Public Lecture #2 Prof Prema-Chandra Athukorala on FDIs and Manufacturing for Export

Held on 18 August 2016 at the Excel World Auditorium, this was the second instalment in Advocata’s inaugural “Fixing the Sri Lankan Economy” public lecture series, featuring Prof. Prema-chandra Athukorala, an economics professor at the Australian National University, international trade expert, and member of Advocata’s own board of advisors. His lecture, “Foreign Direct Investment and Manufacturing for Export: Emerging Global Patterns and Opportunities for Sri Lanka,” was moderated in its Q&A session by Anushka Wijesinha, then Chief Economist at the Ceylon Chamber of Commerce. Drawing on his own extensive research into Sri Lanka’s manufacturing export history, Athukorala made the case that the country’s 1977 liberalisation reforms had genuinely succeeded in transforming Sri Lanka from a classical colonial-era export economy dependent on plantation crops into one where manufacturing played a significant role — but that this transformation had been badly undercut by decades of civil conflict and inconsistent macroeconomic policy that deterred the kind of stable investment climate needed to attract export-oriented FDI. The main highlight was his framing of global production sharing — the way manufacturing has been broken up into internationally distributed supply chains rather than concentrated in single countries — as both the central opportunity and the central test for Sri Lanka’s future: the country needed to plug into these global value chains as other Asian exporters had done, and the barrier to doing so was not a lack of manufacturing capability but the political and macroeconomic instability that had scared off exactly the kind of FDI needed to make that leap.