public disclosure authorized sri lanka: recent economic ......balance of payments mercrandise...

Report No. 5628-CE

Sri Lanka: Recent Economic Developmentsand Policies for Growth

May 14,1985

South Asia Programs Department

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS a/

End-December Currency Unit

1983 US$1.00 Rs 25.00Rs 1.00 US$ 0.04

1984 US$1.00 Rs 26.28Rs 1.00 US$ 0.04

Average Annual Exchange Rates

Foreign Exchange Entitlement

Official Rate Certificate (FEEC) Rate bI

1969-71 US$1.00 = Rs 5.95 Rs 9.22 (55% FEEC)1972 US$1.00 = Rs 6.00 Rs 9.30 (55% FEEC)1973 US$1.00 - Rs 6.40 Rs 10.56 (65% FEEC)1974 USS1.00 = Rs 6.65 Rs 10.97 (65% FEEC)1975 US$1.00 = Rs 7.05 Rs 11.63 (65% FEEC)1976 US$1.00 = Rs 8.46 Rs 13.96 (65% FEEC)1977 (Jan. 1-Nov. 15) US$1.00 = Rs 7.89 Rs 13.02 (65% FEEC)1977 (Nov. 16-Dec. 31) US$1.00 = Rs 15.76 -1977 US$1.00 = Rs 9.15 -1978 US$1.00 = Rs 15.61 -1979 US$1.00 = Rs 15.57 -1980 US$1.00 = Rs 16.53 -1981 US$1.00 = Rs 19.25 -1982 US$1.00 = Rs 20.81 -1983 US$1.00 = Rs 23.53 -1984 US$1.00 = Rs 25.44 -

a/ The Sri Lanka rupee, which had been linked to the US dollar fromNovember 6, 1971, was re-linked to the Pound Sterling from July 10,1972, onward at a parity rate of US$1.00 = Rs 15.60. Parity rateswith all other currencies were determined from time to time by theCentral Bank. The rupee was delinked from Sterling on May 24, 1976,linked to a weighted basket of currencies. On November 15, 1977,the exchange rate was unified, depreciated, and allowed to float atan initial rate of US$1.00 = Rs 16.00.

b/ This rate applied to all exports other than tea, rubber, and coconut,and all imports other than food, fertilizer, and drugs. FEECs wereabolished on November 15, 1977.

This report is based on the findings of an economic missionwhich visited Sri Lanka during January 1985. The mission comprisedMessrs. Rene Vandendries (Chief of Mission), John Wilton, Hassan Fazel,and George Mergos (consultant), and Ms. Geri Wise (Research Assistant).

FOR OFFICIAL USE ONLY

GLOSSARY AND PRINCIPAL ACRONYMS

BTT - Business Turnover TaxCPC - Ceylon Petroleum CorporationEPC - Effective Protection CoefficientsGOBU - Government Owned Business UndertakingsIPC - Industrial Policy CommitteeJEDB - Janatha Estates Development BoardNaha - Northeast monsoon, October-FebruaryM&LT - Medium and Long TermMTIP - Medium Term Investment ProgramNAFNS - National Agriculture, Food and Nutrition StrategyNMB - National Milk BoardPE - Public EnterprisePIP - Public Investment ProgramPTC - Presidential Tariff CommissionSPC - State Plantations CorporationYala - Southwest monsoon, May-September

This document has a restricted distribution and may be used by recipients only in the performance oftheir offl duties. Its contents may not otherwise be disclosed without World Bank authonzation.

TITLE : SRI LANKA: RECENT ECONOMIC DEVELOPMENTS AND POLICIES FOR GROWTH

COUNTRY : SRI LANKA

REGION : SOUTH ASIA

SECTOR : COUNTRY ECONOMIC

REPORT TYPE CLASSIF YY LANGUAGES

5628-CE CEM Restricted 05 85 English

PUBDATE : 8505

ABSTRACT : Despite continued political and social unrest and a lower thanexpected paddy harvest due to flooding, the Sri Lankan economyachieved a substantial 5% real GDP growth rate during 1984.Moreover, both the overall budget deficit and the deficit inthe current account of the balance of payments were reducedsignificantly. A large part of these improvements, however,was the result of unusually high tea export prices. At thesame time, long-term growth trends in several major sectors ofthe economy remained low. This underscores the continuedvulnerability of the Sri Lankan economy to fluctuations in teaearnings and the need to develop new areas of growth if livingstandards are to continue to rise. Based on a review of thelink between Government policy and past performance, the primaryfocus of the report is on those policy changes in the overallincentive framework which are needed for continued growth inthe future. Emphasis is placed on sector-wide policies inagriculture and industry. The report then illustrates howimplementation of these policies would lead to a developmentscenario which would generate highex rates of growth, whilemaintaining internal and external financial stability. Thedownside risks of not following appropriate economic policiesand the resulting slowdown in growth and build-up of externaldebt is also illustrated in alternative scenarios. The reportcon-ludes by emphasizing the vital role of the aid community inthe achievement of Sri Lanka's development objectives.

SRI LANKA: RECENT ECONOMIC DEVELOPMENTS AND POLICIES FOR GROWTH

Table of Contents

Page No.

I. RECENT ECONOMIC DEVELOPMENTS ................................. 1A. Introduction ............. ...................... 1B. Macro-economic Developments 2...... 2

(a) Sources of Growth ................. ................. 2(b) Investment and Savings .......................... 5(c) Monetary Policy, Inflation and the Exchange Rate .... 8

C. The Balance of Payments . ....................... 8D. Public Finance ....... ....................... 12

(a) Introduction ...................... 12(b) 1984 Budget Outcome .. ...................... 15(c) The 1985 Budget ................ o............... 16

II. MEDIUM-TERM GROWTH PROSPECTS AND POLICIES ................. 19A. Introduction - Prospects and Policy Issues ............ 19B. The Base Scenario ... ......... .......................... 20C. Policies for Growth ....... .. ........................... 24

(1) Agricultural Policies ....................... . 24Introductioi . . .... . .................... .......... 24Recent Production Trends ............................... 25Major Policy Developments in Agriculture Since 1977 .... 27Future Prospects and Recent Government Initiatives 29

(a) Prospects and Issues ............................ 29(b) Recent Government Initiatives ................... 31The National Agriculture, Food and Nutrition

Strategy ......................................... 31Tree Crop Subsector ............................... 32Livestock Industry .............................. 36Conclusion .... 3.............................. 37

(2) Industrial and Trade Policies ....... .......... 38Introduction - The Emerging Constraints to Growth .... 38Prospects and Issues ... o........................ 40Recent Government Initiatives and UpcomingPolicy Issues ... o.................... ........ 41(a) Industrial Policy Committee .................... 41(b) Tariff Reform ................ . ... . 42(c) Public Manufacturing Enterprises .............. 43(d) Export Policy .......l4...................... 46

Conclusion ........................................... 48D. Downside Risks 4...... ............................... 48

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Page No.

III. THE BALANCE OF PAYMENTS OUTLOOK AND AID REQUIREMENTS ......... 51A. Balance of Payments Prospects and Borrowing Strategy ..... 51

Export Prospects ......................................... 51Import Prospects ......................................... 54Foreign Exchange Requirements ......................... 55Borrowing Strategy: Official Sources of Funds ........... 56Private Sources of Funds ................. o............... 58

B. External Debt Management ................................ 58

STATISTICAL APPENDIX .............................................. 61

MAP

LIST OF TABLES IN THE TEXT

Table 1: Annual Real Growth Rates of GDP and SelectedSectors, 1978-84 .................................... 3

Table 2: Other Selected Economic Indicators, 1978-84 ........... 7Table 3: Balance of Payments Data, 1978-84 ........ .............. 11Table 4: Summary of Budgetary Operations, 1977-85 ................ 14Table 5: Historical and Projected Economic Indicators, 1980-94 ... 23Table 6: Value Added in Agriculture and Its Major Subsectors -

Average Annual Growth Rates and Shares of GDP ......... 26Table 7: Real Price Indices for Major Crops ..................... 27Table 8: A Co-tparison of Tax Incidence on Tea Exports in

Sri Lanka and Kenya ................................... 35Table 9: Budget Support of Public Manufacturing Enterprises ...... 44Table 10: Alternative Growth Scenarios, 1984-94 ................... 50Table 11: Base Scenario Balance of Payments Projections, 1984-88 .. 52Table 12: Export and Import Detail ............................... 53Table 13: Cumulative Foreign Exchange Requirements and

Sources of Financing, 1981-88 ......................... 56Table 14: New Commitments of Official Assistance and

Commercial Loans, 1981-88 ........................... 57Table 15: Public and Publicly Guaranteed External Debt

Outstanding at Year-End ............................... 59

Graph 1: Effective Exchange Rates, 1978-85 ....................... 46

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SRI LANKA - COUNTRY DATA

AREA POPUIATION &I DENSITY65.607 sq ka 15.6 million (mid-1984) 235 per sq km (1981)

Rate of Growth: 1.7% (from 1971 to 1981) 763 per sq km of agricultural land (1979)

POPULATION CRARACTERTSTICS (1983) hH !EALTH (1983)Crude Birth Rate (per '000): 26.2 Population per physician: 7,902Crude Death Rate (per '000): 6.1 Population per Bospital Bed: 349Infant Mortality (per '000 live births): 34.0 cJ

INCOME DISTRIBUTION (1978) ' DISTRIBUTION OF LAND OWNERSHIPZ of national income, highest quintile: 54 Z owned by top 10% of owners: -

lowest quintile: 4 % owned by smallest 10% of owners: -

ACCESS TO PIPED WATER (1981) ACCESS TO ELECTRICITY (1971)Z of population - urban: 47 Z of dwellings - total: 9

rural: 10 rural: 3

NUTRITION (1977) EDUCATION (1981)Calorie intake as % of requirements: 97 Adult literacy rate: 87%Per capita protein intake (grams per day): 43 Primary school enrollment: 98Z

GNP PER CAPITA IN 1983: $330 A/

OUTPUT IN 1984 BY SECTOR ANNUAL RATE OF GROUTH (Z. constant prices)

Value Added$ Million 3 1970-77 1977-84 1970-8f

Agriculture 1.519 28.0 2.0 4.0 3.0Industry S/ 1,347 24.8 2.1 5.3 3.9Services 2.566 47.2 3.7 7.1 L iTotal L/ 5.432 100.0 2.9 5.7 4A

GROSS DOMESTIC PRODUCT IN 1984US$ million _L

GDP at Market Prices 6.012 100.0Investment 1,567 26.1Gross National Savings 1.347 22.4Current Account Deficit 220 3.7Exports of Goods and NFS 1,755 29.2Imports of Goods and NFS 2,121 35.3

GOVERNMENT FINANCECentral Government

(Re million) K of GDP at Market Prices1984 1297 1983 1984

Current Receipts j/ 33,342 17.2 18.9 21.8Current Expenditures h/ 27.795 18.3 18.6 18.2Current Surplus 5.547 -1.1 0.3 3.6Capital Expenditures jf 21.105 7.3 13.7 13.8External Assistance 12.934 3.2 8.0 8.5

g Registrar General's Department.h/ Provisional.j 1981.Al World Bank Atlas estimate.s/ Manufacturing, mining, and construction.f GDP at factor cost.z/ Includes capital revenue.h/ Includes advance accounts.j/ Includes net lending.

