Transitions to a free market: Economic liberalization in Sri Lanka

Round Table

Volumn , Issue 344, 1997, Pages 485-511

  Shastri, Amitai ^a  

^a SAN FRANCISCO STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ETHNIC CONFLICT; MARKET REFORM; POLITICS OF REFORM; SOCIOECONOMIC IMPACT;

SRI LANKA;

EID: 0031428620     PISSN: 00358533     EISSN: None     Source Type: Journal    
DOI: 10.1080/00358539708454383     Document Type: Article

References (60)

1. For instance, see Joan M. Nelson, 'The Political Economy of Stabilization: Commitment, Capacity and Public Response', World Development, Vol 12, 1984, pp 983-1006.
2. Satchi Ponnambalam, Dependent Capitalism in Crisis: The Sri Lankan Economy 1948-1980, London, Zed Press, 1980; W. D. Lakshman, 'Lineages of Dependent Development: From State Control to the Open Economy in Sri Lanka', in Ponna Wignaraja and Akmal Hussain (eds), The Challenge in South Asia: Development, Democracy and Regional Cooperation, New Delhi, Sage, 1989, pp 105-138.
3. Satchi Ponnambalam, Dependent Capitalism in Crisis: The Sri Lankan Economy 1948-1980, London, Zed Press, 1980; W. D. Lakshman, 'Lineages of Dependent Development: From State Control to the Open Economy in Sri Lanka', in Ponna Wignaraja and Akmal Hussain (eds), The Challenge in South Asia: Development, Democracy and Regional Cooperation, New Delhi, Sage, 1989, pp 105-138.
4. David E. Sahn, 'Changes in the Living Standards of the Poor in Sri Lanka During a Period of Macroeconomic Restructuring', World Development, Vol 15, 1987, pp 809-830.
5. Newton Gunasinghe, 'Open Economy and its Impact on Ethnic Relations in Sri Lanka', in Committee for Rational Development (ed), Sri Lanka: The Ethnic-Conflict, New Delhi, Navrang, 1984, pp 197-214; Siri Hettige, 'Social Implications of Economic Liberalisation: The Case of Sri Lanka', Colombo, 1995.
6. Newton Gunasinghe, 'Open Economy and its Impact on Ethnic Relations in Sri Lanka', in Committee for Rational Development (ed), Sri Lanka: The Ethnic-Conflict, New Delhi, Navrang, 1984, pp 197-214; Siri Hettige, 'Social Implications of Economic Liberalisation: The Case of Sri Lanka', Colombo, 1995.
7. Brian Levy, 'Foreign Aid in the Making of Economic Policy in Sri Lanka, 1977-1983', Policy Sciences, Vol 22, 1989, pp 437-461; Howard White and Ganeshan Wignaraja. 'Exchange Rates, Trade Liberalisation and Aid: The Sri Lankan Experience', World Development, Vol 20, 1992, pp 1471-1480.
8. Brian Levy, 'Foreign Aid in the Making of Economic Policy in Sri Lanka, 1977-1983', Policy Sciences, Vol 22, 1989, pp 437-461; Howard White and Ganeshan Wignaraja. 'Exchange Rates, Trade Liberalisation and Aid: The Sri Lankan Experience', World Development, Vol 20, 1992, pp 1471-1480.
9. Ronald J. Herring. 'Explaining Sri Lanka's Exceptionalism: Popular Responses to Welfarism and the "Open Economy", in John Walton and David Seddon (eds), Free Markets and Food Riots: The Politics of Global Adjustment, Oxford, Blackwell, 1994, pp 253-287.
10. Such as in Ponnambalam, op cit, Ref 2; Nelson, op cit, Ref 1 ; Gunasinghe, op cit, Ref 4; Herring, ibid; and Mick Moore, 'Economic Liberalisation Versus Political Pluralism in Sri Lanka?'. Modern Asian Studies. Vol 24, 1990, pp 341-383.
11. Such as in Ponnambalam, op cit, Ref 2; Nelson, op cit, Ref 1 ; Gunasinghe, op cit, Ref 4; Herring, ibid; and Mick Moore, 'Economic Liberalisation Versus Political Pluralism in Sri Lanka?'. Modern Asian Studies. Vol 24, 1990, pp 341-383.
