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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