South Asia Programs DepartmentMay 14. 1985

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SRI TAMA - COUNTRY DATA

MONET. CREDIT. AND PRICES 191M 1271 12Z 1979 19 1981 1982 1281 1984(end of period) (Rs Million)

Honey and Quasi Money 3.115 8.717 10,892 15.058 19.860 24,447 30,510 37.257 43,427Bank Credit to Public Sector 2.856 4,659 4,226 6,267 13.095 17,277 21,828 21,918 18,703Bank Credit to Private Sector .1,320 4,116 6.449 8,705 12,709 16,690 20,570 27,375 31,224

(Percentages or Index Numbers)

Money and Quasi Money as Z of GDP 22.8 23.9 25.5 28.7 29.9 28.8 30.5 30.6 28.4General Price Index (1970-100) 100.0 147.0 164.8 182.6 230.2 271.6 301.1 343.3 400.5Annual Percentage Changes in:

General Price Index +5.9 +1.2 +12.1 .10.8 +26.1 +18.0 +10.8 +14.0 +16.7Bank Credit to Public Sector +10.4 +7.7 -9.3 +48.3 +109.0 +31.9 +26.3 +0.4 -14.7Bank Credit to Private Sector +8.6 +40.5 +56.7 +35.0 46.0 +31.3 +23.2 +33.1 14.1

BALANCE OF PAYMENTS MERCRANDISE EXPORTS (1984)

1982 1983 1984 S Million Z(US$ illion)

Tea 620 42.0Exports of Goods, NFS 1,305 1,360 1,755 Rubber 130 8.8Imports of Goods, NFS 2.205 2,138 2.121 Coconut Products 60 4.1Resource Cap (deficit - -) -900 -778 -366 All Other Commodities 665 46.1

Net Factor Income -98 -138 -131 TOTAL 1.475 100.0Net Transfers & Remittances 264 274 277Balance on Current Account -734 -642 -220

EXTERNAL DEBT ($ Million) A/Direct Foreign Investment 63 37 36Met HILT Loans 403 292 311 December December

Disbursements 472 373 410 __1983 __194Amortization 69 81 99

Capital Grants 162 171 154 Total Outstanding 3,678 3,736Other Capital (net) 79 143 24Change in Reserves (+ - increase) -27 +1 +305 Total Outstanding

and Disbursed 2,214 2.420Gross Reserves (end-year) 527 522 735Net Reserves (end-year) -22 -21 284

Crude Oil and Petroleum Products DEBT SERVICE RATIO ]L C) 17.7 14.2Imports 590 468 419Exports 158 114 129

IBRD/IDA LENDING, March 31, 1985 CUSS Million)RATE OF EXCHANGE

IBRD IDAEndLJ979 End 182USS1.00 - Re 15.45 US$1.00 - Re 21.32 Outstanding and Disbursed 53.9 329.2Rs 1.00 - USS 0.06 Re 1.00 - USS 0.05 Undisbursed 10.4 287.0

End 1980 End 1983 Outstanding, includingUS$1.00 - Re 18.00 USS1.00 - Rs 25.00 Undisbursed 64.3 616.2Re 1.00 - USS 0.06 Re 1.00 - US$ 0.04

End 1981 End 1984USS1.00 - Re 20.55 US$1.00 - Re 26.28Rs 1.00 - US$ 0.05 Re 1.00 - USS 0.04

a/ Repayable in foreign currencies and vith a maturity over one year.bJ Ratio of debt service on public and publicly guaranteed MLT debt (including IF charges

and repurchases) to exports of goods and services.

South Asia Programs DepartmentMay 14, 1985

SUMMARY AND CONCLUSIONS

i. After almost ten years of low growth, Sri Lanka introduced a newdevelopment strategy during the late 1970s, and the economy made good economicprogress in several ways; output, employment and investment recorded substan-tial increases. GDP grew at 5.7% per annum in real terms between 1977 and1984. The rapid growth in paddy output was most impressive, with the resultthat rice imports declined from an average of 33% of total rice consumptionduring 1970-77 to only 12% during 1978-83. Today the country has virtuallyreached self-sufficiency in rice. The ambitious public investment program,dominated by the massive Mahaweli irrigation and power development, wasequally noteworthy; it was designed to create new sources of long-term growth.In support of this program, the country secured unprecedented levels of exter-nal aid.

ii. Some of the policies which made these achievements possible, however,also led to serious financial imbalances. For example, as the public invest-ment program gained momentum, it grew beyond the country's resourceavailabilities, thus contributing to unsustainable budgetary and balance ofpayments deficits and to undesirable levels of foreign commercial borrowing.More importantly, the imbalances in the budget and in the balance of paymentswere aggravated by an inadequate resource mobilization effort by the publicsector and by the existence of an overall policy environment which was notconducive to growth in several major subsectors of the economy, and especiallythe export sector. Exchange rate policy was of primary importance. Followingthe unification and depreciation of the exchange rate in 1977, the Sri Lankanrupee has more or less ccntinuously appreciated in real terms, thereby movingrelative incentives in favor of non-traded activities and against sectors suchas agriculture and industry. Within agriculture, paddy production was theexception: it was not taxed directly; prices were allowed to rise to worldmarket levels; inputs were subsidized; other government spending such asMahaveli directly assisted paddy; and it received substantial research andextension assistance. Other agricultural subsectors performed relativelypoorly. This was especially true of the tree crop sector, which was subjectto high export taxes and continued weak management in the state plantations.Industrial growth was also low. Although import tariffs were used to providehigher protection to manufacturing, the growth opportunities created by thisinward-looking policy were limited by the small size of the domestic market.Moreover, the tariff structure protected existing firms but discouraged thecreation of new industries, while the performance of publicly owned manufac-turing enterprises, which still contribute about 40% of manufacturing valueadded, was particularly poor. Export growth based largely on tourism andgarments was sporadic. Excluding export earnings from the latter twoactivities, the real growth rate of exports during 1979-84 was barely 2.1% peryear. Export earnings have remained concentrated on a few products, with teaand rubber alone accounting for half of total merchandise export value in1984.

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iii. Despite the considerable political and social unrest, real GDP grew at5% in 1984, matching the 1983 growth rate. After several years of precariousfinancial conditions, 1984 saw a significant reduction in both the externaland internal deficits. As a share of CDP, the overall budget deficit declinedfrom 13.4% in 1983 to 10.2% in 1984, while the current account deficit in thebalance of payments declined from 12.4% in 1983 to 3.7% in 1984. Net interna-tional reserves rose by $305 million. These achievements were partly theresult of Government policy, including the adoption of restrictive creditpolicies towards the private sector, the introduction of new revenue raisingmeasures and the containment of public spending. Yet the dominant factor inexplaining these developments was tea; export earnings from tea rose by $267million or the equivalent of 4.4% of GDP, while government revenue from teaexport taxes rose by Rs 2,794 million, the equivalent of 1.8% of GDP.

iv. The sudden decline in tea prices during early 1985 underscores thecontinued vulnerability of the Sri Lankan economy and hence the need to pursuepolicies which will stimulate growth in new activities. The two primary areasof growth in the recent past, viz., paddy and public investment supported bylarge concessionary foreign capital inflows, are expected to slow. As riceself-sufficiency is now being reached, this sector is likely to be a lessimportant source of growth in the future. In addition, public investment isunlikely to -- and indeed should not - expand very rapidly, in part becauseconcessionary aid inflows are expected to level off. Yet, if Sri Lanka is toabsorb the yearly addition to the active labor force and raise welfare levels,it is vital to maintain output growth rates of the order of 5% per annum. Theprimary issue facing the country, therefore, is to design and implementpolicies which will generate growth in alternative activities, especiallyexports. In addition, if growth is to be attained within a sustainable finan-cial framework, issues of investment strategy and domestic resource mobi-lization will also need to be addressed.

v. The Government is well aware of these problems and, as demonstratedby the 1985 budget, has continued the process of policy reform. The 1985budget introduced three new policy initiatives related to trade taxes, namelyimport tariff reform, a change in export taxes on tree crops, and a proposalto establish stabilization funds for tea and rubber. The import tariff reformis the first step in a phased program to reduce the variance in effectiveprotection and lower the average level of protection. The Government showedconsiderable resolve in pushing forward with this reform despite much internalopposition. The change in tree crop taxation, which accompanied the introduc-tion of the Medium Term Investment Program for the state plantations, resultedin an overall reduction in the tax burden on tree crops and thus helpedrestore producer incentives in the sector. A decision was also made to estab-lish stabilization funds for tea and rubber as a countercyclical measuredesigned to reduce macro-economic fluctuations in an economy dependent onprimary commodity exports with wide price fluctuations. In addition to thesebudgetary actions, the Government's report on a National Agricultural, Foodand Nutrition Strategy lays out a framework for important reforms in thesupport services which would greatly assist in creating conditions for

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broader-based agricultural growth. Also, to help develop a consistentindustrial policy framework, the Government has formed a high level IndustrialPolicy Committee, and it has continued to press hard to initiate reform of thepublic enterprise sector. These are major steps in moving towards an incen-tive framework which will allocate and utilize resources more efficiently.More needs to be done, however, if the Government is to achieve its objectiveof a rate of economic growth of at least 5% per annum in the coming years.

