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    External Shocks and Domestic Policy Adjustment: The Case of Sri Lanka
    (The Indian Institute of the Economics, 1994) White, Howard; Kelegama, Saman
    A major methodological problem in the analysis of adjustment policies is the separation of the effects of the policies themselves from those changing external conditions. But such a separation can be clearly made by decomposing the sources of change in the current account. In this paper authors apply methodology, with a number of important modifications to the experience of Sri Lanka for the period 1971 to 1991. By extending the decomposition analysis to cover the capital account authors are able to address a further important issue in the adjustment debate: namely distinguishing the impact of external finance given to support domestic policy adjustment efforts from that of the efforts themselves.
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    Labour Absorption in Industries: Some Observations from the Sri Lankan Experience
    (1992) Kelegama, Saman; Wignaraja, Ganeshan
    Eleven years have passed since liberalization began in Sri Lanka, and yet the level of unemployment remains at about the same level as in mid-1977. Even if the export industries take time to respond to policy reforms, the fact that unemployment increased to pre-1977 levels by 1985 clearly shows that export-oriented industrialization has not been able to generate employment on a large scale. Why has this been the case? This paper attempts to answer this question by examining the labour-absorptive capacity of manufacturing and how it has changed after liberalization.
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    Indo-Sri Lanka Trade and the Bilateral Free Trade Agreement: A Sri Lankan Perspective
    (1999) Kelegama, Saman
    India-Sri Lanka trade has been growing in recent years. In the mid-1990s, India became the main import supplier of Sri Lanka. Although Sri Lankan exports to India remain small, they have been growing faster than Indian imports to Sri Lanka in recent years. The Indo-Sri Lanka Bilateral Free Trade Agreement is a further step, by removing existing trade barriers, to stimulate trade between the two nations. While trade brings benefits to both there is an import competing sector in both countries that is still not in a position to face external competition from free trade. The Agreement allows for a “negative list” to accommodate this sector but preparation of the negative list has proved to be a time-consuming and intricate exercise. Once the Agreement comes into force, the Sri Lankan export sector is faced with a challenge to produce goods that are in demand in the Indian market. The challenge may be a “warm up” exercise to face future free trade under the South Asia Free Trade Agreement (SAFTA).
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    Regionalism Debate: Repositioning SAFTA
    (2005) Kelegama, Saman; Adhikari, Ratnakar
    Critics have pointed out that there is no rationale for a Regional Trade Agreement (RTA) in South Asia because there are limited complementarities in the region; major trading partners of the individual South Asian countries are located in the West etc. The latest World Bank report on the South Asia’s trade argues that an RTA in South Asia will lead to substantial trade diversion than trade creation and considers an RTA in the region as a stumbling bloc to multilateral trade liberalization. This argument needs re-examination and for this purpose it will be worthwhile first to revisit the theoretical debate on regionalism. This is done in the Section II followed by a discussion in Section III on the South Asian perspective of an RTA. Some concluding remarks are made in Section IV.
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    SAFTA: a Critique
    (2004) Kelegama, Saman
    In this paper, an attempt is made to examine the SAPTA agreement that was signed by the Foreign Ministers of the SAARC member countries at the 12th SAARC Summit. First a brief survey is made in Section II on SAPTA. Section III then makes an assessment of the SAFTA agreement in the light of the Group of Eminent Persons (GEP) report recommendations. Section IV has some concluding remarks.
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    Ready-Made Garment Industry in Sri Lanka: Preparing to Face the Global Challenges
    (2005) Kelegama, Saman
    With the phasing out of the Multi-Fibre Arrangement (MFA), the Sri Lankan economy, highly dependent on garment exports, has become vulnerable to the changing scenario affecting this industry in the global trading system. In such a global environment, strengthening the competitiveness of the garment industry has become a sine qua non for Sri Lanka to remain one of the suppliers of choice in her major markets. The industry therefore needs to articulate new response mechanisms to address the emerging challenges. A realistic course of action should involve addressing the major constraints in both the supply and demand sides of the industry. This paper highlights these issues and suggests some strategies for coping with the new global challenges.
