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Sri Lanka (formerly Ceylon), Economy

Sri Lanka’s economy is predominantly based on agriculture. Most of the people are subsistence farmers, who make a living by growing rice on their small plots. A large export trade in tea, rubber, and coconuts is the dominant commercial activity; most businesses engaged in producing these goods were nationalized in the middle and late 1970s. The government also controlled banking and insurance, as well as mining and the manufacture of such basic goods as fertilizers, textiles, cement, and petroleum. Consumer goods manufacturing and retail businesses remained in private hands. In the late 1970s the government launched a new program to accelerate economic growth that included the elimination of various state monopolies to allow for more private-sector competition; in the mid-1980s the government sought to promote foreign investment in export-oriented industries. Beginning in the late 1980s ethnic violence strained Sri Lanka’s economy. Renewed attempts to privatize the economy, particularly the agricultural industry, began in the 1990s.

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