vi. Economic projections for Sri Lanka are more than normally uncertainbecause of the current social and political tensions in the country. Thereport's projections Assume that substantial progress will be made in resolv-ing the communal conflict. The analysis suggests that a 5% per annum rate ofeconomic growth is feasible and the current comfortable internationalreserves' position provides a good background against which to introducefurther policy reform. It is recognized, however, that the volatile domesticsituation may make the type of policy shifts advocated here difficult toimplement. This argues for patience, but it does not negate the importance ofcontinuing the process of reform.

vii. Recent growth rates in agriculture, when import substitution in ricewas the major driving force, are unlikely to be repeated. Nevertheless, therehabilitation of the tree crop sector together with a determined effort atagricultural diversification and continued but slower growth in paddy shouldlead to a fairly high rate of expansion of some 3.6% per year during the nextfive years. The annual real growth rate of industry, on the other hand,should accelerate from 3.5% during 1979-84 to 4.8% during the next five yearsbased on several anticipated developments. Processing traditional exports,which constitutes about one quarter of value added in industry, should grow at2 to 3% per annum, as opposed to stagnation in the past. Exports ofmanufactures, which make up some 15% of industrial value added, shouldincrease at 10% per annum given adequate incentives. Other industrial outputshould expand at 4.5 to 5.0% per annum, on the expectation that publicmanufacturing enterprises will be rationalized and the demand for domesticmanufactures will increase in response to rising real incomes and anappropriate exchange rate policy.

viii. The diversification of growth in both the agricultural and industrialsectors will need to focus on export markets and efficient importsubstitution. This means, in turn, providing appropriate incentives -- theexchange rate and trade taxes cum subsidy policies; providing support servicesincluding research and extension; developing infrastructure, especially roadsand rehabilitating existing ass3ts; and, pursuing institutional reforms,especially in respect of public enterprises and financial markets. It must beadded that the success of this strategy depends crucially upon continuedgrowth in, and unrestricted access to, world export markets.

ix. It was mentioned earlier that the Government has initiated some sig-nificant reforms in agriculture designed to revitalize parts of the sector.If these initiatives are to yield maximum benefits, they need to be set within

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an overall strategy designed to encourage the most efficient use of landresources. The investment in Mahaweli is beginning to open up new areas ofirrigated land and the country's level of rice imports is minimal. Sri Lavkais, therefore, well placed to diversify into other crops without sacrificingthe Government's prime objective of rice self-sufficiency. The challenge willbe to create a policy framework which encourages farmers to increase yieldsfrom existing crops and to move land out of paddy in some areas into alterna-tive crops. The latter development is more likely to occur where the returnto producing alternative crops is high and the domestic policy biases in favorof paddy are reduced. This will take time because farmers often perceivepaddy as an "insurance" crop, i.e., it does not have to be traded to providenutrition, farmers are familiar with optimal cultivation practices, andGovernment policy is designed to support paddy.

x. A program of reforms is required that reduces the risk and raises therelative return to the farmer of moving land into its most productive use.Such a program will include incentive, support service and institutionalcomponents. The first step should be to restore producer incentives by allow-ing international prices to have a greater influence on the relative returnsto different crops with due regard to stabilization objectives. This wouldentail restructuring taxation and subsidy policies around a more neutralframework, which includes cost recovery on publicly provided inputs such asirrigation water or fertilizer. This would also necessarily imply broadeningthe tax base in agriculture in order to equalize the tax effects on differentcrops. Second, there is a need to renew efforts to channel more resourcesinto the necessary support framework. Improved research and extension serv-ices for a wider variety of crops and the rehabilitation and maintenance ofthe infrastructure in rural areas appear to be high priorities. In addition,whenever the opportunity arises, institutional reform should be pressedforward, both to reduce direct Government involvement in production, marketingor distribution and to consolidate and rationalize the remaining administra-tive structure.

xi. As indicated, the Government has also begun to tackle in earnestseveral important constraints affecting the industrial sector. These initia-tives must now be pursued further. The phased process of tariff reform shouldbe continued and certain anomalies in the first stage corrected; theseinclude the exceptions which were allowed as well as the increase in BusinessTurnover Taxes payable on imports which partially offset the reduction inimport duties. Concrete action to reform the public enterprise sector shouldbe initiated early since this process is likely to take time. Above all it iscrucial for the Government to establish and maintain the exchange rate at alevel which will keep Sri Lanka internationally competitive in a wide range ofexporting and import substituting activities.

Kii. In pursuit of the growth objective it is also crucial that financialstability be maintained. To that end, the ratio of investment to GDP willhave to be reduced from the average of 29.4% during 1980-84 to around 26.0%during the next five years and the national savings rate will have to increase

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from 16.4% of GDP during 1980-84 to close to 20.0%. The reduction in theinvestment rate and the increase in the national savings rate will depend to alarge extent an budgetary policies. Private investment is projected toincrease as a share of GDP from 12.0% in 1980-84 to close to 14.0% during1985-89 in response to the growth policies discussed above. Public investmentwill therefore have to be reduced from more than 17.0% during 1980-84 to about12.0% during 1985-89, a target which the Government itself has accepted. Onthe savings side, it is important to maintain private savings at the levelachieved in recent years; this means following a more flexible interest ratepolicy which offers a positive real rate of interest so as to attract privatesaving. Budgetary savings have been negative in most recent years. This isprojected to change as a result of a combination of expenditure cuts andrevenue raising measures. Thus, budgetary savings are expected to average 3%of GDP during the coming years. Reducing current spending may be difficult;there is a clear need to raise public sector salaries and the Government hasbegun to provide increased allocations for much needed spending on operationand maintenance. While several categories of current spending are fixedobligations and cannot be cut, there remain within the Sri Lankan budgetseveral items of expenditure in the areas of subsidies, transfers and advanceaccount payments which can be cut without efficiency Loss. There is a clearneed to review the desirability of continuing to subsidize producer inputs, ofproviding transfers and advance account payments to inefficient public cor-porations which cannot be expected to pay back, and there are many instanceswhere increased reliance on user charges must be pursued. Nevertheless, evenif the Government succeeds in controlling current spending, there will con-tinue to be a need to raise revenues and restructure the tax system in orderto reach the savings target. The challenges to continued good budgetarymanagement are illustrated by developments during early 1985. The unexpecteddecline in tea prices may make it difficult to reach the 1985 budget revenuetargets. At the same time, the Government continues to be uader a great dealof pres3ure to admit new expenditures, partly due to the windfall accumulationof reserves during 1984.

xiii. The attainment of the 5% growth objective also rests on some importantassumptions regarding external factors. The accumulation of reserves whichoccurred in 1984 has established a base from which the immediate balance ofpayments outlook is healthy under most scenarios. Even with a successfulexport drive as assumed in this report, however, Sri Lanka will continue torequire substantial amounts of foreign assistance over the medium term. Inthe past the large resource gaps arising from successive budget deficits andslow export growth were financed by rapidly growing remittances and especiallyby the increased use of foreign concessionary capital made available bydonors. Remittances are unlikely to continue their past growth and conces-sionary capital has become much scarcer. The projections assume that remit-tances remain constant in real terms. Official grants are projected todecline even in current prices, while commitments of new concessionary loansremain constant in real terms at the current level of about $300 million.There is, however, projected to be some real increase in non-concessionaryfinancing from official sources, so that total commitments from official

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sources, loans and grants, are projected to remain constant in real terms.In the coming years the Sri Lankan economy will be forced to adjust to muchsmaller resource gaps than in the past and to rely partly on commercial bor-rowing to fill those gaps.

xiv. The balance of payments projections in this report depend, above all,on the restoration of international competitiveness; the significant realappreciation of the Sri Lankan rupee since 1977 must be reversed. In volumeterms export growth is projected to exceed import growth, although this willnot be the case in current prices during the next five years because ofdeteriorating terms of trade. The bulk of external finance needed during thenext few years to cover the current account deficit, amortization, repaymentsto the IMF and the addition to reserves, would come from official sources onhighly concessional. terms. New commitments from these sources, loans andgrants, would have to rise from $460 million in 1984 to $600 million by 1988.It should be noted that this level of commitments implies no growth in realterms. Commitments of official assistance have declined substantially fromthe peak of $800 million in 1981. In the past two years they have averagedabout $450 million a year, partly because both Government and donors made aconscious effort to limit the introduction of new projects in a public invest-ment program which had grown beyond the country's absorptive capacity.Current indications are that the aid donors are likely to make new commitmentsamounting to about $500 million during 1985. For 1986 we would also recommendto the donors a level of new aid commitments of the order of $500-550 million.This level of support is a vital component in the overall strategy of restruc-turing the Sri Lankan economy at the same time that foreign commercial borrow-ing is contained at a manageable level. Areas most urgently in need of sup-port include rehabilitation of existing irrigation schemes, completion ofdownstream work in Mahaweli, rehabilitation of the road network, power trans-mission and generation, and telecommunications. Financing of local expendi-tures in support of the Government's own efforts to raise public sectorsavings and reduce the overall budget deficit should also receive highpriority.

xv. Together with the strengthening of Sri Lanka's export sector thecountry would also gradually become creditworthy for increasing levels ofcommercial borrowing. The balance of payments projections in this reportassume that new commitments of private loans rise from $130 million in 1985to about $285 million by 1988. A substantial portion of this commercialborrowing would be related to cofinancing requirements for some large projectswith good economic justification, such as the major upcoming power projects.

xvi. With a concerted effort to build up exports, strong support fromdonors and prudence in che use of commercial debt, Sri Lanka's debt servicingburden will be manageable. The public debt service ratio implicit in thebalance of payments projections in this report, including IMF charges andrepurchases, rises to 18.8% in 1987 but then declines to 18.0% in 1988 and15.1% in 1994. The most crucial element in balance of payments management isto ensure that the export growth targets are achieved. If the Government were

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to maintain a high rate of investment and GDP growth through increasedreliance on foreign borrowing to compensate for the shortfall in exportreceipts, the external debt service ratio would quickly rise to unacceptablelevels, soon restricting the country's access to voluntary foreign capitalinflows. On the other hand, if the Government reacts to the weaker exportperformance by curbing investment and import growth and reducing the growth ofoutput, incomes and employment, the rate of growth of total consumption wouldeventually be reduced severely to unacceptably low levels, jeopardizing muchof the economic progress made during the past few years.

xvii. In sum, attaining the growth targets postulated in this report in thecontext of internal and external financial stability, entails a policy agendafor the Government which includes:

(1) an appropriate exchange rate policy and changes in trade taxesand subsidy policies to create a producer incentives' frameworkwhich is more neutral between different activities: thisincludes, among others, a further review of tree crop taxation,and continuation of the phased process of tariff reform;

(2) increased emphasis on support services, including research andextension, for broad-based agricultural growth;

(3) investment in infrastructure such as roads, rehabilitation andpower;

(4) concrete action towards public enterprise reform;

(5) a public investment program not exceeding around 12% of GDP; and

(6) an increase in public savings to around 3% of GDP through acombination of expenditure cuts and revenue increases.