12. Such as in Ponnambalam, op cit, Ref 2; Nelson, op cit, Ref 1 ; Gunasinghe, op cit, Ref 4; Herring, ibid; and Mick Moore, 'Economic Liberalisation Versus Political Pluralism in Sri Lanka?'. Modern Asian Studies. Vol 24, 1990, pp 341-383.
13. Such as in Ponnambalam, op cit, Ref 2; Nelson, op cit, Ref 1 ; Gunasinghe, op cit, Ref 4; Herring, ibid; and Mick Moore, 'Economic Liberalisation Versus Political Pluralism in Sri Lanka?'. Modern Asian Studies. Vol 24, 1990, pp 341-383.
14. Such as in Ponnambalam, op cit, Ref 2; Nelson, op cit, Ref 1 ; Gunasinghe, op cit, Ref 4; Herring, ibid; and Mick Moore, 'Economic Liberalisation Versus Political Pluralism in Sri Lanka?'. Modern Asian Studies. Vol 24, 1990, pp 341-383.
15. Unless otherwise indicated, the statistics presented in the analysis have been computed using data published by the Central Bank of Sri Lanka (Colombo); particularly in its Annual Report, 1970 through 1994, and the annual Review of the Economy published between 1975 and 1984. The 1994 figures are provisional. Percentages have been rounded off to the nearest whole figure.
16. Unless otherwise indicated, the statistics presented in the analysis have been computed using data published by the Central Bank of Sri Lanka (Colombo); particularly in its Annual Report, 1970 through 1994, and the annual Review of the Economy published between 1975 and 1984. The 1994 figures are provisional. Percentages have been rounded off to the nearest whole figure.
17. Anne O. Krueger, Foreign Trade Regimes and Economic Development: Liberalisation Attempts and Consequences, Cambridge, MA, Ballinger, 1978.
18. Robert H. Bates and Anne O. Krueger, Political and Economic Interactions in Economic Policy Reform, Oxford, Blackwell, 1993.
19. Herring, op cit, Ref 6, pp 275-279.
20. Amita Shastri, 'Limits to the Nationalist Revolution in Sri Lanka: The United Front Regime, 1970-1997', paper at the Conference for the Association of Asian Studies, Chicago, 1986.
21. Herring, op cit, Ref 6.
22. Levy, op cit, Ref 5.
23. Personal observations based on interviews and reading during my visit to Sri Lanka in mid-1981.
24. The most important of these promised to provide 1.4 million families a virtual gift of Rs25 000 per family over two years through his Janasaviya scheme which would have cost Rs42 billion a year. At the insistence of the IMF, he had to cut the scheme to a far more modest level - to cover 300 000 families with half the handout to be saved as a nest egg: Far Economic Eastern Review, 30 March 1989, p 66.
25. The Business Acquisition Act, which allowed the government to takeover property, was repealed. All restrictions on foreign equity participation were lifted except in specifically reserved areas in 1990 and the GCEC became the sole authority overseeing foreign investment projects outside the FTZs as well: Economist Intelligence Unit (or IU), Countrv Profile: Sri Lanka 1991/92, London, p 11 ; Far Eastern Economic Review, 16 November 1989, pp 56-58.
26. The Business Acquisition Act, which allowed the government to takeover property, was repealed. All restrictions on foreign equity participation were lifted except in specifically reserved areas in 1990 and the GCEC became the sole authority overseeing foreign investment projects outside the FTZs as well: Economist Intelligence Unit (or IU), Countrv Profile: Sri Lanka 1991/92, London, p 11 ; Far Eastern Economic Review, 16 November 1989, pp 56-58.
27. Lanka Guardian, 15 October 1990, p 3; and Economist, 19 January 1991, p 34.
28. Lanka Guardian, 15 October 1990, p 3; and Economist, 19 January 1991, p 34.
29. EIU, County Report: Sri Lanka 1994, 4th Quarter, p 11.
