FINANCIAL CHRONICLE – A think tank based in Colombo has expressed concern over Sri Lanka’s lack of ambition and urgency in its trade, export, and foreign direct investment (FDI) initiatives, especially in light of deteriorating global economic conditions. The Centre for a Smart Future (CSF) has emphasized the need for the government to enhance the country’s trade competitiveness and accelerate reforms in these areas, warning that any further delays could have severe consequences as the global economy remains unforgiving.
According to CSF, progress has been sluggish across various sectors, coinciding with worsening global economic circumstances, ongoing trade volatility, and increasing pressures on Sri Lanka’s foreign earnings. The think tank has called for collaboration between private and public sectors to develop a more ambitious strategy moving forward.
The following is a summary of CSF’s findings: Sri Lanka’s Trade, Exports, and FDI Agenda Lacks Ambition and Urgency, Cautions Think Tank. The report highlights that delays in progress are now more consequential due to heightened global economic uncertainty. While the introduction of an ‘Export Development Plan’ has been welcomed, the think tank warns of potential gaps in its implementation. It also advocates for a more cohesive FDI strategy and the activation of the Economic Commission.
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On May 18, 2026, CSF urged the government to promptly reinvigorate and expedite reforms aimed at enhancing trade competitiveness, exports, and FDI, reiterating that delays will exacerbate challenges faced by Sri Lanka in a tough global economic landscape. One year after releasing a Policy Note that outlined eight crucial reforms for trade and competitiveness, CSF observed that advancements in most areas have been minimal, with global economic conditions continuing to decline.
The think tank highlighted that while the issues facing Sri Lanka are well-documented, there remains a lack of decisive action and ambition. It encouraged stakeholders from both the public and private sectors to collaborate effectively to create a more ambitious roadmap for the future.
CSF noted that other Asian nations have implemented coordinated institutional measures and sophisticated policies to bolster trade resilience and competitiveness, suggesting that Sri Lanka look to these examples for inspiration in crafting stronger frameworks.
In terms of trade competitiveness, CSF criticized the slow progress in opening new markets through advanced commercial diplomacy and strategic trade negotiations. Notably, the country currently lacks a Chief Trade Negotiator and a specialized office dedicated to promoting international trade. Furthermore, while the establishment of a National Export Development Plan for 2026–2030 is a positive step, CSF warned that having a strategy is not enough without effective execution. The previous National Export Strategy (2018–2022) was credible but fell short due to institutional weaknesses and inadequate financial backing—mistakes that should not be repeated.
The think tank argued that the support structures necessary for exporters to enhance their offerings, diversify, or elevate their position in the value chain are insufficient and called for an ambitious innovation support program for enterprises. Although some leading firms have succeeded in challenging international markets, many others, including medium-sized businesses, struggle to compete.
CSF also raised concerns about the lack of a strategic framework guiding FDI attraction in Sri Lanka. The country’s FDI performance over the last decade has been unsatisfactory compared to its potential and regional peers. Recent inquiries by the Committee on Public Finance (COPF) regarding the Board of Investment (BOI) highlighted the absence of a clear rationale behind tax incentives for investors, reinforcing CSF’s assertion that Sri Lanka needs a definitive strategic vision regarding the type of FDI it seeks and the sectors that present future opportunities. A data-driven and forward-thinking reassessment is crucial to identify the most suitable activities and investor types for Sri Lanka.
Finally, CSF reiterated the importance of operationalizing the Economic Commission proposed under the 2024 Economic Transformation Act. The establishment of a robust, well-resourced body with a genuine mandate to coordinate investor facilitation across government is essential for effectively managing the trade-investment relationship. If the government is hesitant to fully implement the Act, it should at the very least prioritize activating the Economic Commission, Invest Sri Lanka, and the Zones authority as standalone initiatives.
