China’s rebalancing towards consumption will have positive impacts for those looking to sell into the Chinese market, with the right products at the right price. With a booming Chinese middle-class, there could be niche markets available for Sri Lankan exporters. Overall, it will be interesting to see how China’s rebalancing pans out. The global economy’s reaction to it will certainly give a good indication of to what extent China’s economy is now ‘systemically important’ than before. But whichever side you’re on – the panda-huggers or dragon-slayers, one thing is clear – the Sri Lankan private sector and policy planners must keep a close eye on the developments in the Chinese economy.
In this article, Anushka takes a look at the current political economy developments in Europe, particularly the debt-ridden Eurozone economies. He evaluates the critical balancing act faced by them – the timing of a monetary pullback along with undertaking essential reforms. With the region still in recession and youth unemployment at an all-time high, he argues that the new European generation may not be as rich as the generation before it and this will have a strong bearing on Sri Lanka’s exports there.
Based on a new Working Paper by IPS researchers titled ‘Incentivizing Foreign Investment in Sri Lanka and the Role of Tax Incentives’, this article argues that a key medium-term challenge facing the country is to find a balance between providing a competitive tax incentives regime to attract FDI and keeping tax foregone to a minimum in order to preserve domestic revenue.
As Sri Lanka gears up for the third full budget since the end of the war, Anushka Wijesinha (Research Economist – IPS) looks at the formidable challenge for Sri Lanka’s development – finding the money to finance it. Taxation, he argues, must be a major policy priority in strengthening the capacity of the Sri Lankan state.
The Talking Economics Digest is a bi-annual publication of the IPS, which compiles the articles featured on this blog every 6 months, together with interesting ‘feature’ segments. The latest copy of the Digest (January-June 2012) was launched last week …