Industrialization is one of the key aspects of an economy when considering economic growth. According to research, the countries that have developed the industrial sector, have also achieved the highest rates of development in the world. Most developed countries also encourage industrial development on any scale in order to assist national economies. In Sri Lanka, during the past 10 years, the industrial sector has contributed an estimated 27% to the GDP (Gross Domestic Product), taking into account minor year-on-year fluctuations. At a time where the country is grappling with the biggest economic crisis since independence, the development of local industries is one of the best ways for the nation to maximize profits and minimize the amount of money bleeding out on imports. Here are some of the industries that need to develop locally.
Industries that need to develop locally:
Agriculture and Food
The world is about to face a food shortage and Sri Lanka, with its already increasing rates of inflation, is expected to be severely affected. The UN has already started calling out for life-saving assistance for about 5.2 million Sri Lankans who have now fallen under risk of malnutrition and the inability to source other basic needs for survival. Sri Lanka has been blessed with land that can be cultivated and can produce a multitude of food crops. Developing small scale agriculture and food industries with workarounds to navigate the shortage of chemical fertilizer, will help Sri Lanka overcome the food shortage.
Manufacturing Industries
Any form of manufacturing industries, mainly apparel, and raw material producing industries need to be developed locally. One of the ways in which Sri Lanka bleeds finances is by importing raw materials from the profit that is used to export finished products. This is very clearly visible in the apparel industry. Therefore, if SMEs and even cottage industries can be developed as a first line assistance to produce the raw materials required for second line industries such as apparel factories, tea factories and so on, we can save the money that we pay to foreign parties out of the profits that we accrue.
Hospitality and Tourism
Tourism and hospitality is an industry that brought in considerable foreign currency to Sri Lanka pre-COVID. However, with consecutive lockdowns and now the economic crisis, both these industries have taken a massive hit, further cutting off forex into the country. However, Sri Lanka is a country that has tremendous potential to attract foreigners who are enthusiastic to explore the beauty of the island. Developing both the tourism and the hospitality sectors locally, will help us bring the economy back up significantly.
There are many challenges that we face as a nation right now to develop industries. There is a lack of fuel and other essentials that restrict us in what we can do. However, as the nation progresses in discussions, if potential and prevailing entrepreneurs can be empowered to maintain their industries locally, these businesses and industries will become the very foundation upon which the country can rebuild once more.
Based on the Research paper : Role of Small Industries in Economic Development of Sri Lanka: A Quantitative Aspect
