Just after Sri Lanka secured Independence the
country’s economy was favourable and export income was more than
adequate where the economy was relatively open.
There was employment and exports of tea rubber
and coconut brought in adequate foreign exchange, but with all
these prosperity in the country, Sri Lanka failed to realize to
lay the foundation to invest and diversification to take the
economy forward. He said that this trend continued for some time
but by 1955 it collapsed, until 1977.said Prof. A D V de S
Indraratne, President, Sri Lanka Economic Association who was
the guest speaker at the monthly forum for Public-private Policy
Dialogue of the Federation of Chambers of Commerce and Industry
of Sri Lanka (FCCISL) heldrecently at Trans Asia Hotel. He
spoke on "The Economy: Opportunities and Challenges and Outlook
for 2008 and Beyond.
The Key Person’s Forum is organized by the Small
and Medium Enterprise Developers (SMED) – a project of FCCISL
and Friedrich Naumann Stiftung (FNSt.).
In 1977 the economy was liberalized, open and
regulating and restrictions were taken off. Economic prosperity
was in again, but this time too the country failed to make use
of the opportunity to put the economy into a stable position.
The growth rate then reached to 8.2 percent and the unemployment
rate was halved, he added.
Though there was full growth for several years
after the liberalization of the economy in 1977. Then
again, the economy was revived around 2002.
In 2002 the growth from 1.5 percent to around 6
percent was despite the devastation by the tsunami and oil price
hikes. Even the security situation was brought under
control and the economy was resilient.
The per capita income in 2006 was recorded as
US$ 1350 and in 2007 it was recorded as US$ 1430 and further
unemployment has been declining. But what has been worrying is
the inflation which has been rising to 20 percent, despite the
tight monetary policy of the Central Bank.
Prof Indraratne said that this was the third
occasion that Sri Lanka failed to capitalize the opportunity to
take the economy to a stable position.
He said that there is some kind of
economic progress in the country, where things such as
liberation of east, development activities being launched and
the other development work as roads and infrastructure are on
He said that what was disturbing though is the
galloping cost of living and the poverty of a large segment of
people resurging. He said that they boast about the high
per-capita income, but it appeared to be high exaggerated,
because half of the population is below the poverty line and
some of their per capita income is less than US$ 250.
This is the problem that all of them have not
realized and they do not talk about equitable income
distribution among the population. He said that it was
very unfortunate that whatever the development in the country
they never seep down into the bottom line of the people – the
poor people never enjoy the benefits of all these development in
He pointed out that one third of the total
population is absolutely poor and some of them do not have basic
He said that bulk of the industrial capital is
concentrated in the Western Province.