To complement the above, the donor community should consider:

(1) maintaining total official commitments roughly constant in realterms in the future, and in the range of $500-550 million duringthe coming year;

(2) giving priority to meeting needs related to rehabilitation ofexisting irrigation schemes, completion of downstream work inMahaweli, rehabilitation of the road network, power transmissionand distribution, and telecommunications;

(3) continuing to finance local currency expenditures; and

(4) continuing to provide technical assistance to the Government.

Chapter I: RECENT ECONOMIC DEVELOPMENTS

A. Introduction

1. Sri Lanka recorded a substantial improvement in a number of macro-economic indicators in 1984 despite considerable political and social unrest.Real GDP grew at 5%, matching the 1983 growth rate. Given the disruption ofeconomic activity from physical damage and reduced private investment, thisrepresents a considerable achievement. In addition, there was a significantnarrowing of both the external and internal deficits, due partly to a con-tinued improvement in Sri Lanka's terms of trade and partly to Governmentpolicy. The reduced current account deficit in the balance of payments wasfinanced largely by concessionary foreign aid inflows. At the same time therewas an unprecedented $300 million accumulation of foreign exchange reserves,largely as a result of increased earnings from tea exports. The increase inavailable resources enabled the Governmeknt to reduce its overall demand fordomestic credit and its outstanding debt to the banking sector by a repaymentof Rs 2.6 billion. These favorable developments were supported by tightermonetary policy, which, coupled with improved food supplies later in the year,led to a reduction in the inflation rate to 9% during the 12-month periodending December 1984. The one negative trend in the macro-economic indicatorswas the steady appreciation of the currency. The rupee moved from Rs 25.2 perU.S. dollar at the beginning of 1984 to Rs 26.2 by December 1984, implying aconsiderable appreciation against almost all other major currencies.1/

2. A dominant factor in explaining the performahce of the economy in 1984were the favorable developments in the tea sector. Continued high tea pricescoupled with a 16% increase in output resulted in a marked increase in bothexport earnings and Government tax revenue. Other favorable factors werehigher coconut prices, the continued growth in garment exports, the recoveryof the manufacturing sector, and lower world inflation; unfavorable factorswere the reduced paddy and coconut crops and the decline in tourism.

3. While the above indicators reflect a strong economic performance in1984, there remain a number of structural weaknesses which the Government willneed to continue to address if the recent favorable growth rate is to besustained over the medium term. When one looks at the sectors of the economythat will have to provide growth in the future there is reason for someconcern. The good performance of 1984 at the same time underscores the vul-nerability of the economy to fluctuations in earnings in the tea sector.Without the policies needed to stimulate the growth of new exports and effi-cient import substitution activities, economic performance will not only

1/ See Chapter II for a detailed discussion of movements in the realexchange rate.

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remain unnecessarily dependent on a few exogenous factors but the potentialfor future economic growth will also be limited.1/

4. The Government is well aware of this problem and, as demonstrated bythe 1985 budget, has continued the process of policy reform. The remainderof this chapter describes recent Government policy initiatives in the contextof a more detailed analysis of the sources of growth, monetary policy, thebalance of payments outcome and budget performance.

B. Macro-economic Developments

(a) Sources of Growth

5. The recent growth performance of the leading sectors and subsectorsis presented in Table 1. The past year represents something of a break withprevious trends in a number of ways. First, tea production registered animpressive 16% growth in volume over the drought-induced level of 1983,reversing the previous declining trend. Producers responded quickly to theimproved weather conditions, continued high world prices, and a renewedcommitment by the Government to rehabilitate the stagnating tree cropssector. The price rise in late 1983 through 1984, plus a recent adjustmentin the tax structure provided producers with the opportunity to earn substan-tial profits.

11 A discussion of medium-term trends under different policy scenarios isfound in Chapter II.

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Table 1: ANNUAL REAL GROWTH RATES OF CDP AND SELECTED SECTORS, 1978-84(at constant 1970 factor prices)

1978 . 1979 1980 1981 1982 1983 1984 1977-84 a!

Agriculture 5.4 2.0 3.1 6.9 2.6 5.3 2.1 4.0Paddy 12.7 1.4 11.9 3.6 -3.4 15.2 -3.5 4.5Tea -4.3 3.5 -7.5 10.0 -10.7 -4.5 16.2 -0.7Rubber 5.6 -0.9 -13.0 -6.7 0.6 12.3 3.7 -2.0Coconut 15.4 6.4 -11.0 11.5 11.3 -8.3 -7.0 2.0

Manufacturing and Mining 10.0 4.8 1.6 5.0 4.6 2.2 9.2 4.6Export Processing 2.1 4.4 -9.8 7.6 -5.3 -4.6 9.0 -0.6Factory Industry 11.0 4.0 5.0 4.0 8.9 2.0 14.0 6.1Small Industry 13.2 9.8 0.0 5.1 10.1 4.0 4.2 6.1

Construction 28.3 20.9 11.0 3.0 -2.0 1.0 -0.1 6.0

Services 7.6 7.8 8.0 6.4 7.0 6.6 5.8 7.1

GDP 8.2 6.3 5.8 5.8 5.1 5.0 5.0 5.7

a/ Annual real growth rate over 1977-84 period using least squares method ofestimating trend growth rate.

Source: Central Bank of Ceylon.

6. Second, the favorable weather conditions for tea had the oppositeeffect on paddy. Heavy flooding in certain regions early in 1984 resultingin a poor Maha crop, which normally accounts for about two-thirds of totalpaddy output during the year. Although the 1984 Yala crop was a record,paddy output declined by 3.5% in volume in 1984 after several years of almostuninterrupted growth. It is anticipated, however, that the 1985 Maha cropwill be good. The improved performance of the paddy sector has been the maincomponent in supporting agricultural growth in recent years. During 1977-84,value added in paddy increased by more than 4.5% per year in real terms; riceimports declined from an average 33% of total rice consumption during 1970-77to only 12% during 1978-83. Imports during 1984 amounted to only 40,000 NT,by far the lowest level in many years and equivalent to about 2% of totalconsumption. As a result of Government policies over the past few years,including investments in irrigation, strengthened support services forfarmers and the freeing of prices, the paddy sector has been considerablystrengthened and its vulnerability reduced. Without these improvements, thedecline in paddy output last year would have been even more pronounced, andthe need for imports much increased.

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7. Much of the gain in paddy production has resulted from producers'response to improved incentives. The Government has withdrawn from interven-tion in both the direct procurement of rice (allowing private traders tomarket the produce which has lowered transaction costs) and in fixing marketprices. Domestic rice prices have been allowed to increase to parity withinternational prices which has resulted in an upward adjustment in the domes-tic selling price. The Government's role has been reduced to providing afloor price for domestic paddy and the use of stocks to stabilize the marketin times of supply shortages. Given present consumption patterns, thecountry has virtually reached rice self-sufficiency. However, the Governmentintends to pursue the goal of self-sufficiency in cereals further through thesubstitution of rice for imported wheat by altering relative prices. It isnot clear what the domestic resource costs of this policy are. Additionalincrements in rice output may become more costly to attain, and the benefitsof increased rice production must be weighed against the economic advantageof using the land for alternative crops either for the local market or forexports.

8. Third, the manufacturing sector recorded an unusually high growthrate in 1984. Part of this was directly related to the increase in teaproduction as demonstrated by the 9.0% growth in the export processingsubsector, and the Ceylon Petroleum Corporation (CPC) operated at or nearfull capacity. The higher growth rate in 1984 also reflects a more generalrecovery from 1983 when output was constrained by continuous power shortages.The commissioning of some of the Mahaweli hydroelectric plants considerablyeased the situation, resulting in increased industrial capacity utilizationduring 1984. One area of suscained real growth in the manufacturing sectorwas garment exports. Due to increased demand caused by the strong recoveryof the U.S. economy plus entry into new product markets, garment manufac-turers were able to increase exports by 47% in nominal terms.

9. The growth performance of other sectors of the economy remainedsimilar to past trends. The output of agricultural commodities (other thantea and paddy discussed above) continued to grow slowly, especially exportcrops. While specific assistance has been provided for particular crops,under the guidance of the Export Development Board,1/ a number of otherfactors related to the supporting infrastructure, extension services andother components of the incentive structure, particularly the exchange rate,negated these positive incentives. A renewed effort at creating the environ-ment needed to stimulate a more efficient and diversified use of agriculturalresources is essential for future growth. The elements of such an effort arediscussed in Chapter II.

1/ For example, some success has been attained under the ExportDevelopment Board sponsored Village Export Promotion Scheme.

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10. The same or similar shortcomings in incentives and infrastructureconstrained growth in new manufacturing activities. As discussed in thefollowing section, private sector investment actually experienced a sharpdecline. Although the reluctance to enter new investments is, in part, areaction to the increased uncertainty created by the continuation of ethnicviolence, part is due to inadequate policy measures. For example, theviability of a number of relatively new export-oriented manufacturingenterprises appears to be threatened by the appreciation of the real exchangerate.

11. Both the service and construction sectors were also adverselyaffected by Sri Lanka's domestic problems. Tourism declined below thealready low 1983 level, with an increase in cancellations occurring inNovember for the coming season. Construction activity has also slowed dueto the completion of a number of large projects and the general increase inuncertainty fostering a "wait and see"~ attitude before making investmentdecisions.

