Sri Lanka began to shift away from a socialist orientation in 1977. Since then, the government has been deregulating, privatizing, and opening the economy to international competition. Twenty five years of civil war has slowed economic growth, diversification and liberalization, and the political group Janatha Vimukthi Peramuna (JVP) uprisings, especially the second in the late 1980s, also caused extensive upheavals.
The Mahinda Rajapakse government halted the privatization process and launched several new companies. Sri Lanka has a relatively high Human Development Index with a high literacy rate (90.1%) which are the result of universal education policies and widespread healthcare. Sri Lanka's Human Development Index and literacy rate are among the highest in the South Asian region, and infant mortality is among the lowest. Sri Lanka has 555 publicly funded hospitals.
Following the quelling of the JVP insurrection, increased privatization, economic reform, and a stress on export-oriented growth helped improve the economic performance, increasing GDP growth to 7% in 1993.
Economic growth has been uneven in the ensuing years as the economy faced a multitude of global and domestic economic and political challenges. Overall, average annual GDP growth was 5.2% over 1991-2000.
In 2001, however, GDP growth was negative 1.4%--the first contraction since independence. The economy was hit by a series of global and domestic economic problems and affected by terrorist attacks in Sri Lanka and the United States.
The crises exposed the fundamental policy failures and structural imbalances in the economy and the need for reforms. The year ended in parliamentary elections in December, which saw the election of a pro-capitalism party to Parliament, while the socialism oriented Sri Lanka Freedom Party retained the Presidency.
The government of Prime Minister Ranil Wickremasinghe of the United National Party has indicated a strong commitment to economic and social sector reforms, deregulation, and private sector development.
In 2002, the economy experienced a gradual recovery. Early signs of a peace dividend were visible throughout the economy—Sri Lanka has been able to reduce defense expenditures and begin to focus on getting its large, public sector debt under control.
In addition, the economy has benefited from lower interest rates, a recovery in domestic demand, increased tourist arrivals, a revival of the stock exchange, and increased foreign direct investment (FDI).
The largest share of FDI has been in the services sector. Good progress was made under the Stand By Arrangement, which was resumed by the International Monetary Fund (IMF). These measures, together with peaceful conditions in the country, have helped restore investor confidence and created conditions for the government to embark on extensive economic and fiscal reforms and seek donor support for a poverty reduction and growth strategy.
The resumption of the civil-war in 2005 led to a steep increase defence expenditures. The increased violence and lawlessness also prompted some donor countries to cut back on aid to the country..
Sri Lanka has also accumulated a 9.2% deficit and the central bank has not intervened since late 2006 to print more currency .
A sharp rise in world petroleum prices combined with economic fallout from the civil war led to inflation that peaked 20%. However, as the civil war ended in May 2009 the economy started to grow at a higher rate of 8.0% in the year 2010.
Sri Lanka began to shift away from a socialist orientation in 1977. Since then, the government has been deregulating, privatizing, and opening the economy to international competition. Twenty five years of civil war has slowed economic growth, diversification and liberalization, and the political group Janatha Vimukthi Peramuna (JVP) uprisings, especially the 1]
Read more about this topic: Economy Of Sri Lanka
Other articles related to "economic, economics, history, economic history":
... – 27 November 2004) was a noted South African and British economic historian ... In 1958, he joined the Department of Applied Economics at Cambridge ... During this period, other notable economic historians such as Phyllis Deane and W ...
... in 1982, Zeleza took up an appointment as a Lecturer in the Department of History at the University of the West Indies, Mona, Kingston, Jamaica where he spent two years ... At Kenyatta he taught African economic history and began his extensive research on the subject that would eventually result in his award winning book ... In January 1990 he left Kenyatta University to work on his African economic history research project, which took him to the United Nations Economic Commission for Africa in Addis Ababa ...
... This development is a clear indicator of economic prosperity among the peasants ... Early abolition of serfdom, fertile land, and close economic ties with East Prussia contributed to Suvalkija's relative wealth ...
... African Economic History Agricultural History Agricultural History Review Communisme, world history of Communism in French Economic History Review Enterprise Society The International Journal of ...
Famous quotes containing the words history and/or economic:
“Humankind has understood history as a series of battles because, to this day, it regards conflict as the central facet of life.”
—Anton Pavlovich Chekhov (18601904)
“... the living, vital truth of social and economic well-being will become a reality only through the zeal, courage, the non-compromising determination of intelligent minorities, and not through the mass.”
—Emma Goldman (18691940)