There was a time, soon after independence, when Sri Lanka’s economy was on par with the East Asian region. During the 1960s Sri Lanka was the third richest country in Asia in terms of Per Capita GDP, placing Sri Lanka behind Japan and Malaysia. Sadly, it is not the case anymore. In fact, Sri Lanka is nowhere near the ‘rich’ category.
On the other hand, countries like India had made great strides despite their own problems and regional competition. Professor of Economics at the University of Colombo, K. Amirthalingam said Sri Lanka’s economic growth at the time was far better than the likes of South Korea and Singapore.
It was a time when several countries including Singapore adopted the Sri Lankan development model. But 60 years later the roles have reversed and Sri Lanka is now looking to adopt Singapore’s model for development.
Today South Korea is a member of the Organisation for Economic Co-operation and Development (OECD), India and China are on their way to become two superpowers in the region, while Sri Lanka languishes in the category of lower income level countries.
“Sri Lanka’s growth rate was below five per cent from 1951 to 2015,” he said. What went wrong? When the British left Sri Lanka in 1948, Sri Lanka would have had high hopes for her future. We wouldn’t need to depend on any country. Though she is just a small island in the Indian Ocean, Sri Lanka’s geographical location proved to be a bonus for the country, as she is placed in a strategic location near major sea lanes.
When Sri Lanka gained independence from the British in 1948, Sri Lanka was well equipped to continue from where the British left off. Sri Lanka’s transportation system has had a facelift under the colonial rule where the railway network was established and more roads constructed to connect the coast to the hill region. But then Sri Lanka was left to fend for herself.
According to Prof. Amirthalingam, Sri Lanka did manage to be competitive for a few years after independence until its performance declined. He pointed out that Sri Lanka’s inconsistent economic policies adopted by successive governments after 1956 led to the country’s downfall.
“After 1956, Sri Lanka changed the economic policy several times. At one point it would adopt a closed economic policy and then once the other government comes into power, it adopts an open economic policy. Such inconsistencies have had a severe impact on Sri Lanka,” he said.
However, apart from the inconsistent economic policies, Sri Lanka was plagued by a much larger crisis in the form of ethnic strife. The war which lasted for 30 years had a huge impact on the country’s economic growth. Even though Sri Lanka adopted an open economic policy by 1977, the war which started a few years after discouraged other countries from investing in Sri Lanka.
“Sri Lanka lost out on many investment opportunities to Malaysia. Countries did not want to invest in Sri Lanka amidst a hostile environment,” he said. Amirthalingam also mentioned of the large amount of money allocated for defence in the annual budget allocations.
“In addition, even the local resources were diverted towards defence and addressing the conflict. Even now, the government continues to allocate a large percentage for defence,” he added.
The Northern and Eastern provinces of Sri Lanka contributed little or nothing towards Sri Lanka’s economic progress during these 30 years of war. The 30 years saw many youths leaving the country out of fear, and uncertainty for their future. The brain drain caused by the exodus also resulted in Sri Lanka not being able to compete with the countries in the South Asian region.
Sadly, 69 years down the line, Sri Lanka is still dependent. Today, Sri Lanka continues to struggle to improve its economy. While we import almost everything, from food to soft toys, Sri Lanka’s exporters too face a lot of hardships. Instances such as the ban on fish exports to the European Union, losing the GSP plus trade concession had taken its toll on local exporters resulting in losses worth millions.
On the other hand, Sri Lanka’s failure to address several social issues including the caste systems that continue to be followed especially in the rural villages of the country.
The failure to address such issues continues to prevent certain segments of the society from mobilising and socialising. Secluding individuals and communities based on caste, sexual orientation, disabilities, and diseases, pushes Sri Lanka further behind when other countries in the region, including India are in the process of making strides in doing away with such social issues.
In a world where people of all communities share common platforms physically and digitally, it is important for Sri Lanka to ensure that everyone gets equal opportunity in life.