30. Overall, the real national income of the country (which incorporates the terms of trade effect on GNP) doubled from a growth rate of 2.5 per cent per year under the UF to 5 per cent per year in JR/I, dropped to 4.5 per cent per annum in the following period, and then rose to 5.5 per cent per annum during the Premadasa period.
31. Review of the Economy 1979, p 185.
32. Sri Lanka, Department of Census and Statistics, National Accounts of Sri Lanka 1989, Colombo, p 57.
33. The change was at most 2 per cent for any category. Till as late as 1985/86, 49 per cent of the employed population worked in the agricultural sector, 12 per cent in industry, 11 per cent in trade and hotels, and 13 per cent in community, social, and personal services: Statistical Pocketbook 1990, p 30.
34. Sri Lanka, Department of Consensus and Statistics, Statistical Pocketbook of the Democratic Socialist Republic of Sri Lanka, Colombo, 1980 and 1990. p 187.
35. Statistical Pocketbook 1990, pp 65-66.
36. Herring, op cit, Ref 6, p 272.
37. Statistical Pocketbook 1990, pp 65-66.
38. Levy, op cit, Ref 5, p 442.
39. Central Bank of Sri Lanka survey cited in EIU, Country Profile: Sri Lanka 1991/92, p 15.
40. Hettige, op cit, Ref 4, p 10.
41. Henry J. Bruton and associates, The Political Economy of Poverty, Equity and Growth: Sri Lanka and Malaysia, New York, Oxford University Press, 1992, p 159.
42. Ibid, pp 158-159.
43. Annual Report 1988, p 86.
44. The Colombo coast of living index weights the food category at 61 per cent of the total average household budget whereas the proportion of income spent by low-income households ranges from 70 to 75 per cent. With the price of food rising more than other components of household expenditure, the use of the cost of living index to deflate nominal incomes of the different income groups particularly understates the extent of decline in real incomes experienced by the poorest deciles: Bruton, op cit, Ref 31, p 165. Likewise, the index for rent has been kept fixed at 109.8 since 1970 despite the sharp rise in the cost of real estate and urban rents since 1977.
45. Statistical Pocketbook 1990, p 122.
46. Department of Labour in Statistical Pocketbook 1990, p 34.
47. Godfrey Gunatilleke et al, 'Rural Poverty in Sri Lanka: Priority Issues and Policy Measures', Asian Development Review, Vol 10, 1992, p 165.
48. Sahn, op cit, Ref 3.
49. National Accounts of Sri Lanka 1989, p 74.
50. Gunatilleke et al, op cit, Ref 37, pp 165, 169.
51. Bruton, op cit, Ref 31, p 166.
52. Statistical Pocketbook 1990, p 39.
53. Statistical Pocketbook 1990, p 39.
54. Infant mortality is reported to have declined from 37 in 1978 to 19.4 in 1988: Registrar-General's Department, in Statistical Pocketbook 1990, p 23.
55. Bruton, op cit, Ref 31, p 169.
56. Amita Shastri, 'The Material Basis for Separatism: The Eelam Movement in Sri Lanka', Journal of Asian Studies, Vol 49, 1990, pp 56-77.
57. Gunasinghe, op cit, Ref 4; Stanley J. Tambiah, Sri Lanka: Ethnic Fratricide and the Dismantling of Democracy, Chicago, University of Chicago Press, 1986, pp 32-57.
58. Gunasinghe, op cit, Ref 4; Stanley J. Tambiah, Sri Lanka: Ethnic Fratricide and the Dismantling of Democracy, Chicago, University of Chicago Press, 1986, pp 32-57.
59. The resultant crisis of governance became so intense, that fair elections formed the only means for regaining a degree of legitimacy for the UNP in 1988, a situation repeated in 1994.
60. Adam Przeworski et al, Sustainable Democracy, Cambridge, Cambridge University Press, 1995.