Back in the early Centuries of the nineteenth and the twentieth the Sri Lanka Economy was one that was based on plantations. The country was famous for not only the production but as well the exportation of Ceylon tea, rubber, coconut and cinnamon, -this still remains as one of the trademarks in its national export.
With development of a lot of modern ports during the rule of the British Empire, the country’s strategic importance as a major trade centre was developed. In the days of the Second World War, this island has successfully hosted various significant military installations, and as well of Allied Forces.
However, one negative effect from the plantation economy was the aggravation in economic disparity and followed poverty.
During the period of nineteen hundred and forty seven to seventy seven, socialism had its strong influence on the Government’s policies on economic changes. Various colonial plantations got taken apart, with the industries getting nationalized, and the foundation of a welfare state got laid.
With this socio-economic modification, literacy, and the living standard of the Sinhala people improved significantly, but at a cost of strong beating of the complete economic condition of the nation. The economy suffered chiefly from slow growth rate, inefficiency, and lack of any foreign investment.
Hence, finally in the year nineteen seventy seven, the government formed by UNP, started to incorporate deregulation, privatization, along with high end promotion of all private enterprises. Now, that the export of coffee, sugar, tea, along with other different agricultural commodities stays important, the “Sri Lanka Economy” has got a steady move towards a much industrialized and structured economy.
The development of textiles, food processing, finance and telecommunications, the country’s economy made progress in “leaps and bounds”.
Compared to the early nineteen seventies when crop plantation was 93% of the total export, in the late nineties the percentage of total export from crops came down to only twenty percent, which decreased to a rate of only 16.8% percent in the year two thousand five, while the percentage of export in garments and textiles reached a major 63 percent of the total export.
The “Gross Domestic product” or GDP growth of Sri Lanka was at an annual rate of 5.5% in the early nineteen hundreds. There however was a natural downturn of drought along with some political instability causing loss in security affected in lowering the economic growth to a 3.8% percent in nineteen ninety six.
The economy came back with a bounce in the late nineties to two thousand, at an average rate of 5.3%.
The country saw its first recession with the year two thousand and one, resulting from issues occurring from power outages and budget downturn, with a continuous civil strife adding fuel to the fire.
The “Sri Lanka Economy” got a major revival with the end of the separatist warfare in May of two thousand nine. An immediate positive change was shown in the stock market of the country assisted by marked profits and with a message of being successful in taking its place among three of the best performing financial markets worldwide.
In two thousand three the “Colombo Stock Exchange” was reported to be in its highest peak of growth among all others worldwide, and at present the country has the maximum per capita earnings in the whole of South Asia.
About a mere 14% of the total population is below USD 1.25 of living per day.
The main economic theme of the country is its rural and suburban support from the economy, along with guarding the domestic economy from any of the external influences. Influences like the “World Bank”, the oil prices, the “International Monetary Fund”.
Although the country with its huge income rate of fourteen hundred US dollars per head is still lagging behind some its neighbors, like Mauritius and Maldives, it is quite ahead from the major giant neighbor –India.
The “Sri Lanka Economy” grew at an average rate of five percent in the nineteen hundreds, in the period of the era of “War of Peace”. In accordance with the data shared by the central bank of the country the growth in economy of the country had been about seven percent in the last financial year with a reach of twenty percent inflation.
The last disaster to hit the country was in the year two thousand four with a devastating Tsunami. The financial condition got a saving hand from the tourism influx, and aid from the foreign countries, but was majorly disrupted by the civil wars.
But with the end of war, a proper rule of the law has brought peace to the whole island.
The “New York Times” magazine has given the country the first place among thirty one others to visit in the year two thousand and ten.
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