A Familiar Call: Protect Local, Buy Local
Earlier this month, Sri Lanka’s Science and Technology Minister made headlines calling for the protection and revival of local industries. The message was clear—our local businesses need safeguarding from foreign competition. Tariffs, subsidies, and government support are on the table. It’s not a new idea, but it arrives at a moment when the country is at an economic crossroads.(Industrial Future)
The question is: will protectionism truly revive Sri Lanka’s industries—or will it leave us stuck in the past? In a rapidly digitizing world, should we not be talking more about upskilling, innovation, and future-readiness?
Why Protectionism Feels Appealing
At first glance, the idea has merit. Protecting local firms can create breathing space—especially for small manufacturers struggling to keep up with cheaper imports. Temporary tariffs and government grants can help domestic businesses scale, hire more workers, and improve local production capacity.
It’s also about identity. “Made in Sri Lanka” has emotional resonance. People want to support homegrown brands—especially in sectors like garments, food, and furniture, where tradition still holds value. In this context, a national “Buy Local” drive seems like a positive nudge.
Moreover, amid global supply chain shocks, many countries are rethinking how reliant they should be on foreign imports. The appeal of self-sufficiency is real.
But We’ve Been Here Before
For Sri Lanka, however, protectionism is not unfamiliar territory. In the 1970s, we tried it—and the results were mixed at best.
Back then, the government imposed strict controls on imports, hoping to build local capacity. For a few years, domestic factories boomed. But soon, the lack of competition bred complacency. Products didn’t improve. Quality suffered. And most damaging of all—our industries didn’t learn how to compete globally.
By the 1980s, Sri Lanka had some of the lowest manufacturing productivity rates in Asia. Growth stagnated. Exports struggled. The economy was eventually liberalized in 1977 because the model wasn’t working.
Protectionism gave industries a crutch—but no reason to walk on their own.
A Global Glimpse: What Works and What Doesn’t
This isn’t just a Sri Lankan story. Other countries have dabbled in protectionism too—with vastly different outcomes.
Russia’s attempts to shield its tech sector in the late 1990s largely failed due to corruption and lack of innovation incentives. On the other hand, China’s industrial rise was not just about protection—it was about massive investment in education, research, and infrastructure. China protected, yes—but it also demanded performance.
India’s “Atmanirbhar Bharat” campaign is a more recent example. It promotes self-reliance while still encouraging exports and pushing firms to be globally competitive. The goal isn’t to isolate—it’s to compete on the world stage with Indian-made quality.
The key takeaway? Protection only works when it’s paired with progress.
What the Data Tells Us
Sri Lanka spends just 0.11% of its GDP on research and development, far below the global average of 2.3%. That’s a telling figure. Our industries aren’t short of effort—they’re short of support in the right areas.
Our SMEs—over 75% of our businesses—often lack digital capabilities. They struggle with outdated machinery, inefficient supply chains, and limited market access. Without investment in technology and training, no amount of tariff protection will make them globally competitive.
The World Bank also notes that Sri Lanka’s manufacturing value-added per worker is less than half that of Malaysia or Thailand. That’s not a gap we can close through protectionism alone. We need transformation.
What If We Focused on Innovation Instead?
Imagine a strategy where instead of shielding industries behind trade barriers, we helped them leap forward. What would that look like?
First, we need to invest in industry-academia partnerships—where universities and businesses collaborate to solve real-world problems. We need vocational training programmes aligned with the job market, especially in sectors like digital manufacturing, green tech, and logistics.
Second, we need to help SMEs adopt modern technologies. Government grants could be tied to tangible outcomes like automation, quality improvement, or export readiness. This isn’t about handouts—it’s about enabling progress.
Third, we need to open up export channels. Too often, Sri Lankan businesses produce for the local market only. But there’s a huge opportunity in international trade—if we help firms understand compliance standards, logistics, and branding for global consumers.
Is There a Middle Path?
Perhaps the real answer lies in balance. A hybrid model, where temporary protection is offered—but only with performance conditions.
If a textile manufacturer wants tariff protection, great—but they must also commit to adopting sustainable materials or improving product quality within a year. If an agro-processor receives a subsidy, they should show progress in packaging, shelf-life, or international certifications.
Protection can’t be permanent. It must be tied to measurable outcomes—and withdrawn if firms don’t evolve.
A Smarter Industrial Policy
Rather than blanket protection, Sri Lanka could adopt a smarter industrial policy. One that combines:
- Targeted support for innovation
- Grants and loans tied to modernisation
- Digital upskilling programmes for the workforce
- Export readiness training for SMEs
- R&D tax incentives and performance-based subsidies
This approach shifts the focus from “surviving competition” to “beating the competition.” It empowers our industries to compete with the world, not hide from it.
In Conclusion: The Real Test Ahead
Protectionism offers comfort—but comfort doesn’t build competitiveness. In a world driven by technology and innovation, Sri Lanka needs more than just tariffs and slogans. It needs a vision to transform its industries—one that supports ambition, not just survival.
The real opportunity lies in reviving our industries through transformation. Let’s protect not by hiding from the future—but by preparing our businesses, our workers, and our institutions to meet it head-on.
Because the ultimate goal isn’t just to protect what we have. It’s to build what we deserve.
