Sri Lanka

TRADE

A dam of the Accelerated Mahaweli Program
Courtesy Embassy of Sri Lanka

Sri Lanka's economy continues to be heavily dependent on foreign trade. Historically, the island has exported cash crops in order to import food to feed its population. Although the production of rice, the staple food crop, increased rapidly in the late 1970s and 1980s, in early 1988 the island remained short of self-sufficiency in food. Trade policy since independence has been dominated by the deteriorating terms of trade. Between the 1950s and the 1980s, the amount of imports that could be bought with a given amount of the traditional exports has declined. Governments responded in the 1960s and 1970s with strict controls over imports, foreign exchange, and some aspects of internal trade. When the economy was liberalized in 1977, many of these regulations were swept away. One result has been a large increase in the foreign trade deficit and the external debt.

Data as of October 1988