Sri
Lanka / Economy
Sri Lanka's
traditional economy has been agricultural with rice being the
main food crop. Spices, tea, rubber and coconuts were especially
encouraged by the British under the colonial system and are still
an important part of the economy. Apart from these there were
more exotic products like precious stones and even elephants and
peacocks which were exported. However in recent years there has
been a thrust on developing new areas. One of these has been textile
and garment manufacturing which has overtaken tea as an export
earner.
Another big
export earner is tourism which has shown resilience inspite of
the dragging military conflict in the north, probably because
of the remarkable efforts of the industry and the natural wealth
of the country.
Contributing
also are Sri Lankan's working abroad-mainly in the oil rich countries
of the Persian Gulf-who reemit as much as U.S $1.5 billion annually.
The opening
of the economy to private enterprise with encouragement to invest
in key areas has led to total government disinvestment from certain
areas, achievement of self sufficiency in rice production and
setting up of large irrigation and hydro electric projects like
the Mahaweli River scheme. Several development projects today
receive IMF and World Bank assistance. The biggest stumbling block
in economic progress has undoubtedly been the Tamil war which
with the tripling of the armed forces has increased expenses on
defence to approximately 20 % of total government expenditure.
Per capita income in 1993 was US$ 465 per annum, unemployment
over 13 % and inflation over 11%.
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