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    Privatization and the Public Exchequer: Some Observations from the Sri Lankan Experience
    (United Nations ESCAP, 1997) White, Howard; Kelegama, Saman
    This paper examines the Sri Lankan experience with privatization from 1989 to 1996 and argues that its short-run fiscal benefits have not been significant even when the direct and indirect costs of privatization are ignored. Fiscal gains from privatization should be considered long-term benefits and greater importance should be given to designing a transparent privatization programme to promote competition and to stimulate the capital market. Such a strategy can address the problem of the fiscal burden of subsidizing State-owned enterprises more effectively than a privatization programme that is designed for speedy execution in a non-transparent manner or one whose objective is to achieve revenue targets according to short-term budgetary needs.
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    Reconstruction and Rehabilitation of the North and East of Sri Lanka: Programmes Constraints
    (People's Bank, 2009) Kelegama, Saman
    This article is compiled based on a lecture delivered by the author at the Regional Centre for Stratergic Studies in Colombo 2009.
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    Development in Independent Sri Lanka: What Went Wrong?
    (Sameeksha, 2000) Kelegama, Saman
    Independent Sri Lanka's failure to live up to its initial promise in the area of economic development could be attributed inter alia to: (a) a foreign-exchange crisis which persisted till 1977 because the exigencies of electoral politics bound the country to welfare-oriented, inward-looking policies; and (b) the eruption of conflict between the two main communities as of 1983.
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    Sri Lankan Economy of War and Peace
    (Sameeksha, 2002) Kelegama, Saman
    The experience of economic liberalisation in Sri Lanka has coincided with the nearly 20-year long civil strife in the nation's north and east. An attempt is made here to trace the economic reform programme since the war began. For the economy to be brought back on track the cumbersome task of balancing the needs of long-term economic management with the immediate demands of the current ceasefire and peace initiatives has to be undertaken.
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    Sri Lankan Exports to India: Impact of Free Trade Agreement
    (Sameeksha, 2003) kelegama, Saman
    Since the Indo-Sri Lanka Bilateral Trade Agreement came into existence in March 2000, Sri Lankan export to India has registered a sharp increase. A disaggregated analysis shows however an unevenness which indicates the need for smoothening the trade process and regulations.
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    WTO and South Asia: From Doha to Cancun
    (2003) Kelegama, Saman; Mukherji, Indra Nath
    WTO negotiations so far have shown that when countries forge alliances they can generate synergies and become powerful players. The EU, Cairns Group and the African bloc have emerged as influential groups within the WTO. Several factors have stalled the evolution of a common position among south Asian countries: regional politics and antipathies, the economic disparity in the region, and the temptation for individual countries to draw up independent arrangements with developed countries in return for trade favours often detrimental to regional interests. Will south Asian countries function with a common agenda at Cancun?
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    Towards Greater Economic Connectivity in South Asia
    (Sameeksha, 2007) Kelegama, Saman
    To strengthen economic connectivity in south Asia, members of the South Asian Association for Regional Cooperation should not depend solely on the SAARC framework, and the agreement on the South Asia Free Trade Area. The natural market integration process that started in south Asia with the high growth in India in particular, can give an impetus to strengthening economic connectivity. The private sector in south Asia, through the SAARC Chamber of Commerce and Industry, has to play a key role as a pressure group to remove impediments for economic integration. Steps also need to betaken to not overload the SAARC agenda with soft issues so that economic connectivity issues receive due attention.
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    Sri Lankan Economy in Turbulent Times: Budget 2001 and IMF Package
    (Sameeksha, 2001) Kelegama, Saman
    Political crises and economic mismanagement are to account for the grave state of Sri Lanka's finances. While reform programmes under the aegis of the IMF promise some succour, these are accompanied by strict conditionalities. The new Sri Lankan government has thus to take some vital political decisions - negotiating with the LTTE to end the long-drawn civil strife in the north-east and implement a harsh budget that will assist a revival of the economy in the long run.
