Macroeconomic Policies, Crises, and Growth in Sri Lanka, by Prema-chandra Athukorala, S. K. Jayasuriya

By Prema-chandra Athukorala, S. K. Jayasuriya

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Extra info for Macroeconomic Policies, Crises, and Growth in Sri Lanka, 1969-90 (World Bank Comparative Macroeconomic Studies)

Example text

While stressing that the most important task was to reduce the budget deficit, the Central Bank also viewed direct action to reduce imports as essential. Page 13 Meanwhile, the SLFP regime had to contend with opponents on both the right and the left. The regime survived an attempted fight-wing coup d'etat by elements within the military in 1961, but faced a major challenge in 1963 when the three main leftist parties formed a United Left Front (ULF) and made demands that included substantial wage increases.

There is little seasonal variation in temperatures. A southwestern monsoon brings rain from April to June, and a northwestern monsoon visits from mid-October to mid-February. On the basis of variations in annual rainfall, the country can be divided into a wet zone, a dry zone, and an intermediate zone. The southwestern region is the wet zone, with annual rainfall averaging 60 to 80 inches in coastal areas and 120 inches in the central hills. Traditionally, tea, rubber, coconut, and rice (paddy) have been the main agricultural crops.

This study fills this gap. The study offers an overview of the postindependence economic and political developments in Sri Lanka and a new perspective on the interaction between macroeconomic policies, political and social stability, and long-term growth. It challenges widely held views on the relationship between welfare expenditures and growth. The study focuses on the policy experience of two periods (1973-75 and 1978-82), periods when the economy was subjected to major domestic and external stresses.

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