Nimal Sanderatne’s Review of Lanka’s Economic Performance over 71 Years

Nimal Sanderatne, in Sunday Times, 3 February 2013, where the title reads  Tale of lost opportunities: 71 years of economic underdevelopment amid social progress”  

 

 

 

 

 

 

 

 

On the eve of the country’s 71st anniversary of independence, we cannot be content with the country’s post-independence economic performance. It has been far below our potential and expectations at independence. It has been a tale of lost opportunities. Nevertheless, our post-independence social development has been impressive with significant improvements in education, health and social amenities.

Economic performance

Sustained rapid economic growth has eluded the country. In the post-independence period (1950-2018), the annual average economic growth of around 4.2 percent has been disappointing. There have been short periods of high growth that could not be sustained.

Even more disappointing than the long-term economic performance has been the recent slow economic growth of below the annual average for the entire post-independence period. In the last four years (2015-18) the economy grew by only about 3.5 percent. In contrast, the South Asian region is growing at 7.1 percent.

Long period growth

It can be argued that economic growth of around 4 percent over a long period, though inadequate and below the country’s capacity, is not a mean achievement. However, it is inadequate to meet the aspirations of society and was below the country’s economic potential. The country’s economic achievements have been below expectations and potential.

Economic achievements

Admittedly, in spite of this low growth, the country has had significant economic and social achievements in the post independent years. Among the economic achievements is its agricultural development.

At the time of independence, the nation imported about half its requirements of rice and many of its food requirements. Nearly half of import expenditure was on food. That was for a population of 7 million. Today, with a population of 21.5 million — thrice that at independence — we are more or less self-sufficient in rice and has a lesser dependence on imports of other food needs. In recent years total food imports have been less than 10 percent of import expenditure.

Diversified economy

There has also been a significant diversification of the economy with agriculture constituting only 7 percent of GDP. The services sector is both the largest contributor to GDP and the highest growth sector in recent years. While services contributed about 55 percent of GDP, manufacturing (including construction) contributed 38 percent to GDP.

Income poverty and unemployment

There has been a fourfold increase in per capita incomes. However, many countries that had a lower per capita income in the 1950s have much higher per capita incomes now. Poverty has declined. The official poverty count has fallen to 4.1 percent and unemployment is at about 5 percent. There is, however, a vast disparity of incomes among regions. High levels of poverty persist in districts such as Moneragala, Nuwara Eliya and in the Eastern Province.

Human development

The most impressive achievements after independence have been in the country’s social development. There have been significant improvements in literacy and school enrolment, reduction in mortality rates, an increase in life expectancy and significant improvements in social amenities such as housing, potable water, sanitation,  and access to electricity and telephones.  The country achieved the Millennium Development Goals (MDG) set for 2015.

Health

Life expectancy at birth increased from around 55 years at the time of independence to 75 years today and is higher for females at 77 years than for males at 72 years. There have been significant improvements in maternal mortality, infant mortality and under 5 mortality. Under 5 mortality decreased from 560 per one hundred thousand live births at the time of independence to 100 in 2015. Infant mortality declined from 82 to 8.5 per thousand in 2015.

Most communicable diseases have been eradicated, but non communicable diseases are increasing. Illnesses associated with the country’s ageing population are increasing.

Literacy and education

Adult literacy increased from 57.8 per cent in 1945 to 93 per cent in 2017. Female literacy improved more sharply during this period from 43.8 per cent (1945) to 92.4 per cent, while male literacy increased from 70.1 per cent to 94.1 per cent in 2015. School enrolment of children between the ages of 5-19 increased from 54.1 percent (1945) to 75.2 percent in 2016.

Human Development Index (HDI)

The Human Development Index (HDI) that is a composite indicator of development was at 0.743 (2015) and ranked 99th of 177 countries. While this ranking is above that of most countries at similar levels of income, countries in East Asia and South East Asia that were behind Sri Lanka in the 1950s and 1960s have overtaken us.

Limitations

Despite these improvements in mortality rates, literacy and school enrolment, high rates of diseases associated with poverty and poor living conditions persist. Further, the quality of health and educational services leaves much to be desired. There are also significant regional disparities and urban rural differences.

Notwithstanding these qualifications, there is no doubt that the country’s social and human development indicators are impressive. This comes out clearly when comparisons are made with other developing and even some developed countries. However, progress in social indicators could have been much better in recent years, if economic growth was more rapid.

Reasons for underdevelopment

The reasons for the inadequate economic performance are many. These include the ethnic violence and civil war, distraction from economic concerns to political and cultural issues, the frequent changes of government and the consequent changes and uncertainty in economic policies, preoccupation with politics and religion rather than a serious concern in economic development.

Ideological rather than pragmatic policies, inability to seize the opportunities to export in a liberalised international economy and neglect of and underdevelopment of technical skills are among the many reasons for the country’s economic underperformance.

Adverse terms of trade, external shocks, such as fuel price hikes and adverse global financial developments and unfavourable geopolitical developments have also affected the economy adversely during the last 71 years.

Concluding reflection

On the eve of the country’s 71st anniversary of independence, the country is experiencing slow economic growth and is in a foreign debt crisis and a middle income trap. The country is caught up in a political structure and a social and cultural milieu that is not conducive for rapid economic development.

When can we expect a strong resolve for development that transcends the constraints to rapid economic development?

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Filed under accountability, economic processes, education, export issues, heritage, historical interpretation, island economy, performance, politIcal discourse, sri lankan society, welfare & philanthophy, working class conditions, world events & processes

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