Research Team

Empowering Sri Lankan Women: Highlights from the National Policy Conference on Women’s Access to Decent Work in Sri Lanka

The Institute of Policy Studies of Sri Lanka (IPS) recently conducted a thought-provoking discussion aimed at improving women’s access to decent work in Sri Lanka. The event, titled the ‘National Policy Conference on Women’s Access to Decent Work,’ was organised in collaboration with the Partnership for Economic Policy (PEP) and Co-Impact and took place at the Dr Saman Kelegama Auditorium, IPS.

Sri Lanka’s Graphite: A Potential Player in the Global Electric Vehicle Revolution

Sri Lanka has a rich history of mining and exporting graphite, which thrived during the World Wars, hitting 35,000 metric tons in annual exports. The vein graphite produced by Sri Lanka stands out for its remarkable purity, flawless crystal structure, and strong electrical conductivity, making it suitable for various commercial uses. However, in 2023, only 2,792 metric tons were exported, yielding approximately USD 6 million in revenue. The emerging trend towards electromobility on a global scale presents fresh opportunities to revive Sri Lanka’s graphite industry. The newly established Chamber for Mineral Exporters has also emphasised the importance of well-defined policies to harness the untapped potential of the mineral sector.

Has Sri Lanka’s Crisis-driven Import Controls Incentivised Import Substitution?

In response to the economic crisis, Sri Lanka implemented import controls that expanded significantly by the end of 2022, accounting for approximately 30% of the country’s total import value. But were they necessary or the easiest option? Were they applied optimally to limit damage on growth? Did they distort incentives, thereby promoting domestic production of substitutable products? To shed light on these questions, a comprehensive analysis was conducted using eight waves of import controls. The government’s objectives varied, ranging from curbing currency outflows to promoting domestic production as import substitutes. It is crucial to assess the long-term impact on incentive structures. In this blog, the authors delve into the complexities of Sri Lanka’s import controls, providing insights into their necessity, optimal application, and unintended consequences.

Overcoming Obstacles: The Economic Case for a Sri Lanka-Thailand FTA

In 2019, only 6% of tea imported by Thailand was from Sri Lanka. This low percentage can be attributed to the difference in preferences and Thailand’s high tariffs of 90% on imported tea, which act as barriers to Sri Lanka’s tea exports. Additionally, Thailand imposes up to 30% tariffs on nearly 120 product lines of wearing apparel. These high tariffs for products with a comparative advantage are not exclusive to Sri Lanka. Thailand also faces higher tariffs for vehicles, rubber, and light-electronics exports which Thailand exports competitively. This tariff structure hampers the bilateral trade of products with a higher comparative advantage for both countries. Despite these challenges, Sri Lanka and Thailand have expedited the process of signing a free trade agreement (FTA) to boost bilateral trade by threefold to USD 1.5 billion. This article discusses the trade effect of an FTA and a way forward to maximise the gains from an FTA.

Taxing Tobacco: Why the 2023 Budget Should Increase Tobacco Taxes

Sri Lanka’s economy is at a critical juncture where urgent steps are needed to improve the country’s fiscal position. The Institute of Policy Studies of Sri Lanka (IPS) has maintained that increasing tobacco taxation has undeniable health and fiscal benefits. Among the benefits of increasing tobacco taxes are the generation of additional revenue for the government, widespread support among the public for an increase in tobacco taxation, and the reduced burden on Sri Lanka’s struggling health system. In this context, policy solutions, such as taxing tobacco which can be leveraged to boost government revenue without threatening economic growth, are essential. This blog argues that the 2023 Budget should introduce a model of indexation which automatically links tobacco taxation rises with the size of the economy and inflation. This would raise substantial additional revenue from the excise tax on cigarettes.

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