Sri Lanka Overview: Economy
The country's economy has traditionally been based on agriculture, which now contributes less than 20% to the gross domestic product and employs about a third of the work force. The emphasis is on export crops such as tea, rubber, and coconuts (all plantation-grown). Cinnamon, cardamom, pepper, cloves, nutmeg, citronella, tobacco, cocoa, and coffee are also exported. Rice, sugarcane, grains, pulses, oilseed, fruit, and vegetables are grown for local use and consumption. Petroleum refining is important, and amorphous graphite, precious and semiprecious gems, mineral sands, clay, and limestone are mined. Port construction, telecommunications, and offshore insurance and banking are also important industries. Remittances from Sri Lankans working abroad, mainly in the Middle East, contribute significantly to the economy. The island's swift rivers have considerable hydroelectric potential.
Historically, industry centered chiefly around the processing of agricultural products, but textiles and garments are now Sri Lanka's biggest export. Sri Lanka has a persistent balance of trade problem, however, and the country is dependent on large amounts of foreign aid. Although coastal lagoons provide many sheltered harbors, only S Sri Lanka lies on the main world shipping routes. The port of Colombo, on which most of the country's railroads converge, handles most of the foreign trade. Exports include textiles and apparel, tea and spices, diamonds, emeralds, rubies, coconut products, rubber goods, and fish. Textile fabrics, mineral products, petroleum, foodstuffs, machinery, and transportation equipment are imported. The United States, India, and Great Britain are the largest trading partners.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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