Sri Lanka - Recent economic developments and current prospects

FILE COPY, Report No. 407-CE Recent Economic Developments And Current Prospects for Sri Iannla %..I I LL%41 II1'%%4 April 15, 1974 South Asia Department Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  Currency Equaivalents I/ Currency Unit Sri Lanka Rupee Prior to 1968 US$1.00 Rs 44.76 Rs 1000 US$0.21 Rs- ml, = US$210OOO 1968 to 1971 US$1.00 Rs 5.95 Rs 1000 = US$0o17 Rs 1 mil, us$168,000 1972 US$1.00 = Rs 6.40 RS 1.00 = US$0.16 Rs 1 mU. = US$156,200 1973 US$1.00 = Rs 6.52 Rs 1.00 = US$015 Rs 1 mi.1. = US$153,300 1974 US$1.00 Rs 7.00 Rs 1.00 = Us$0o.14 Rs 1 mil = US$142,800 FOREIGN EXCHANGE hNTITLEXET CERTI]PICATE (FEw) RATE E-' 1969 to 1971 US$1.00 Rs 9.22 (55% FEEC) 1972 US$1o00 = Rs 9.92 (55% FEEC) 1973 US11.00 = Rs 10.75 (6qX FEFfl 197) US$1000 = RR 11on ( pvwT 1/ The Cri Tanka rupee which had beeorn linked to the UJS. dollar from November 6, 1971, eas re-linked to the Pound Sta'livntg f-n Th,l,r l 10 79 ^nsw- !+ n rimyj,r w-m+.g r'nf 1'1 AA -r Sterlin fr. Jqlly 10 1972 or.ar - -d at- a r-.-_ri+ rate of ,o= Rs 15.60. Parity rates with all other currencies are determined fr-om tim to time = kr t.he Gern" . -1 > Tbhis rate currer.tly applies two a^owut 2-0% of m,erchar.dise exports and about 60% tf aerchandise imports. This reprtas prepared wo o rng Messr 8. Edvard K. Hawkina (Chief of Mission), Alfred S. Cleveland, Shphid A. Chaudhrvy and Rolf Havn (Consultant). ThA missioni SqiteTd 5 _nka from late November to late December, 1973.  TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS . * * * * * ............................... . i - vii I. INTRODUCTION ........ ............................. .. 1 II. NATIONAL INCOME, INVESTMENT AND SAVINGS .............5 III. THE BALANCE OF PAYMENTS .............. ............ 9 IV. PUBLIC FINANCE ....... ............................. 19 V. AGRICULTURE AND INDUSTRY ..... ....................... 38 VI. POPULATION AND EMPLOYMENT ..... ...................... 62 VII. THE BASIS FOR LONG RUN GROWTH ........... ............ 66 STATISTICAL APPENDIX MAP   Page 1 of 2 pages SRI LANKA - COUNTRY DATA AREA POPuiAT ION DflISITY b5,607 sq. km. 13.5 million, 1973 198 per sq. km. Rate of Growth: 2.3%, 1965-72 3,033 per sq. km. of arable land POPULATION CHARACTERISTICS (1972) HEALTH (1970) Crude Birth Rate (per 1,000): 29.5 Population per physician, 3,690 Crude Death Rate (per 1,000): 8.0 Population per hospital bed, 330 Infar.t Mwortali-ty (per 1,000 liive bi-rths): 50 (1970) INCOME DISTRIRBITTnOl (1971) DTSTRIBUTION OF LAND OWNERSHIP % of national income, highest quintile, 46 % owned by top 10% of owners lovest ouintile, 5 % owned by smallest 10% of owners ACCESS TO PIPED WATER ACCESS TO ELECTRICITY % of population - urban .. % of population - total - rural ..-- rural NUTRITION EDUCATION (1970) Calorie intake as % of requirements .. Adult literacy rate, 85% Per capita protein intake .. Primary school enrollment, 89% GNP PER CAPITA IN 1971./2 US $100 GROSS NATIONAL PRODUCT IN 1973 ANNUAL RATE OF GROWTH (%, constant 1959 prices) US $ M'fln. % 1960-65 1965-70 1973 GNP at Narket Prices 2324 100.0 3.9 5.0 3.5 Gross Domestic Invest. 403 17.3 -2X0 14.1 7.1 Gross National Saving .. .. -1.2 13.2 Current Account Balance - 38 1.6 Exports of Goods, NFS 427 18.3 2.3 0.8 15.0 Imports of Goods, NFS 448 19.2 -4.3 -2.0 6.4 OUTPUT, LABOR FORCE AND YROD'JCTIVITY IN 19731 Value Added Labor Force /3 V.A. Per Worker UT- ,n. _ (T000) __ US It A, e Agriculture 771 33 2098 55.8 367 60 Industry 365 16 1. R71 120 Services 1205 51 1307 34.2 922 150 Unallocated . . . Total/Average 2341 100 3824 100.0 612 100 WOVERNMENT FINANCE Central Government (Rha.Mln.) % of GDP 1973 1970-72 1973 Current Receipts 3638 24.9 23.8 Current Expenditure 3640 25.8 23.8 Current Surplus - 2 1.1 - Capital Expenditures 920 7.5 6.o External Assistance (net) 244 2.3 1.6 L The Per Capita GNP estimate is at 1971 market prices, calculated by the same conversion technique as the 1972 World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. ,2 Provisional /3 Does not include unemployed who are estimated to number about 800,000 in 1973. Not available Not applicable  Page 2 of 2 pages SRI LANKA - COUNIRY DATA MOJNEY, CREDIT AND PRICES 1966 1969 1970 1971 1972 1973 (Nov.) (Million Rs Outstanding End Period) Money and Quasi Money 2202 2301 3061 3379 3917 3979 Bank Credit to Public Sector 1769 2334 2571 2724 2900 2520 Bank Credit to Private Sector 872 1470 1617 1760 2187 2127 (Percentages or Index Numbers) Money and Quasi Monev as % of GDP Li 28.5 21.4 26.0 28.3 30.5 26.0 General Price Index (1963 = 100) 103.2 119.9 127.0 130.4 138.6 154.6 Annual Percentage Changes in: General Price Index .. .1 5.9 2.6 6.3 16.0 Bank Credit to Public Sector .. 10.1 9.6 6.o 6.4 Bank Credit to Private Sector .. 19.0 10.0 8.8 24.0 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1969-73) 1969 1970 1973 (US $ Min.) US $ ,ln. % Exports of Goods, NFS 345 362 427 Tea 179.4 377 - C~~~~A. ,~~~~. 00 ~ ~ Lno 1.1.0 11l I I-.ports of Goods, NF 0 400 Z84.4 19. Resource Gap (deficit = -) -111 -21 Coconut Products 36.4 11.2 All Other Commodities 47.6 14.5 intel-est PaymU,ents (net) -18 -21 -17 Workers, Remittances - 1 - 2 - Total 327.8 100.0 Other Factor Payments (net) -12 -10 3 Net Transfers - - - E1NUAL DET 3c 31, 197312 Balance on Current Account -142 -71 -38 US $ Min. Direct Forei