Resource information
Sri Lanka is in many respects a
development success story. With economic growth averaging
more than 7 percent a year over the past five years on top
of an average growth of 6 percent the preceding five years,
Sri Lanka has made notable strides towards the goals of
ending extreme poverty and promoting shared prosperity (the
‘twin goals’). The national poverty headcount rate declined
from 22.7 to 6.7 percent between 2002 and 2012/13, while
consumption per capita of the bottom 40 percent grew at 3.3
percent a year, compared to 2.8 percent for the total
population. Other human development indicators are also
impressive by regional and lower middle-income country
standards. Sri Lanka has also succeeded in ending decades of
internal conflict in 2009 and steps have been taken towards
reconciliation. Sri Lanka’s has had impressive development
gains but there are strong indications that drivers of past
progress are not sustainable. Solid economic growth, strong
poverty reduction, overcoming internal conflict, effecting a
remarkable democratic transition in recent months, and
overall strong human development outcomes are a track record
that would make any country proud. However, the country’s
inward looking growth model based on non-tradable sectors
and domestic demand amplified by public investment cannot be
expected to lead to sustained inclusive growth going
forward. A systematic diagnostic points to fiscal,
competitiveness, and inclusion challenges as well as
cross-cutting governance and sustainability challenges as
priority areas of focus for sustaining progress in ending
poverty and promoting shared prosperity.
