The Sri Lankan economy: achievements, prospects, and policy issues

Abstract

This book is prepared during a pivotal period in Sri Lanka’s history—one of historic opportunity but also of daunting challenges. The country is now at peace. The peace dividend can be very large. Defense expenditure can be wound back, as it has been in recent years, and the funds so released invested in badly needed education, health, infrastructure, and rural development projects. Investors, domestic and foreign alike, can look to the future with greater optimism. Intercommunal harmony and trust can be restored. Sri Lanka can reenter the regional and international mainstream, politically and commercially. Moreover, although global economic growth is sluggish, Sri Lanka is favorably located in the most dynamic region of the world. India is now the world’s fastest growing major economy. Growth in the People’s Republic of China is slowing, but the annual increment to its gross domestic product (GDP) is as large as it was a decade ago during the period of hypergrowth. Several medium-sized economies of the Association of Southeast Asian Nations (ASEAN) continue to grow strongly