New Pathways to Inclusive Growth in Sri Lanka

Multi-phase research project in collaboration with the Government of Sri Lanka aimed on putting growth on a sustainable and inclusive footing. 

man sitting on a pole fishing in Sri LankaSri Lanka's path to middle income status has been remarkable in several ways. Over the long-term, the country has managed consistently high GDP growth rates and strong outcomes in education, health and poverty reduction, despite facing a 26-year conflict. The end of the conflict ushered in an acceleration in growth, with real annual growth rates in GDP per capita exceeding 7 percent from 2010 to 2012. However, this acceleration proved temporary, with the rate of growth reverting back to the long-term average of 4 percent in each of the four years from 2013-2016. The “peace dividend” that Sri Lanka experienced was surprisingly limited in scale and duration, and exposed weaknesses in the sustainability of Sri Lanka’s growth moving forward. The country's path to development must now change to sustain more rapid convergence with high-income countries and to deliver higher levels of well-being to all parts of the country.

In January 2015, Sri Lanka elected a new government with a vision of promoting sustainable development and reconciliation. As Sri Lanka's political institutions undergo an important transformation, economic changes will also be required to put growth on a more sustainable and more inclusive footing. The Growth Lab, through financial support from the Open Society Foundations (OSF), began collaborating with the Government of Sri Lanka (GoSL) in an applied research project to help the country move toward this future and learn through the process.

The project included applied research through the Growth Lab and action research through the Building State Capability program with a focus on a broad range of issues related to economic growth and transformation in Sri Lanka. In the last year of the project, the focus narrowed to three main objectives that have emerged from research to date: empowering exporters to compete globally; upgrading knowhow for diversification; and achieving dynamic and inclusive growth across regions.

Project Dates

January 2015 - September 2018

SUPPORTED BY

Open Society Foundations