Sri Lanka’s Competitiveness is Stagnating: Efficiency is the issue

Abstract

The 2015 Global Competitiveness Report (GCR) of the World Economic Forum shows that Sri Lanka is ranked 68 out of 140 countries. Compared to last year, Sri Lanka has improved its ranking by five places. This article provides two simple insights into the ranking of Sri Lanka in the GCR. First is that despite improvement in its ranking, the country has hardly seen improvements in its overall competitiveness score, and second, the overall competitiveness score has hardly increased because the improvements in basic structural areas are being offset by the declines in critical areas that drive the efficiency of the economy. Although Sri Lanka has made progress in the post-war challenge of consolidating its basic economic structures, the challenge ahead is to arrest and reverse the decline in the aspects of the economy that drive efficiency and innovation.