Abstract:
The Sri Lankan economic system was drastically changed from a closed feudal agrarian
subsistence economic system to a dual economy comprising a plantation sector and a
backward subsistence agrarian sector under the British Colonial rule. The economy changed
in this way was later branded as an export economy. An export economy is defined as one
with not merely a high ratio of imports & exports to national income but one in which all
the important macro economic variable such as government revenue & expenditure, private
investment, import & national income itself possess strong functional dependence upon the
level of exports receipts.(Snodgrass: 1966).
But, this economy became favorable only in limited boom periods. All other times this
economic system has not been in favor of the economy. Therefore, attempts were made
even during the British colonial period to change this trade pattern, first, by trying to
diversify the economy through industrialization .. But, industrialization could not make any
impact on changing this pattern of trade. Even by obtaining the independence in 1948 and
then, by following more government interventionist policies starting from 1956 this trade
pattern could not be changed. For example, by 1959,90% of export income of the country
came through the exports of few primary commodities. Even the situation prevailing by
1977 was not much different from that of the end of the 1950s. However, economic reforms
made in 1977 onwards have made a considerable impact on. changing the trade pattern in
Sri Lanka. Accordingly, Sri Lanka's export structure has been changed from more dominant
situations of primary export earnings to the earnings of manufacturing products & the
earnings of the migrant employees. However, the manufacturing exports are concerned
they are concentrated on low value added garments exports. Therefore, this study reveals
that primary exports still plays a major role in deciding the country's economic growth. As
such, this study highlights that the trade pattern emerged during the colonial period can be
still seen in the economy.
