While economic growth alone should not be the sole yardstick by which governments attempt to gain legitimacy, growth does matter. Rapid growth over a period of years allows countries such as Sri Lanka to grow from low income levels to middle-income status. The country has seen a remarkable strengthening of its infrastructure development programmes, underpinning the sources of faster growth in recent years. However, sustaining this momentum in the longer term calls for raising Sri Lanka’s total factor productivity growth i.e., the efficiency with which workers and capital are used. With a dwindling working age population, higher long term growth will critically depend, among other factors, on technological innovation and the availability of a skilled, productive and flexible workforce.
For Sri Lanka, the transition to a post-conflict era raises legitimate economic, political and social aspirations that call for a steady and politically harmonious growth process. Policies, the role of government, the state of the market, and regulatory institutions will determine the country’s long term growth dynamics. In this context, the Sri Lanka: State of the Economy 2012 report examines the many opportunities and challenges on the road to sustained and equitable growth for Sri Lanka in the coming years.
The report is available for sale from the IPS premises at No. 100/20, Independence Avenue, Colombo 07 (Tel: +94-11-2143100, +94-11-2665068), and bookshops island-wide.
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