The 13th Parliamentary General Election saw the finale on 2 April 2004. It was the most peaceful election that Sri Lanka ever experienced during the last two decades. No curfew was imposed, as it was not necessary to maintain the law and order, even though it had been the case in the past to enforce curfew immediately after an election. If the trend continues, citizens can be happy of the glimpses of political maturity in the future political context of the country. The last General Election mark the momentum of the people’s choice which seriously depicted the high voter rate turnout of 71.9 per cent, even though this is lower than that of the previous two elections. The highest voter rate turnout of 95.2 per cent was recorded in the 10th General Election held in 1994 by which President Chandrika Bandaranaike Kumaratunga’s People’s Alliance government came to power. This year election also pictured the people’s desire for peace and progress of the country. The elections manifestos were presented to the public by political parties and all manifestos consisted many pledges relating to economic, social and political aspects of the country.

Regardless of their political affiliation, it is crystal clear that many wanted to have decent long-lasting peace and economic progress for the country in the years to come. What ever the political pledges made in the manifestos, it is important to look back on the past performance of different governments and to analyse in order to form a judgement on the future performances of the elected government. Economic progress of a country does not depend only on short term political decisions, but some economists’ tend to think that politicians dominate decision taking process in the short-run while economists’ (rather economic fundamentals) dominate in the long-run. In Sri Lanka, two major political parties, centre right United National Party (UNP) and the centre left United People’s Freedom Alliance (UPFA), ruled the country since independence in 19481. The economic interests and political ideology of these regimes were directly responsible for the economic progress and governance of the country and for the many significant transformations in the economy and political structure. According to Prof. W. D. Lakshman, "since independence, the country has been an experimental ground for a series of economic policies which derived from wide range of theoretical and ideological positions adopted by the major political parties."

Given the background, this article concentrate on assessing past economic performances of different political regimes, in order to get an insight into the possible future development of Sri Lanka. Historical performances may not describe or determine the future development of the country, but it may effect the formation of direction for future expectation.

Sri Lankan had the opportunity of enjoying universal franchise for the first time in 1931, perhaps the first country in Asia, after gaining independence from our colonial masters United Kingdom. The first Parliamentary General Election was conducted in 1947 and 95 members were elected to form the first Parliament to run the independent Sri Lanka. Fourteen General Elections were held since then with ballots not by bullets. Since independence the country had identifiable policy regimes directly affecting development achievements. Political regimes and development performance in Sri Lanka are inseparable. Based on these ideological positions, classifications made the policies of the regimes highlighting their salient features. Table 1 below reveals the comparative economic performance of different political regimes.

Source: Complied by the author using data from the Annual Report 2002 of Central Bank of Sri Lanka

Notes:

(a) The data for the first and the last UNP regimes are from 1950-1956 and 2001-2002, respectively.

(b) The Mahajana Eksath Party (MEP) was a coalition comprised of SLFP, CP or Viplovakari LSSP (VLSSP) and Bhasha Peramuna.

(c) The United Front (UF) consists of the Sri Lanka Freedom Party (SLFP), the Lanka Samasamaja Party (LSSP), and the Communist Party (CP).

(d) The Peoples Alliance (PA) is a coalition led by the SLFP and including the LSSP, the CP, the Sri Lanka Mahajana Party, the Democratic National United Front, and the Deshavimukthi Janatha Party.

(e) The UNP ruled the country until March 2004 even though data were taken up to 2003.

(f) Overall average for foreign reserve is not for the whole period.

(g) Expenditure on health is given in parenthesis.

Since 1950, the economy of Sri Lanka grew at an annual average of about 4.2 per cent with commendable achievements in the social sector. The growth rate varied over the five decades with different political regions. The centre right regime registered 4.4 per cent growth against 3.5 per cent growth by centre left regime. The UNP managed to achieve an economic growth of 5 per cent, the highest average for any political regime in the last half of the century. Higher economic growth during the centre right regime can be attributed to its higher investment share of 24.16 per cent of GDP over 20.81 per cent of GDP for the centre left. It is interesting, however, to note that savings of the former regime (13.38) is lower than that the latter (14.98).

The average annual budget deficit for the 1950-2002 period (before grants) was 8.29 per cent of GDP, while for the centre left and centre right, they were 7.0 per cent and 9.03 per cent respectively. Since 1977, under two UNP regimes up to 1994, the budget deficit had reached an unsustainable level and the need for rapid economic reforms became evident. In 1988, the budget deficit reached 15.7 per cent of GDP and by July 1989, the size of the deficit signalled the need to introduce a strong stabilization programme. The resulting July stabilization programme had, as its major objective, the reduction of the deficit. Consequently, the deficit fell to 9.41 per cent for the second half of the 1990s or mainly during the PA regime. Major part of the budget deficit during the UNP periods was financed by foreign sources, which consist mainly of foreign borrowing with the remainder in the form of grants.