(b) Investment and Savings

12. Beginning in 1979, Sri Lanka allocated more than one-quarter of itsannual output to gross domestic investment. As shown in Table 2, in 1980 itreached the comparatively high ratio of one-third of GDP. The CentralGovernment, public corporations and the private sector all participated inthe investment boom, dominated by the construction of the massive Mahawelipower and irrigation system. As the accelerated portion of the Mahaweliprogram approached completion, the investment ratio began to fall; the slow-down in investment is apparent beginning in 1983 and continuing in 1984 whenthe ratio dropped to 26% of GDP. In the absence of reliable disaggregatedinvestment data, it is difficult to evaluate the source of declining invest-ment in the public sectors. However, the drop in private investment isdisturbing since it represents a major source of growth in the economy and isexpected to provide an even greater impulse to output growth in the future.Part of this decline probably reflects the uncertainty created by the ethnicviolence which escalated in July 1983. Both domestic and foreign privateinvestors have been cautious in making new commitments as they wait to seehow the domestic situation develops.

13. The financing of the boom is clearly reflected in Table 2. Grossdomestic savings as a share of GDP declined in the late 1970s and then stayedflat during the period of the rapid build-up of investment until 1983 and1984. Thus remittances (reflected in net private transfers from abroad) frommigrant workers, mostly in the Middle East, helped offset the decline in

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domestic savings, but most of the resource requirements was financed byincreased concessioiary and commercial foreign capital inflows.1/

14. While the improved terms of trade for 1983 resulted in a moderatelyreduced need for foreign savings, the latter declined sharply in 1984 due toa significant increase in domestic savings. Private savings increased byclose to 3% of GDP and, more significantly, public savings became stronglypositive for the first time since 1977, also increasing by slightly more than3% of CDP. In addition, national savings increased at a time when privateremittances declined as a share of GDP due to the weakened demand for foreignlabor in the Middle East market, following the fall in oil prices. Most ofthe increase in savings derives from higher tea prices, which has raisedprivate incomes and public revenues. It would appear that individuals andGovernment view 1984 as something of a boom year during which savings shouldbe increased to provide precautionary balances against future unexpecteddeclines in income.

1/ The concessionary and commercial inflows are further discussed below inconnection with the budget and the balance of payments.

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Table 2: OTHER SELECTED ECONOMIC INDICATORS, 1978-84(% of GDP at current prices)

1978 1979 1980 1981 1982 1983 1984

Cross Domestic Investment 20.0 25.8 33.8 27.8 30.6 28.8 26.1Central Government 6.0 7.7 9.8 5.2 4.9 5.1 5.6Public Corporations a! 5.9 9.1 11.4 11.0 14.1 11.5 10.8Private 8.1 9.1 12.6 11.6 11.6 12.2 9.7

Cross National Savings 15.5 14.7 14.0 14.1 15.3 16.4 22.4Central Government b/ -1.4 0.2 -3.8 -1.7 -1.4 0.3 3.6Private and PublicCorporations 16.9 14.5 17.8 15.8 16.7 16.1 18.8

less - Net Private Transfersfrom Abroad 0.8 1.4 3.4 4.6 5.5 5.2 4.6

less - Net Factor Incomefrom Abroad -0.6 -0.5 -0.6 -2.2 -2.0 -2.6 -2.2

Gross Domestic Savings 15.3 13.8 11.2 11.7 11.8 13.8 20.0

Foreign Savings 4.5 11.1 19.8 13.7 15.3 12.4 3.7

Colombo Cost of Living(Z change, year to year) 12.1 10.8 26.1 18.0 10.8 14.0 16.7

Money Supply (Z changeend-December to end-December) 25.0 38.2 31.9 23.2 24.6 21.7 16.8

a/ This estimate includes budgetary capital transfers plus extrabudgetarysources of finance. It should be noted that the Government definespublic corporations to include a number of Government departments, inparticular the Mahaweli Development Board and the National HousingDevelopment Authority, which are not expected to finance investmentindependently of budget transfers. If only Mahaweli is excluded,investment by public corporations stays flat at approximately 6.5% of GDP.

b/ Equals current savings of the Central Government.

Sources: Central Bank of Ceylon and Ministry of Finance and Planning.

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(c) Monetary Policy, Inflation and the Exchange Rate

15. The decline in private sector investment caused a weakened demand forcredit. This also coincided with a reduction in net credit to theGovernment, due to the improved revenue derived from tea, and with severalpolicy measures designed to tighten domestic credit expansion. In an attemptto slow the rate of growth of domestic liquidity, the authorities introducedquantitative credit restrictions to the private sector, resumed auctions ofCentral Bank securities and increased the marginal reserve requirements onbank liabilities. Although the expansion in money supply remained high (at16.8% for the 12-month period ending December 1984), this does represent animprovement over 1983.

16. The decline in the growth of liquidity was an important reason forthe decline in inflation. After a higher inflation rate in the early part ofthe year had pushed the average mid-year Colombo cost-of-living index up to16.6%, inflation declined significantly towards the end of 1984 (to 9% fromDecember to December) partly because of the increased domestic availabilityof important food crops. The combination of increased domestic savings,tight monetary policy and a lower inflation rate has reversed the previousupward pressure on interest rates, causing both deposit and lending rates todecline recently. If inflation and the public sector's demand for credit canbe held in check, and leaving aside the climate of uncertainty noted above, afurther reduction in interest rates could help provide an important boost toprivate sector investment.

17. Inflation is also being suppressed by the Government's exchange ratepolicy. The Sri Lankan rupee has been allowed to depreciate only slightlyagainst the U.S. dollar in recent months, which, together with the strengthof the latter, has meant a real appreciation against all other majorcurrencies. While the objective of the Government's exchange rate policyunderstandably is to avoid domestic price increases in a few basic consumeritems during a period of social and political tension, this policy has impor-tant negative implications for the longer-term growth of the economy. Itretards the development of new growth activities, i.e., non-traditionalexports and efficient import substitutes, and thereby delays the creation ofadditional employment and income earning opportunities.

C. The Balance of Payments

18. The balance of payments outcome in 1984 was a dramatic reversal fromprevious years. This is shown in Table 3 below. Export receipts increasedby some $400 million to $1.75 billion while imports remained constant at $2.1billion. As a result, the current account deficit, which averaged 16.3% ofGDP in 1980-82, dropped from 12.4% in 1983 to 3.7% in 1984. Net interna-tional reserves, which had declined since 1980 and stood at minus $21 million

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by the end of 1983, rose by $305 million during 1984.1/ Sy the end of 1984,gross official reserves stood at about $600 million, the equivalent of 3.1months of imports of goods and services.

19. Merchandise exports increased by 39% in nominal terms mainly owing toa strong performance of tea and garments exports. Tea export volume rose by30% from a drought-induced low level of 158 million kgs in 1983, while teaexport prices rose by 36Z.2/ The,increase in volume was at least in part aresponse to the higher prices, improved producer margins and a series ofmeasures taken by the public corporations to provide management and workerincentives in the field. Garments exports increased by 47% in nominal terms,because of a strong effort by the industry to increase its output and exportsof products in non-quota categories, primarily to the U.S. market. Thestrong export performance of tea and garments was somewhat dampened by thecontinued stagnation of most other merchandise exports. Moreover, thepolitical uncertainty also contributed to a decline in earnings from tourism,while the recession in the Middle East resulted in stagnant workers'remittances.

20. On the import side, merchandise imports in 1984 remained at roughlythe 1983 level in current dollars. A sizeable increase in the imports ofintermediate goods was offset by reduced spending for imports of food, otherconsumer goods and petroleum. Apart from price declines such as petroleum,major factors contributing to the decline in imports include the substantialdrop in rice imports, credit restrictions in the case of non-essentialimports and the overall climate of uncertainty in Sri Lanka which depressedprivate investment activity and appar-itly contributed to a rundown ofstocks.

21. The current account deficit declined to $220 million, equivalent to3.7% of GDP. The increase in the level of export earnings was responsiblefor a decline in the public debt service ratio from 17.7% in 1983 to 14.2% in1984. Without the rise in export prices the debt service ratio would haveremained at close to 18% in 1984. A key favorable factor affecting thebalance of payments has been the 33% improvement in the terms of trade since1982, both because of rising export prices and declining import prices. Theroughly $500 million decline in the current account deficit since 1982 isequivalent to this terms of trade improvement.

1/ Net international reserves are defined as gross foreign assets minusshort-term liabilities of official entities (Central Bank and Government)and commercial banks, and the net IMF position.

2/ Export volumes increased by more than domestic production during 1984due to the carry-over of stocks from 1983.

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22. The positive balance of payments developments in 1984, however,should not obscure basic long-term trends. The most important of these isthe low volume growth of exports, and the concentration of earnings on a fewproducts. For example, tea and rubber alone accounted for 51% of totalmerchandise export value in 1984. With regard to traditional products, andabstracting from fluctuations due to the weather, the export volumes of tea,rubber and coconuts have essentially stagnated since 1978 and, especially inthe case of rubber and coconuts, declined when compared with the early 1970s.Even in the case of tea, the 1984 export level was only 6% above thatachieved in 1978 and below that of 1970. These trends result from a neglectof necessary investments during a prolonged nationalization process in theearly 1970s, followed by the creation of numerous and poorly coordinatedministries and serious managerial problems in the state plantations. Inaddition, the overall incentive framework provided low to negative marginsfor both public and private producers. In recent years, however, theGovernment has been actively pursuing policies designed to reverse the trendsof the 1970s, culminating in the Medium Term Investment Program (MTIP) forthe State Corporations (Chapter II).

23. The real growth of non-traditional exports is difficult to judge inthe absence of reliable price deflators. However, in the case of otheragricultural exports (i.e., apart from tea, rubber and coconuts), these havestagnated in nominal dollar terms since 1978 and in fact declined during thepast couple of years. Starting from an almost insignificant base, exports ofother manufactured goods, apart from garments, grew fairly rapidly in valueuntil 1982; they have stagnated since then. The one success story amongmerchandise exports in recent years is garments. It results from a combina-tion of Sri Lanka being a new entrant in a quota-dominated export area andefficient domestic manufacturing based on imported inputs. Two other sourcesof foreign exchange earnings, tourism and workers' remittances, both startingfrom a low base, grew rapidly until 1982. Since then, earnings from bothsources have leveled off.

