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Q.Describe any two factors responsible for the economic growth in Sri Lanka despite the internal conflicts.

CBSECBSE Class XII Board 2024Subjective· 4mImportance★★★★★
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Sri Lanka's economy demonstrated resilience during internal conflicts primarily due to substantial remittances from overseas workers and the continued strength of its export-oriented industries.

Internal conflicts typically devastate a nation's economy, disrupting production, deterring investment, and fragmenting markets. However, Sri Lanka, despite enduring a prolonged civil conflict for decades, managed to sustain a degree of economic growth. This resilience can be attributed to several underlying factors that either remained unaffected by the conflict or adapted to its presence.

Two significant factors responsible for this economic growth were:

  • Substantial Remittances from Overseas Workers: A large number of Sri Lankans sought employment abroad, particularly in the Middle East, Europe, and other parts of Asia. These overseas workers consistently sent a significant portion of their earnings back home to their families. These remittances served as a crucial and relatively stable source of foreign exchange for the country. Unlike domestic industries, which could be directly impacted by conflict, the income generated by these workers was external and largely insulated from internal strife. This steady inflow of foreign currency helped to bolster the national economy, support domestic consumption, and provide a vital buffer against economic shocks caused by the conflict. It also contributed to poverty reduction and improved living standards for many families, indirectly stimulating local economic activity.

  • Resilient Export-Oriented Industries: Sri Lanka possesses well-established export industries that continued to operate and generate foreign exchange even during periods of conflict. Key among these were the garment industry and traditional plantation crops like tea, rubber, and coconut. …

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