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Edited by Anis Chowdhury and Wahiduddin Mahmud
Chapter 4: Sri Lanka
1 Saman Kelegama Background: economic history Sri Lanka is a small island economy situated in a strategic geographical location in the Indian Ocean. Many years ago it became a port of call for Arab, Chinese and Greek traders. In the 16th century the Sri Lankan coastal belt came under the inﬂuence of European traders starting with the Portuguese (1505–1657), Dutch (1658–1795) and British (1796–1948). The British rule extended to the entire country in 1815, and ended in 1948. Thus, Sri Lanka was under the inﬂuence of European powers for nearly four centuries. Although Sri Lanka progressed under the Portuguese and the Dutch for nearly three centuries, the dramatic transformation in the economy took place mainly under British rule. Coﬀee was ﬁrst planted as an export crop in 1836. After the destruction of coﬀee plantations in a plague, the British introduced tea in 1856. A modern infrastructure constituting roads, railways, ports, banking and insurance services was introduced to support the tea industry. Gradually, rubber and coconuts were cultivated on a commercial basis. At the time of independence in 1948, Sri Lanka was basically an agro-based economy with tea, rubber and coconuts accounting for 90 per cent of exports. During the last stages of colonial rule, Sri Lanka also beneﬁted from an extensive social welfare programme, and achieved Universal Adult Franchise in 1931. Sri Lanka inherited from the British a Westminster-type democratic parliamentary system, education and judicial systems akin to that of the British...
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