encouraged public-private partnership as a measure to ensure transparency . The left wing labour organization which oppose neo-liberal policies are strongly suppressed with violence . Janatha Vimukthi Perumana , a M-L Party in Sri Lanka aims to build socialist structures . Few reports estimate that during 1988-99 the army killed as many as one lakh members belonged to this party .
The civil war with LTTE continued during 1983-2009 . The government increased defence expenditure excessively to strengthen army with the advice and co-operation of imperialist exploitative forces to end the civil war . Later on , totally ignored the issue of discrimination raised by the civil war . While implementing neoliberal policies strongly , it announced in 2000 that it will stand as a “ strong commercial model ”.
It started taking foreign / external loans at high rates of interest for the infrastructure led growth . It took loan from IMF 17 times including the expected present one in 2022 and promising for the strong implementation of economic reforms . The Sri Lanka also took loans from Asian Development Bank , China , Japan and European countries . It built a Hambantota Southern Port , modernise Colombo International Airport , Expressways to connect North and East tourist centres of Sri Lanka .
China extended loan to Sri Lanka for infrastructure under ‘ Belt and Road initiative ’ during 2006- 2019 is as high as $ 12 billion . More than 750 acres of land is reclaimed in Indian Ocean to build an International Port City- a World Class Free Trade Zone . A firm owned by the government of China is constructing it with $ 1.4 billion . It is expected to be completed in 2043 and till then , this project yield no revenue . After its completion , the Sri Lanka agreed that 43 percent of reclaimed land will be leased out to China for 99 years .
To construct Hambentota International Airport , Sri Lanka took one billion US dollars from China . The 8 new government which came to power in 2015 agreed to give 15,000 acres of land around the Port under ‘ Debt for Equity Swap ’ to China for 99 years lease instead of repaying the debt .
The Sri Lanka severely trapped in external debt in the process of creation of infrastructure . Consequently , in flow of foreign investment increased to get the benefit from developed tourism . Moreover , the bilateral agreements of Sri Lanka with Singapore , Thailand , Australia , China , India and Pakistan has created a large market basis for the foreign investment . International Brand Hotels like Shangri Le with 800 rooms , Hyatt with 550 rooms , Marriot with 200 rooms , Crown Casino with 450 rooms are built and John Keels constructed a Casino connected resort with 800 rooms . In addition , so many local brand villas emerged to attract tourists .
Many multinational brands like Cargill JKH , LOLC holdings and MAS holdings and Brandix in Apparel , LAUGFS Holdings in electricity , Atikem Spence in Hospitality , Dilmah , Island Tea in Tea , Ceylon Tobacco , DCSL , CBL in consumer goods are established firmly in Sri Lanka .
The export - orientation did not diversify exports rather confined to textile , readymade garments , tea which are made with cheap labour . In view of their nature of inelastic demand , the demand will not increase as well as their price . The majority people whose livelihood is based on this exportoriented industry are casual labour with low wages and no job security and subjected to high labour exploitation .
Further , essentials mainly depends upon imports . Though Sri Lanka is an Island , it imports Tinned Fish indicates the level of negation of self-reliance . On the name of Knowledge- based economy , the education sector is with the government to train the youth in the skills which have demand in foreign countries . The skilled youth have no option except to migrate to other countries and earn foreign exchange for remittances . No question of national development .
The development of agriculture sector did not connect to the needs of the nation . The poverty is concentrated in villages . The World Bank estimates reveal rise in the income inequalities , the share of household income of top 10 percent is more than 38 percent while it is less than 5 percent for bottom 20 percent . The continuous rise in prices increases the wealth of rich further and make the poor poorer . Though , the estimates show the decline in extreme poverty , the problems of hunger , malnutrition and under nutrition are rampant . It is already noted that as many as 45 percent still live in near poverty conditions .
Strong Implementation of Economic Reforms since 2009- Reversal of Growth Estimates
Since 2009 , the Economic reforms are implemented aggressively . The Asian Development of Outlook , 2014 estimates that the strong implementation of liberalised policies resulted in improving foreign relations , increasing flows of foreign direct investment , raising exports and tourism , decreasing deficit in the current account of balance of payments as well as deficit in the budget and raising the growth of service sector . Therefore , the report expects the rate of growth of GDP in 2014 and 2015 will be 7.5 percent and appreciated Sri Lanka as a fast growing economy in Asia .
All these estimates are reversed since 2013 has to be noticed . As per World Bank , the trends in the growth of Sri Lanka are unsustainable . Its rate of growth of GDP is around 6.4 percent only during 2003-2012 and it is declined to 3.3 percent in 2018 and to 2.3 percent in 2019 . The share of public debt in Gross Domestic Product was 77.9 percent in 2017 but increased to 101 percent in 2020 . It is wonder to notice that despite this deterioration , it could achieve progress in the index of Ease of Doing Business . This is not at all a paradox but quite natural in the process of making it a dependent formation .
In 2016 , Sri Lanka took loan to the tune of $ 100 billion from World
Class Struggle