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Table 3: BALANCE OF PAYMENTS DATA, 1978-84(US$ million)

1978 1979 1980 1981 1982 1983 1984

Exports (G+NFS) 950 1,135 1,297 1,346 1,305 1,360 1,755(Merchandise fob) (846) (982) (1,065) (1,066) (1,014) (1,062) (1,475)

Imports (C+NFS) 1,081 1,540 2,205 2,055 2,205 2,138 2,121(Merchandise cif) (999) (1,450) (2,051) (1,877) (1,990) (1,918) (1,911)

Net Factor Income -15 -15 -26 -97 -98 -138 -131(M&LT Interest Payments) (-25) (-28) (-33) (-50) (-69) (-86) (-103)

Net Current Transfers a/ 22 48 136 203 264 274 277

CURRENT ACCOUNT -124 -372 -798 -603 -734 -642 -220Net Direct Investment 2 47 43 49 63 37 36Of--*icial Grants 58 144 138 162 162 171 154Bilateral and MultilateralLoans (net) 206 149 151 154 170 237 261Disbursements (239) (181) (190) (186) (204) (280) (310)Amortization (33) (32) (39) (32) (34) (43) (49)

Private Loans (net) b/ -29 9 84 182 233 55 50Disbursements (2) (25) (96) (194) (268) (93) (100)Amortization (31) (16) (12) (12) (35) (38) (50)

Other Capital c/ -19 71 162 23 79 143 24Change in Net Reserves(- indicates increase) -94 -48 220 33 27 -1 -305

(as % of GDP)

Current Account -4.5 -11.1 -19.8 -13.7 -15.3 -12.4 -3.7Official Grants 2.1 4.3 3.4 3.7 3.4 3.3 2.6Bilateral & MultilateralLoans (net) 7.5 4.4 3.8 3.5 3.5 4.6 4.3

Private Loans (net) -,.1 0.3 2.1 4.1 4.8 1.1 0.8

Memo Items:Public Debt Service ($ mn)

Public M&LT Loans 89.0 76.5 84.2 93.4 137.5 166.9 202.0IMF 40.1 49.1 58.6 89.6 74.0 82.3 55.0

Debt Service Ratio 13.3 10.7 10.6 13.3 15.7 17.7 14.2Export Price Index 98.8 103.6 114.3 107.8 100.0 106.3 121.1Import Price Index 74.1 88.8 106.6 106.8 100.0 93.6 90.8Terms of Trade 133.3 116.7 107.2 100.9 100.0 113.6 133.4

a/ Mainly private remittances.b/ With Government guarantee.c/ Includes short-term capital, non-Government guaranteed M&LT capital,

SDR allocations, and errors and omissions.

Sources: Central Bank; and Bank staff estimates.

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24. The poor overall performance of exports reflects the absence of anincentive framework, encouraging efficient export or import substitutionactivities. Policies are now being put inzo place to revitalize the"traditional" export sector. In addition, the Export Development Board hasinstituted a number of export promotion measures designed to assist specificnon-traditional exporters.1/ Yet, in terms of the major price componentsdetermining a country's competitiveness -- the exchange rate and the tariffstructure -- policy has been biased in favor of production for the domesticmarket. In recognition of this problem, the Government, in its 1985 budgetsubmission, has taken a major step to improve resource allocation iy commenc-ing a process of tariff reform. However, exchange rate policy has continuedto allow the rupee to appreciate, thus encouraging imports, moving incentivestowards non-traded activities and discouraging the development of non-traditional exports.

25. Between 1978 and 1982, responding to the liberalization policies andto increases in the level of investment expenditure, imports grew con-siderably faster than exporLs in volume terms, but they have declined mar-ginally since. Major elements in constraining import growth since 1982 havebeen the continued successful program of import substitution in rice and therestraint in investment spending.

26. Balance of payments developments in Sri Lanka during the past fewyears have also been influenced heavily by budgetary policy. Large budgetarydeficits, starting in 1980, increased the demand for imports and necessitatedundesirable levels of foreign commercial borrowing. More recently, theGovernment has taken firm action to reduce these deficits, yet financing themhas resulted in a fairly rapid increase in the debt service ratio. Inaddition, movements in the international terms of trade clearly play a majorrole in bil.ance of payments developments in an economy such as Sri Lanka.While the terms of trade during 1983/84 are roughly at the level of 1978/79,the substantial deterioration in between, complicated macro-economic manage-ment and was partly responsible for the need to resort to high levels offoreign borrowing and the increased debt service burden.

D. Public Finance

(a) Introduction

27. In order to place public finance developments during 1984 as well asthe 1985 budget into the proper perspective, it is worthwhile to review somelonger-term trends in government finances as illustrated by Table 4. Theoverall picture shows total public expenditures increasing rapidly withouta corresponding increase in revenues. The result is a budgetary deficitincreasing from 5.8% of GDP in 1977 to a peak of 23.1% in 1980 and declining

1/ These are discussed in more detail in Chapter II.

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thereafter to 10% in 1984. Until 1979 the higher expenditure levels wereoffset by increased domestic borrowing and significant additional inflows ofconcessionary aid and grants, even to the point that the Government couldcontinue to add to reserves. However, in 1980 the resources needed to com-plete ongoing public investments began to exceed the inflow of concessionaryforeign finance and the Government turned to commercial foreign loans andcontinued high levels of domestic borrowing to finance the resource gap.This resulted in increased debt service payments which, given Sri Lanka'spoor export performance and declining terms of trade up to 1983, began toraise important questions concerning the overall creditworthiness of theeconomy. Ir addition, the large budgetary deficits resulted in increasedrates of inflation and an appreciation of the currency. Having been providedwith a renewed mandate in the national referendum/elections of 1982, theGovernment has succeeded in reducing budget deficits from a high 17.3% of GDPin that year to an estimated 10.2% in 1984.

28. Part of the explanation for the unsustainable deficits experiencedin the early 1980s has been a persistently weak public revenue mobilizationeffort in relation to expenditure levels. In the face of declining worldmarket prices and reduced domestic output of tree crops,1/ and thus reducedearnings from export duties, there was an inadequate effort to tap alterna-tive sources of revenue. Indeed, as shown in Table 4, the share of non-export tax receipts in CDP in 1982 was below that of 1978. The subsequentimproved revenue effort in 1983 and 1984 (to 18.9% and 21.8% of GDPrespectively) originated from three main sources: the marked increase in theworld price of tea, the treatment of Central Bank profits as revenue; and anumber of other short-term taxation measures related to specificdevelopments, e.g., the rehabilitation levy following the July 1983 riots.

1/ The factors leading to a decline in tree crop output are discussed inChapter II in the section dealing with agriculture.

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Table : BUNM OF BUDGEARY OPERATIONS, 1977-85 jLf(in percent of GDP)

Provisional Provisional Budget12M1 12LS 1M 19 0 19.1 1982 . 1983 . 9a 195

Revenues 16-.7 26.1 23.0 IL.2 17.4 jjj L. ,2 ?! 20.5Income Tax 0.8 0.9 , 0.7 0.6 0.7 0.8 0.7 0.7 0.7Corporate Profit Tax 1.8 1.7 1.9 2.6 1.7 2.1 2.0 2.5 2.4Export Taxes 3.3 11.3 9.1 5.8 4.5 2.6 2.8 4.2 3.2Import Duties 1.5 3.4 4.3 4.4 3.2 2.7 3.3 3.4 2.9Business Turnover Tax 1.8 2.5 2.3 2.5 3.3 4.0 5.1 5.4 6.1Excise Tax 2.3 3.1 2.5 2.5 2.2 2.1 1.9 1.8 1.8Other Taxes 3.4 1.4 0.5 0.4 0.5 0.5 0.5 0.3 0.3Other Non-tax Revenue 1.8 1.8 1.7 1.1 1.3 1.3 1.4 2.4 2.3Transfer of Central

Bank Profits - - - - - - 1.2 1.1 0.8

- Current Expenditure 16.6 23.4 20.8 19. 17.3 18.4 17.7 16.6 16.8' Wages and Salaries 5.0 5.4 5.5 4.8 4.3 4.4 4.1 3.7 3.9

Goods and Services 2.1 2.7 2.8 2.8 2.0 2.5 2.4 2.1 3.6Pensions 1.1 1.1 1.1 1.1 1.1 1.4 1.5 1.4 1.3Transfers to Public

Corporations 0.4 2.5 1.8 2.4 1.6 1.7 1.6 { (Transfers and Subsidies to {4.6 (3.6

Households and Other 5.2 8.5 6.3 4.6 3.8 3.3 2.7 { (Interest. Domestic 2.3 2.5 2.6 2.8 3.7 4.2 4.4 4.1 3.6Interest, Foreign 0.5 0.7 0.7 0.6 0.8 0.9 1.0 1.1 1.1Underexpenditure Provision - - - - - - - -0.4 -0.3

Advance Accounts 12 4-1 2. 4.6 1.8 - 0.9 1.6 0.1

Current Account Balance -0.1 -1.4 0.2 -3.8 -1.7 -1.4 0.3 2A L

Capital Expenditure 5--l 12.3 14.0 1-3 13.8 1L.1 13.7 13.8 12.3

Overall Deficit - -13.7 -13.8 -23.1 -1. -17.3 -1 -10.2 -8.7

Foreign Finance (net) .. 2S_ 7.1 1- 8.1 1.1 8.0 8-5 7-0Net borrowing ( 7.5 4.5 5.3 5.7 4.7 5.1 5.7 4.9

(Gross commercial) ( 2.9 (-) (-) (1.4) (2.0) (1.2) (1.1) (-) (0.3)Grants { 1.5 2.6 3.9 3.2 3.4 2.9 2.8 2.1

Domestic Finance (net) 2..2 4.7 6.7 13.9 6.6 9. 5 1.7 1.7Banking System -2.0 0.4 1.2 10.6 4.5 3.7 0.4 -1.7 -0.6Other 4.9 4.3 5.5 3.3 2.1 5.5 5.0 3.4 2.3

n/ Import duty rebates have been deducted from both revenues and current expenditures from 1981onwards. The table is therefore not fully consistent with the Statistical Appendix tables.


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(b) 1984 Budget Outcome

29. The estimated actual total revenue collection in 1984 exceeded budgetestimates by over Rs 6.0 billion or 4% of CDP; it represents a significantimprovement in performance. Part of this revenue gain is due to higher thanexpected inflation; over Rs 4.0 billion is derived from additional taxes oninternational trade, of which Rs 2.5 billion is solely due to higher thananticipated tea prices and volumes; and Rs 1.5 billion is the gain fromadditional import duties. While increased tariffs contributed to the revenuegain, a significant share came from an unexpected change in the compositionof imports towards higher taxed commodities.

