period between 2011–12 and 2013–14 slowed progress, especially on education and maternal health outcomes, as documented by our recent World Bank report, the “Afghanistan Poverty Status Update: Progress at Risk.”

In this blog, we look at how Afghanistan has performed across several important development indicators in the last few years.

A school called Eucalyptus where a tutoring program promotes Citizenship Skills

Simon Thacker's picture


The Lycée Eucalyptus, a high school in Nice, France, sits close to the airport, surrounded to the west and north by a resolutely working-class neighborhood and by a more middle-class area to the east. The school has a heterogeneous group of students who stay for the most part to themselves. So, for a working relationship to form between Marwan, 12, a Syrian refugee, who has only been in France a few months and speaks little French, and Charlotte, 17, the captain of the girls’ tennis team, is quite remarkable.

Six reasons why Sri Lanka needs to boost its ailing private sector

Tatiana Nenova's picture
 Joe Qian / World Bank
A view of the business district in Colombo. Credit: Joe Qian / World Bank

Sri Lanka experienced strong growth at the end of its 26-year conflict. This was to be expected as post-war reconstruction tends to bring new hope and energy to a country.
 
And Sri Lanka has done well—5 percent growth is nothing to scoff at.  
 
However, Sri Lanka needs to create an environment that fosters private-sector growth and creates more and better jobs. To that end, the country should address these 6 pressing challenges:

1. The easy economic wins are almost exhausted

For a long time, the public-sector has been pouring funds into everything from infrastructure to healthcare. Unfortunately, Sri Lanka’s public sector is facing serious budget constraints. The island’s tax to growth domestic product (GDP) ratio is one of the lowest in the world, falling from 24.2% in 1978 to 10.1% in 2014. Sri Lanka should look for more sustainable sources of growth. As in many other countries, the answer lies with the private sector.
 
2. Sri Lanka has isolated itself from global and regional value chains 

Over the past decades, Sri Lanka has lost its trade competitiveness. As illustrated in the graph below, Sri Lanka outperformed Vietnam in the early 1990s on how much of its trade contributed to its growth domestic product. Vietnam has now overtaken Sri Lanka where trade has been harmed by high tariffs and para-tariffs and trade interventions on agriculture.


Sri Lanka dropped down by 14 notches to the 85th position out of 137 in the recent  Global Competitiveness Index.
           
3. The system inhibits private sector growth

Sri Lanka’s private sector is ailing. Sri Lankan companies are entrepreneurial and the country’s young people are smart, inquisitive, and dynamic. Yet, this does not translate into a vibrant private sector. Instead, public enterprises are the ones carrying the whole weight of development in this country.
 
The question is, why is the private sector not shouldering its burden of growth?


From the chart above, you can see how difficult it is to set up and operate a business in Sri Lanka. From paying taxes to enforcing contracts to registering property, entrepreneurs have the deck stacked against them.
 
Trading across borders is particularly challenging for Sri Lankan businesses. Trade facilitation is inadequate to the point of stunting growth and linkages to regional value chains. The chart explains just why Sri Lanka is considered one of the hardest countries in the world to run a trading business. Compare it to Singapore–you could even import a live tiger there without a problem.


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