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It is noted that public and private institutions are playing a vital role in the
behavior and the efficiency of the economy. Good governance in these
sectors are considered of utmostimportance.
Sri Lanka stands at 67th under basic requirements out of 140 economies.
Property rights & intellectual property protection, Diversion of public funds,
Public trust in politicians, Irregular payments and bribes, Judicial
independence, Favoritism in decisions of Government officials,
Wastefulness of Government spending, Burden of Government regulations,
Efficiency of legal framework in settling disputes, Efficiency of legal
framework, Transparency of Government policymaking, Business costs of
terrorism, Business costs of crime and violence, Organized crime,
Reliability of police services, Ethical behavior of firms, Strength of auditing
and reporting standards, Efficacy of corporate boards, Protection of
minority shareholders' interests andStrength of investor protection are
evaluated
Second pillar: Infrastructure
Widespread and efficient infrastructure is important for guaranteeing the
real functioning of the economy. Transport system consisting of better
quality roads, railroads, ports and airports would enable the business
community to send their products to the market in timely manner and
enable the movement of labor force to their jobs without wasting time and
energy. Further, the continuous supply of quality electricity will ensure
continuous functioning of factories and work places will have a greater
impact on the economic growth of a country. Finally, a solid and extensive
telecommunications network allows for a rapid and free flow of
information, which increases overall economic efficiency by helping to
ensure that businesses can communicate and decisions are made by
economic factors taking into account all available relevant information.
Sri Lanka stands at the 64th position on the Infrastructure Pillar which
covers Quality of overall infrastructure, Quality of roads, railroads and Port
infrastructure, Quality of air transport infrastructure ,Available airline
facilities, Electricity supply, Mobile telephone subscription, Fixed-telephone
lines/100 etc.
Third pillar: macroeconomic
environment
Under the global competitiveness, macroeconomic environment considered
to be the third pillar. Macroeconomic environment is vital for businesses to
function properly. It is understood that macroeconomic stability alone
cannot increase the productivity of a country. But the macroeconomic
disorder damages economy in a big way, as we recently experienced in
Europe. A Government finds it difficult to provide services efficiently when
it has to make high-interest payments on its past debts. Unbearable fiscal
deficits, limits the Government's ability to react to business cycles. It
would be difficult for private sector to operate efficiently when inflation
rates are out of hand. In other words,an economy to grow sustainably
macro environment has to be stable.
On macroeconomic environment Sri Lanka stands at the 115th position
which comprises of Government budget balance as a % GDP, Gross
National Savings, Inflation as Annual Change Percentage, General
Government Debt as a percentage of GDP and Country Credit Rating.
Fourth pillar: health and
primary education
Health and primary education also plays a key role in the context of
competitiveness and the productivity of a country. These two factors
decide quality of the workforce. If the workforce is not healthy and not
properly educated, theycould be less productive. Workers with poor health
have higher probability to get absent and low level of education may cause
problems in production processes which will be costlier for businesses
which have a greater impact on efficiency and productivity.
Therefore, investing in health services is considered to be a serious
requirement. Additionally investing in primary or basic education will make
the workforce much more knowledgeable and in turn will affect the
productivity of a nation.
In Health and primary education Sri Lanka has reached the 43rd position
which comprises of Malaria density and business impact, Tuberculosis