30. The other significant source of additional revenue was from non-taxsources. This amounted to approximately Rs 1.3 billion above the 1984 budgetforecast, and originated essentially from a 50% after tax "profits dividend"extracted from all public corporations (inclusive of banks and manufacturingenterprises); and a large capital receipt from CPC. CPC was in a position tomake this payment due to higher than expected profits resulting fromfavorable relative price movements.l/

31. Current expenditures in 1984 were held close to budget estimates withadditional expenditures being limited to transfers and subsidies and defense-related programs. Advance accounts expenditures, however, exceeded budgetestimates by Rs 2.2 billion. These payments were made to a variety of publicagencies or enterprises, including the Insurance Corporation (to settleclaims arising from the July 1983 riots), the Fertilizer ManufacturingCorporation, the Cement Corporation, the Ceylon Transport Board and a fewother public manufacturing enterprises; the monies were provided to coverunexpected operating losses or capital costs. Advance accounts expenditureshave often exceeded budget estimates due primarily to the poor performance ofa few public enterprises. If budget targets are to be met, this category ofexpenditure needs to be carefully estimated and controlled, perhaps with somepenalty applied to those users of the funds that persistently are unable tomake repayments.21

32. Capital expenditures exceeded budget estimates by Rs 4.6 billion,with foreign aid plus bookkeeping entries accounting for about Rs 2.7billion. The remaining Rs 1.9 billion was accounted for by additional expen-ditures on Mahaweli (Rs 800 million), defense (Rs 824 million) plus a number

1/ Capital receipts are included in non-tax revenue because they areusually insignificant. The payment involved the total repayment of aloan advanced to CPC by the Treasury in 1979.

2/ This could take the form of denying future access to budgetary funds.However, in the case of loss-making public corporations, a remedy wouldnecessitate more direct reform of the enterprises themselves.

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of additional projects related to transport, highways, health andtelecommunications. Much of the latter type of expenditure involved financ-ing the local costs of foreign-aided projects or important rehabilitationwork due to the flood damage in early 1984. While such expenditures may havebeen necessary, the magnitude of the overexpenditure, especially with regardto Mahaweli, indicates continued weakness in budget planning. The WorldBank's 1984 Country Economic Memorandum suggested that certain projectsappeared to be underfunded and that a 15% underexpenditure provision on topof a 10% across-the-board cut looked unrealistic and would in many casesproduce undesirable results.1/ The 1984 outcome bears out this argument andillustrates the difficulties of attaining expenditure reductions by relyingon across-the-board measures rather than cuts in specific projects.

33. Although expenditures did exceed revenue gains, the increased inflowof concessionary aid and grants enabled the Government to finance the 1984budget deficit without recourse to foreign commercial borrowing. Inaddition, the domestic borrowing from non-bank sources exceeded financingrequirements thus allowing the Government, for the first time since 1977,to make a net repayment to the domestic banking system of Rs 2.6 billion.Overall, the 1984 budgetary policies were commendably prudent.

(c) The 1985 Budget

34. The 1985 budget introduced a number of new policy measures repre-senting important steps in moving towards an incentive framework which willallocate and utilize resources more efficiently. There were three majorpolicy initiatives related to trade taxes, namely import tariff reform, thechange in export taxes on tree crops, and the proposal to establish stabi-lization funds for tea and rubber. As these steps have implications extend-ing beyond strictly budgetary concerns, they are discussed in detail inChapter II dealing with agricultural and industrial policy. The followingparagraphs are confined to issues of revenue mobilization and expenditurepolicy.

35. On the revenue side, the 1985 budget is a mixture of revenue raisingand reducing measures which, on the bottom line, results in revenues declin-ing by a forecast 1.3% of CDP. The major revenue reductions result from therevised export taxes on tree crops,2/ reduced import duties due to theimplementation of the Presidential Tariff Commission's (PTC) recommendations,selective reductions in the Business Turnover Tax (BTT) for domesticindustries, and higher exemption limits plus wider tax bands for income,

1/ That is, a slowdown in the implementation of aided projects with theassociated loss in benefits.

2/ Expected revenue loss due to taxation reform is Rs 390 million for tea,Rs 270 million for rubber and Rs 80 million for coconut.

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wealth, and dividend tax. In addition, if the Government implements the Rs 3per kg payment into the stabilization fund for tea, as announced in thebudget, this would entail an approximately Rs 600 million loss in revenuewhich is presently not accounted for in the budget estimate. Payments intothe stabilization fund represent a revenue loss for the budget because suchfunds are to be "sterilized" to prevent a corresponding increase in thedomestic money supply. The revenue losses which follow from the change inthe taxation structure for tree crops, the creation of a stabilization fund,and the reform of the tariff schedule are an unavoidable short-term outcomeof improving the incentive framework. However, the Government doesanticipate that the loss from the income tax change will be more than offsetby better enforcement of the existing tax law. It is expected that theGovernment will provide the necessary staff and incentives to the tax collec-tion agency to achieve this target. It must be added that the decline in teaprices in early 1985 was not anticipated in estimating the 1985 budgetrevenues. This implies that the Government will have to either raiserevenues from alternative sources or cut expenditures if increased borrowingis to be avoided.

36. Current expenditure is budgeted to increase marginally from 16.6% ofGDP in 1984 to 16.8% in 1985. However, total expenditure is forecast todecline from 32.0% of GDP in 1984 to 29.2% in 1985, due to tighter control ofadvance accounts and a further reduction in capital expenditure. Although areduction in current expenditures could be achieved by adjustments in thesubsidies and transfers paid to households and public. corporations, othercomponents such as interest payments, pensions and to some extent wages arefairly fixed. In addition, any further reduction in total transfers andsubsidies (they have fallen from 11.0% of GDP in 1978 to 4.6% in 1984) needsto be selective if the poor are not to suffer unduly. Although theGovernment should be encouraged to further reduce the subsidization of bothproducer inputs and inefficient public corporations, which amount to 5.4% ofbudgeted current expenditures or almost 1.0% of GDP, the simultaneous reduc-tion in direct income transfers to the lowest income group could have severerepercussions on l;-;ng standards.

37. In an effort to redress the past neglect of O&M expenditure on exist-ing public capital assets, the 1985 budget introduced Project 101, which hasbeen allocated the equivalent of 10% of planned capital expenditures in 1985specifically to address this type of essential work. The largest allocationswithin Project 101 are Highways (26%), Railways (22%), Mahaveli (9.6%), LocalGovernment, Housing and Construction (9.2%), and Lands and Land Development(6.1%). During this first year of operation the Government will have tocarefully assess whether Project 101 has been allocated sufficient resources,whether priorities have been correctly established and whether the financialprovision in the budget does actually result in the physical implementationof the needed maintenance and rehabilitation work.

38. A greater degree of uncertainty surrounds the advance accounts andcapital expenditure forecasts. The 0.1% of GDP budgeted for advance accountsin 1985 appears to be overly optimistic; 0.2% of GDP was budgeted for advanceaccounts in 1984 whereas actual expenditure is estimated at 1.6% of GDP. The

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pressure for increased advance account expenditure can be expected to comefrom certain public enterprises that consistently make unplanned claims onbudgetary resources, and possibly from defense-related programs. Neitherstraightforward efficiency nor income distribution arguments support thecontinued financing of publicly owned manufacturing enterprises.l/ TheGovernment has, however, expressed a commitment to avoid a repetition of lastyear's outcome where a number of claims for advance account financing wereallowed late in the year.

39. The level of capital expenditure budgeted for 1985 also appears torepresent an underestimation. First, the original 1985 budget estimatedcapital expenditures at Rs 1 billion below the Government's five-year publicinvestment program (PIP). Indeed, the PIP (1985-89) indicates that the levelof capital expenditures will continue to exceed the total non-expansionaryfinance available to the Government for 1986 and 1987. Second, the relianceon a 15% across-the-board cut in planned expenditures, rather than therephasing of specific projects, continues to represent a weakness in capitalbudgeting which may result in overexpenditure. Although the argument hasbeen made that line ministries will meet the expenditure targets by makingselective cuts within their own ministries, this is unsatisfactory because:it leaves open the question of whether the allocation among ministries isappropriate; and some line ministries do not have the manpower capacity toundertake prioritized reductions in expenditure. The end result may beeither a slower implementaticn of a number of projects which delays thebenefit stream, or higher capital expenditures. In addition, the one iden-tified cut relates to Mahaweli which, based on past performance, is one ofthe line ministries most capable of implementing planned expenditures.

40. In sum, the 1985 budget introduced several important policy initia-tives designed to improve efficiency and economic growth over the mediumterm. This reaffirms the Government's commitment and ability to undertakeneeded economic reforms along with their attendant short-run costs even whenconfronted with a tense domestic situation. The Government deserves fullcredit for these actions. However, the budget is likely to come under severepressure during the coming months. The sudden decline in tea prices duringearly 1985 may make it especially difficult to reach the revenue targets. Atthe same time, the Government will be under a great deal of pressure to admitnew expenditures partly due to the "windfall" accumulation of reserves in1984. Likely candidates are energy or defense-related projects. As ourprojections below indicate, it is crucial for favorable medium-term prospectsthat the foreign exchange reserves not be rapidly depleted due to additionalpublic sector expenditures. Such an outcome would deprive the economy of thesavings needed to finance expenditures throughout the rest of the decade soas to minimize subsequent dependence on foreign commercial borrowing.

1/ See paragraphs on public enterprises in Chapter II for a discussion ofthe issues involved.

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Chapter II: MEDIUM-TERM CROWTH PROSPECTS AND POLICIES

A. Introduction - Prospects and Policy Issues

41. It must be recognized from the outset that the social and politicaltensions in Sri Lanka could become the determining factor in the country'smedium-term economic prospects and thus render any projections more thannormally uncertain. It has been assumed, necessarily, that sufficientprogress will be made toward resolving the communal conflict so that it willnot become the dominating influence in future economic developments. Thefollowing discussion covers the primary economic development policy issuesconfronting Sri Lanka; presents a "base scenario" for sustained growth inconditions of external and internal financial stability during the nextdecade; reviews in some detail the type of policy reforms required to generatethat growth; and provides some comments on the downside risks. It should bestressed that the Government is already well aware of the importance of thepolicy shifts needed and, as discussed in Chapter I, has been adjusting itspolicies accordingly. The purpose of the analysis in this chapter is tosketch some of the key elements of a future policy program. It is recognizedthat the volatile domestic situation may make the type of policy shifts advo-cated difficult to implement. While this argues for patience, it does notnegate the importance of continuing to follow appropriate economic policies.A healthy economy in which output, employment and incomes are growing satis-factorily offers the best kind of environment for tackling the country'ssocial and political problems.

