The International Monetary Fund has warned Sri Lanka that its move towards self-sufficiency, through import substitutions and other trade restrictions may damage the country’s economy.

Sri Lanka's 2014 budget has seen several tax rises on imports, for example, on boats, allowing local boat makers to target fishermen with impunity and earn rents, but also pharmaceutical firms who target the sick and the old, said LBO.

Export taxes were also imposed on primary goods makers such as rubber and cinnamon, in effect penalising efficient producers who are exporting at less than global market prices.

The body’s representative in Colombo Koshy Mathai told reporters that economic autarky has consistently failed elsewhere.

"It is not a matter of opinion. It is not a matter of IMF doctrine," Mathai said.

"It is simply a matter of fact. So I think we have to be very careful when it comes to import tariffs meant to protect a whole number of different industries. The increase in export and import taxes, we think will go against the direction of trade liberalisation and competitiveness,

"We fully agree with the goal of establishing food security for a country but at the same time import substitution as an ideology is a total failure. That’s been proved in country after country for the last half century,

"It will be much more efficient - rather than from an accounting sense trying to reduce your imports in order to improve the balance of payments - much more important to promote exports in our areas of comparative advantages. And not provide artificial incentives for capital and labour and other factors of production to shift into import substitution when it may not be in the country's best interests."