Sri Lanka’s recent ban on imports should be reversed as it would hurt small businesses which are already badly hit and create distortions in the economy and should be addressed by tigher monetary and fiscal policy, Advocata Institute, a Colombo-based think tank said.
“The proposed import ban will put a significant number of businesses that are dependent on imports in a difficult situation,” the statement said.
“The most crucial impact will be on Micro, Small and Medium Enterprises dependent on imported inputs for their production process.
“The livelihood of street vendors, businesses dependent on selling raw materials and the construction and apparel industries will face severe hardship as a result of these import bans.
“Also affected will be Sri Lanka’s tech industry as a result of the ban on the importation of electronic equipment.
Foreign exchange shortages must be addressed to tighter macro-economic policy.
“These arise from macroeconomic imbalances and must be addressed through tight monetary and fiscal policy,” Advocata said.
“Better monetary policy is already showing results, fiscal policy must follow suit.”