How did Sri Lanka's economy develop post-independence?

Post-independence, Sri Lanka's economy developed through a mix of socialist policies, liberalisation reforms, and a focus on agriculture and services.

After gaining independence from British rule in 1948, Sri Lanka initially adopted socialist economic policies under the leadership of the Sri Lanka Freedom Party. The government nationalised key sectors of the economy, including banking, insurance, and trade, and implemented extensive welfare programmes. These policies aimed to reduce income inequality and promote social justice. However, they also led to a slow rate of economic growth and high levels of public debt.

In the late 1970s, the United National Party came to power and introduced liberalisation reforms to stimulate economic growth. These reforms included reducing trade barriers, privatising state-owned enterprises, and promoting foreign investment. The liberalisation policies resulted in a significant increase in economic growth, with the average annual GDP growth rate rising from 3.5% in the 1970s to 5.2% in the 1980s.

Despite these reforms, the economy faced significant challenges due to the civil war that lasted from 1983 to 2009. The war disrupted economic activities, particularly in the Northern and Eastern provinces, and diverted significant resources towards military expenditure. However, the end of the war in 2009 opened up new opportunities for economic development, particularly in the tourism sector.

Throughout its post-independence history, Sri Lanka's economy has been heavily dependent on the agriculture sector, particularly tea, rubber, and coconut production. However, in recent decades, the services sector has become increasingly important, contributing over 60% of GDP in 2019. The growth of the services sector has been driven by the expansion of tourism, information technology, and financial services.

In conclusion, Sri Lanka's post-independence economic development has been shaped by a mix of socialist policies, liberalisation reforms, and a focus on agriculture and services. Despite significant challenges, including a long-lasting civil war, the economy has achieved moderate growth and has been gradually transitioning towards a more service-oriented economy.