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    Open Regionalism and APEC: Rhetoric and Reality
    (Sameeksha, 2000) Kelegama, Saman
    APEC has now functioned for more than one decade but its record is not very impressive. This article argues that the operational aspects of APEC have clearly highlighted the limitations of APEC's governing framework, i e, open regionalism. The paper shows that APEC's trade liberalisation strategy is a frail initiative and argues that APEC might be better-off focusing on deep economic integration issues.
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    Indian Ocean Regionalism: Is There a Future?
    (Sameekha, 2002) Kelegama, Saman
    The Indian Ocean Rim Association for Regional Cooperation was launched to affect a quicker process of liberalisation in countries disadvantaged in one way or other in the WTO regime, so that through open regional arrangements and agreements they could all gain quickly from the transforming trade and investment environment. An assessment of its five-year existence.
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    Economic Cooperation: The Emerging Scenario
    (Institute of Policy Studies of Pakistan, 2012) Kelegama, Saman
    Considering China continuously increasing importance for the global level, increased economic cooptation between China and SAARc member countries will be mutually beneficial, particularly for the South Asia . SAARC's own success in achieving desired level of regionalism has been limited, and China's involvement can become a catalyst in this regard. While trade between China and SAARC has been increasing in recent years, the potential of economic cooptation is much more beyond trade alone. China's engagement can address some of SAARC's fundamental shortfalls such as inability to generate funds for crucial projects and no progress towards knowledge and technology transfers. Regardless of China's full membership of SAARC, its active involvement in South Asia will continue to grow. - Eds.
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    Does Leadership Matter in the Economic Reform Process? Liberalization and Governance in Sri Lanka, 1989-1993
    (Elsevier, 1997) Dunham, David; Kelegama, Saman
    Governance assumptions of the East Asian miracle may not be a sufficient or a necessary condition for effective economic reform or for solid growth to emerge in other Asian economies. This paper argues that in Sri Lanka, where the state is not strong, where it is not well coordinated, and is neither cohesive nor disciplined in organizational terms, strong political leadership proved critical in the second wave of reform from 1989-93 - even if it was essentially illiberal in the process of implementation. Technical and political imperatives are seen to be interrelated and parts of a single reform package.
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    Transforming Conflict with an Economic Dividend: The Sri Lankan Experience
    (2005) Kelegama, Saman
    Peace can generate an economic dividend, which can be further increased by appropriate economic reform. This dividend can in turn be used to raise popular support for conflict-resolution measures along the road to achieving a final political settlement, a strategy that characterizes the recent period in Sri Lanka. However, despite an increase in economic growth following the cessation of hostilities between the LTTE and the government, no substantial dividend has materialized for either government supporters in the South or LTTE supporters in the war-torn Northeast. The causes of this failure include delays in disbursing aid which would have eased adjustment to economic reforms—resulting in cuts to public spending that affected Southern households—and weak institutions that impeded the effective use of aid in the Northeast. The Sri Lankan experience highlights some important lessons for both government and donors on making use of an economic lever for consolidating a peace process and conflict resolution. It also highlights some of the dangers in relying too much on economic levers to consolidate a peace process when levels of mistrust are high.
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    Stabilization and Adjustment: A Second Look at the Sri Lankan Experience, 1977–93
    (John Wiley, 1997) Dunham, David; Kelegama, Saman
    Mainstream thinking on economic policy assumes a logical progression from stabilization to liberalization and adjustment that is rarely attainable in practice. Most developing countries have been forced to undertake them simultaneously with a resulting tension between them, and with conflicting demands being made on economic policy. This paper reexamines Sri Lankan economic performance in the 1980s from this perspective. It argues that the pristine application of theory is not an appropriate yardstick and that “economic mismanagement” is at best an incomplete explanation of what was happening. It contends that incompatible demands were at the time being made on economic policy, and stresses the importance of external shocks and the political sustainability of the reform process.
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