Sri Lanka is in many respects adevelopment success story. With economic growth averagingmore than 7 percent a year over the past five years on topof an average growth of 6 percent the preceding five years,Sri Lanka has made notable strides towards the goals ofending extreme poverty and promoting shared prosperity (the‘twin goals’). The national poverty headcount rate declinedfrom 22.7 to 6.7 percent between 2002 and 2012/13, whileconsumption per capita of the bottom 40 percent grew at 3.3percent a year, compared to 2.8 percent for the totalpopulation. Other human development indicators are alsoimpressive by regional and lower middle-income countrystandards. Sri Lanka has also succeeded in ending decades ofinternal conflict in 2009 and steps have been taken towardsreconciliation. Sri Lanka’s has had impressive developmentgains but there are strong indications that drivers of pastprogress are not sustainable. Solid economic growth, strongpoverty reduction, overcoming internal conflict, effecting aremarkable democratic transition in recent months, andoverall strong human development outcomes are a track recordthat would make any country proud. However, the country’sinward looking growth model based on non-tradable sectorsand domestic demand amplified by public investment cannot beexpected to lead to sustained inclusive growth goingforward. A systematic diagnostic points to fiscal,competitiveness, and inclusion challenges as well ascross-cutting governance and sustainability challenges aspriority areas of focus for sustaining progress in endingpoverty and promoting shared prosperity.
PDF
download
878987797
028-85220240
