Development of Sri Lanka's Economy Since Independence in Focusing on the Trade Balance and Exchange Rate Movement 1948

At the time of Independence in 1948, Sri Lanka's economy was highly dependent on international trade, but concentrated on exporting few agricultural product exports , hence experiencing balance of payment problems. For the past fifty years Sri Lanka was experiment ground for different economic policy packages. For the first three decades after independence the focus was on import substitution.Once the limitations of such policy for development was identified, and influenced by the Asian success stories, Sri Lanka decided to focus on export oriented industrializationfrom1977. After two decades, the country has identified several weaknesses in the economy that had prevented her from achieving rapid economic growth. Although the manufacturing sector has shown considerable growth, the high import dependency of the industry has resulted in low value addition. While creating small scale industry with forward linkages to the manufacturing industry the country should make an effort to attract foreign capital as well as technology that is necessary to create a strong industrial base