Chronology of Rise and Fall of Sri Lanka Economy - A historical attempt on SriLankan Economic crisis.

Sri Lanka is an island nation in South Asia with a population of about 22 million people. The country has a rich cultural heritage and a diverse natural environment. Sri Lanka's economy has undergone several transformations over the years, from being a trading hub in ancient times to a socialist-oriented state in the post-independence era to a market-oriented economy since 1977. However, the country has also faced many challenges and crises that have affected its economic performance and prospects. This blog post will provide a brief overview of the chronology of rise and fall of Sri Lanka economy, highlighting some of the key events and factors that shaped its economic history.

## Ancient Times to Colonial Era

Sri Lanka has a long history as a trading hub as a result of being located at the centre of east–west trade and irrigated agriculture in the hinterland, which is known from historical texts surviving within the island and from accounts of foreign travellers. The country was famous for its exports of spices, gems, pearls, ivory, elephants, textiles and other commodities to various regions such as India, China, Persia, Arabia, Europe and Africa. The country also had an advanced civilization with sophisticated urban planning, irrigation systems, architecture, art and literature.

However, Sri Lanka's economic prosperity was often disrupted by internal conflicts among different kingdoms and external invasions by foreign powers such as Cholas, Pandyas, Portuguese, Dutch and British. These invasions resulted in political instability, loss of sovereignty, exploitation of resources and destruction of infrastructure. The colonial rule by the Portuguese (1505-1658), Dutch (1658-1796) and British (1796-1948) also brought significant changes to Sri Lanka's economy such as introduction of new crops (e.g., coffee, tea), taxation systems (e.g., land revenue), trade policies (e.g., monopoly rights), legal systems (e.g., Roman-Dutch law) and social structures (e.g., caste system).

## Post-Independence Era

Sri Lanka gained independence from British rule in 1948 as Ceylon. The country inherited a relatively developed economy with a strong export sector (mainly tea), an educated workforce and good infrastructure. However,

the country also faced several challenges such as ethnic tensions between Sinhalese majority and Tamil minority groups , high population growth , low domestic savings , dependence on foreign aid , balance of payments problems , inflation , unemployment  etc.

The first decade after independence was marked by moderate economic growth , political stability  under two major parties - United National Party (UNP)  led by D.S Senanayake  followed by his son Dudley Senanayake   who pursued pro-market policies  such as free trade , private sector development , foreign investment attraction etc. However,

the second decade saw a decline in economic performance  due to external shocks such as Suez Canal crisis , oil price hike , world recession etc. Moreover,

the political landscape changed with the emergence of Sri Lanka Freedom Party (SLFP) led by S.W.R.D Bandaranaike who advocated more socialist-oriented policies such as nationalization , import substitution , welfare expansion etc. Bandaranaike was assassinated in 1959

and his widow Sirimavo Bandaranaike became the world's first female prime minister . She continued her husband's policies but faced opposition from UNP led by Dudley Senanayake who returned to power in 1965 . The two parties alternated power until 1977

with frequent changes in policies creating policy uncertainty  for investors .

## Market-Oriented Reforms

Sri Lanka began to shift away from a socialist orientation in 1977 under UNP led by J.R Jayewardene who won a landslide victory . Since then,

the government has been deregulating , privatizing , opening up

the economy to international competition . Some of the major reforms included liberalization

of trade ,

exchange rate ,

foreign investment ,

financial sector ,

price controls etc.[3] These reforms resulted in higher economic growth ,

lower inflation ,

increased exports ,

foreign exchange reserves ,

private sector participation etc.[3] However,

they also created some challenges such as widening income inequality ,

rising unemployment ,