Sri Lanka is at a defining moment in its history. The end of Sri Lanka’s 27-year conflict has opened the possibility of a new period of sustained peace and prosperity. Despite the conflict, the 2004 tsunami and the impact of the global recession, the country has achieved middle-income status. With a land area of 65,610 square kilometers and a population of 20.3 million, Sri Lanka achieved a score of 0.691 on the 2011 Human Development Index, ranking 97th out of 187 countries, the highest in South Asia. Sri Lanka’s HDI value for 2012 is 0.7151 placing the country in the high human development category for the first time and positioning the country at 92 out of 187 countries and territories. Sri Lanka is well positioned to achieve the Millennium Development Goals (MDGs) by 2015.
The National Development Policy Framework Vision, Mahinda Chintana 2011-2016, recognizes that Sri Lanka cannot rely on economic growth alone. The country also has to ensure that its people have equitable access to infrastructure, services and economic opportunities so they can take full advantage of the fruits of public and private investments. The Government’s aim in the Mahinda Chintana is to preserve Sri Lanka’s cultural values and traditions while developing a knowledge-based economy with better living standards for everyone.
Sri Lanka has a recorded history of over 2,500 years with diplomatic ties and trade with other countries. For the most part, ancient Sri Lanka was ruled by kings with a self-sufficient village based economic system. The country boasts of irrigation works that compare with the most modern in terms of scientific construction and hospitals that pre-date the birth of western medicine. Sri Lanka was later colonized by the British, and remained so until gaining independence in 1948.
Economically, agriculture – in particular, paddy and chena cultivation – has been a dominant sector, and continues to be the main source of income for many. The plantation sector gained prominence towards the latter part of the 19th century, with Sri Lanka known for its production and export of tea, rubber and cinnamon. The free market economy was introduced in the country in 1977. Today, Sri Lanka’s major economic sectors include tourism, clothing and textiles, while the country’s economy has also seen significant contributions from other sectors such as industrial exports and telecommunication. Politically, Sri Lanka was the first country in South Asia to introduce adult suffrage in 1931. Sri Lanka has a multi-party system and is governed by a semi-presidential system, consisting of the Executive, Legislative and the Judiciary. The country is divided into nine provinces and 25 districts, with each district being administered under a District Secretariat. The districts are further subdivided into divisional secretariats and to Grama Niladhari divisions.
Nearly three decades of conflict in the Northern and Eastern provinces of Sri Lanka as well the tsunami that hit the Indian Ocean in December 2004 shaped much of the country’s modern history. Yet, despite the conflict, Sri Lanka’s GDP per capita grew on average by 4% per annum between 1990 and 2009. Even though the country witnessed a decline in GDP growth in 2009 (to 3.5%), the economy has picked up largely due to the cessation of the war, increased agricultural production in the Northern and Eastern Provinces, the growth of the tourism sector (60% increase in 2011 compared with 2010) and increased Government spending on reconstruction. Sri Lanka’s GDP grew by 8% in 2010 and 8.3% in 2011, while it has grown between 6.7% and 7.2% in 2012.
The Government’s National Development Framework, the Mahinda Chintana details the development plans and progress envisaged for Sri Lanka. It highlights that by 2020, every Sri Lankan family will enjoy decent and healthy living conditions in culturally vibrant, multi-lingual, environmentally sustainable and economically productive human settlements.
After nearly three decades of conflict, Sri Lanka is well poised to significantly accelerate human development over the coming years. In January 2010, Sri Lanka achieved a middle-income country status, and has done well, with the highest Human Development Index rank in South Asia in 2011. It has strategically exploited development opportunities and or utilized its resources well, despite formidable obstacles. The country has achieved relatively high human development for a developing country, based on basic human development measures, and is at the edge of a new stage of development. In 2011, the GDP grew by 8.3% but is forecast to decline to 7.2% in 2012 before rebounding to 8%+ for the medium term. The Household Income and Expenditure Survey (HIES) of 2011 indicated the national poverty rate had fallen from 15.2% in 2006 to 8.9% in 2010. This reflected a significant reduction in poverty in all sectors: urban (6.7 to 5.3%), rural (15.7 to 9.5%), and the tea plantation community (32 to 11.4%).
The Government’s National Development Framework, the Mahinda Chintana, identifies three central areas of focus: achieving more equitable development through accelerated rural development, accelerating growth through increased investment in infrastructure and strengthening public service delivery. The State is to play a critical role in delivering this new agenda – especially in lagging and emerging regions – as well as meeting the other imminent development challenges.
Although Sri Lanka is on track towards achieving the MDGs, the country still faces many challenges. It has persistent disparities across regions and between social groups also highlighted in the 2012 National Human Development Report. Uva, Central and Sabaragamuwa provinces, in particular, which include many of the plantations, still suffer from high levels of poverty, hunger and malnutrition. Therefore, improvements are necessary at the sub-national levels, otherwise, inequality will remain a major factor holding back continued human development.
Sri Lanka’s achievements in health and education are remarkable, yet, sub-national disparities present in these sectors. Key health issues encompass poor nutrition, along with the need to improve good quality and comprehensive health services in deprived locations and reorganize the health system to respond to non-communicable and other emerging diseases. In addition, addressing the special health needs of the elderly, disabled persons, and people in conflict-affected areas remains a challenge.
On the education front, access to basic education for the most deprived population groups need to be increased, while there is also a need to improve the quality and relevance of tertiary education and vocational training and prepare workers with the advanced skills set that a competitive economy demands.
Employment challenges include mismatches between the competencies of graduates and the demands of the labour market. High unemployment prevailed among young people, women and the educated in general. Heavy dependence on agriculture for employment continues especially outside the western province even as agricultural productivity remains low.
Despite having led the region with regard to women’s indicators on education and health, there is still much more to be done to advance women’s economic and political participation. For example, even though the overall unemployment rate has fallen to 4.2% by 2011, the rate for females remains high at 7.0% compared to 2.7% for males. Women’s political participation remains low, even in comparison to other countries in the region, with only 5% of MPs being women. These figures are even lower in sub-national Government. Gender-based violence remains a major issue that needs to be addressed.