42. As discussed in the preceding chapter, there were major improvementsin a number of macro-economic indicators in Sri Lanka during 1984, partly as aresult of the rise in tea prices and partly because of government policies.The current economic outlook for 1985 suggests continued growth and a furtheraccumulation in international reserves. However, an examination of sectoralgrowth rates over the past few years and of the performance of export volumesreveals that a number of structural issues remain to be resolved if economicgrowth is to be sustained over the rest of this decade and into the 1990s.Past economic growth has been based primarily on paddy output growth and asizeable public investment program supported by large concessionary foreigncapital inflows. As rice self-sufficiency is now being reached, this sectoris likely to be a less important source of economic growth in the future,unless the Government vigorously pursues a policy of substituting rice forimported wheat. Moreover, public investment is unlikely to - and indeedshould not -- expand very rapidly, in part because concessionary aid inflowsare expected to level off. Yet, if Sri Lanka is to absorb the yearly additionto the active labor force and raise welfare levels, it is vital to maintaingrowth rates of the order of 5% per annum. Our analysis suggests that 5%output growth along with internal and external financial stabiLity isfeasible, provided that a number of major policy issues are addressed. Theprimary requisite is to design and implement policies which will generate newsources of growth, especially export growth. In support of the growth

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objective, issues of investment strategy and domestic resource mobilizationwill also need to be tackled.

43. Attaining an acceptable rate of economic growth in Sri Lanka involvesdeveloping new areas of growth in agriculture, to offset the anticipatedslowdown in paddy growth, and in manufacturing, so as to lead to a gradualacceleration in industrial output. The diversification in both sectors willneed to focus on export markets. This means, in turn, providing appropriateincentives -- the exchange rate and trade taxes cum subsidy policy; providingsupport services including research and extension; developing infrastructure,especially roads and rehabilitating existing assets; and, pursuing institu-tional changes, especially in respect of public enterprise reform. It must beadded that the degree to which this strategy will be successful depends uponcontinued growth in, and unrestricted access to, world export markets.

44. To maintain financial stability, the Government will have to continueits recent efforts to reduce the level of public investment from the unsus-tainable levels attained in the past. This report considers that an invest-ment ratio of about 26% of GDP (Table 5) would be consistent with other macro-economic objectives. This is to be achieved by a reduction in public sectorcapital spending with an increased focus on the highest priority activities,combined with a gradual increase in the relative role of private investment,especially in export production. The reduced level of total investment willhave to be complemented by an increase in the national savings rate ofapproximately 4 percentage points of GDP, an increase which should be obtainedprimarily through higher public sector savings.

45. This brief report focusses on the first set of issues, viz., thosedealing with policies designed to sustain a high overall rate of economicgrowth (Section C below). The issues of investment strategy and domesticresource mobilization are not dealt with in much detail; instead, some keyparameters of these two subjects are presented within the framework of thebase scenario (Section B).l/ We now turn to this scenario, which outlines themajor macro-economic developments foreseen over the coming decade.

B. The Base Scenario

46. The objective of the development scenario outlined below is toillustrate the conditions under which a rate of economic growth of about 5%per year can be sustained in Sri Lanka in the coming years, maintaining, atthe same time, internal and external financial stability and an acceptabledebt service ratio. The realization of the scenario described in Table 5below rests on several important conditions. First, it is assumed that theGovernment continues to accumulate foreign exchange reserves, sterilizing some

1/ A separate report on Sri Lanka's public investment program and itsfinancing is being planned.

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proportion of these savings to reduce domestic inflationary pressure, andmaintaining the imports coverage of gross official reserves at 3 months.Second, these short-term stabilization measures must be supported by thepolicy reforms discussed in Section C below, designed to stimulate productionin areas where Sri Lanka can compete on world markets. Unless this secondstep is taken, the Government runs the risk of stabilizing the economy at alow rate of growth which would have serious consequences in terms of employ-ment and income earning opportunities. Third, to maintain financial stabilitythe overall investment coefficient will have to be reduced from an average of29.4% of GDP during 1980-84 to around 26.0% and the national savings rate willhave to increase from 16.4% of GDP during 1980-84 to approximately 20.0%.

47. The reduction in the investment coefficient and the increase in thenational savings rate will depend to a large extent on budgetary policies.Private investment is projected to increase as a share of GDP from 12.0% in1980-84 to close to 14.0% during 1985-89 in response to the growth policiesdiscussed below. Public investment will therefore have to be reduced frommore than 17.0% during 1980-84 to about 12.0% during 1985-89, a target whichthe Governmer- ttself has accepted. On the savings side, it is important tomaintain private savings at the level achieved in recent years; this meansfollowing a more flexible interest rate policy which offers a positive realrate of interest so as to attract private saving. Public savings, having beenmostly negative in the past, are expected to reverse this trend and averageabout 3% of GDP in the coming years through a combination of expenditure cutsand revenue raising measures.

48. The budgetary analysis in Chapter I reviewed the Government's progressthus far in achieving sustainable public investment and savings levels andsuggested further steps which need to be taken. One of the Government'sobjectives is to reduce the size and role of the public sector in the economy;its achievement depends on several factors. The Government's proposed reduc-tion in public sector capital spending to approximately 12% of GDP during1985-89 and measures designed to ensure greater budgetary discipline, such asthe removal of underexpenditure provisions in the capital budget, representsignificant steps in the right direction. On the other hand, reducing currentspending may be more difficult to achieve. There is a clear need to raisepublic sector salaries and the Government has begun to provide increasedallocations for much needed spending on O&M. In order to generate therequired level of savings on current account, revenues within the recurrentbudget will have to be reallocated away from low return uses. While severalcategories of current spending are fixed obligations and cannot be cut, thereremain within the Sri Lankan budget several items of expenditure in the areasof subsidies, transfers and advance account payments which can be cut withoutefficiency loss. There is a clear need to review the desirability of continu-ing to subsidize producer inputs, of providing transfers and advance accountpayments to inefficient public corporations which cannot be expected to payback, and there are many instances where increased reliance on user charges

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must be pursued. Nevertheless, even if the Government is successful in con-trolling current spending, there will continue to be a need to raise morerevenues in order to reach the savings target.

49. For the medium term, a conservative estimate of total Governmentexpenditure over the period 1985-88 indicates a level of between 29% and 27%of GDP; this compares with 34.7% of GDP during 1980-84. Given the projectedinflow of concessionary foreign capital channeled through the budget of 5% ofGDP and domestic non-bank borrowing of about 3% of GDP in 1985-88, theGovernment's implicit revenue target is between 19% and 21% of GDP, as com-pared with 18.8% during 1980-84. If revenues are to be maintained at thislevel, the elasticity of the present taxation system needs to be improved andthe tax base needs to be widened. The increased coverage of taxes is espe-cially important if the Government is to continue to make further reforms inthe overall incentive structure which will necessarily imply a reduction intaxes on those activities which currently shoulder a disproportionately highpart of the tax burden. In addition, direct cost recovery mechanisms forservices provided by public bodies, e.g., transport or irrigation, should beimproved to further stimulate resource mobilization. The Government is awareof this problem. It has implemented a cost recovery program for the irriga-tion system and has requested technical assistance from the IMF for a reviewof the tax system.

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Table 5: HISTORICAL AND PROJECTED ECONOMIC INDICATORS, 1980-94(%)

1979-84 1984-89 1989-94

Annual Real Growth RatesGDP 5.2 5.0 5.5Agriculture 4.1 3.6 3.8Industry 3.5 4.8 5.7Services 6.5 5.9 6.2Exports of G+NFS 5.1 a/ 4.9 5.9Imports of C+NFS 5.5 4.0 4.2

Avg. Avg. Avg.1980-84 1985-89 1990-94

As Z of GDPInvestment 29.4 25.8 26.0Private 12.0 13.8 15.0Public b/ 17.4 12.0 11.0

Gross National Savings 16.4 19.5 20.9Private 17.0 16.5 17.9Public c/ -0.6 3.0 3.0

Foreign Savings 13.0 6.3 5.1

a/ Excluding exports of non-factor services (tourism) andgarments, the real growth rate of exports for 1979-84amounts to 2.1% per year.

b/ Central Government capital expenditure.c/ Central Government current savings.


50. The attainment of the base scenario also rests on some importantassumptions regarding external factors. The accumulation of reserves in 1984has established a base from which the immediate balance of payments outlook ishealthy under most scenarios. Even with the high export growth in the basescenario, however, Sri Lanka will continue to require substantial amounts offoreign assistance over the medium term. In the past the large resource gapsarising from successive budget deficits and slow export growth were financedby rapidly growing remittances and especially by the increased use of foreignconcessionary capital made available by donors. Remittances are unlikely tocontinue their past growth and concessionary capital has become much scarcer.In this base scenario, remittances are assumed to remain constant in realterms. Official grants are projected to decline even in current prices, whilecommitments of new concessionary loans remain constant in real terms at thecurrent level of about $300 million. There is, however, projected to be some

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real increase in non-concessionary financing from official sources. Thus, onbalance, commitments from official sources, loans and grants, are projected toremain constant in real terms. In the coming years the Sri Lankan economywill be forced to adjust to much smaller resource gaps than in the past and torely partly on commercial borrowing to fill those gaps. Thus, the Governmentneeds not only to introduce policies designed to stimulate export growth andefficient import substitution but also to define and implement a borrowingstrategy which is consistent with resource requirements and sustainable interms of its debt servicing implications.

51. The most important features of the base scenario are summarized inTable 5. GDP can be expected to grow initially at about 5% per annum andaccelera-e to a more rapid rate during the 1990s. Real export growth wouldexceed import growth through both projection periods. However, in terms ofcurrent prices import growth will exceed export growth for the remainder ofthe 1980s because of the expected deteriorating terms of trade.

52. In terms of major sectoral growth rates, the agricultural sectorcannot be expected to continue to grow at the rate of the recent past.Nevertheless, the gradual rehabilitation of the tree crop sector together witha determined effort at agricultural diversification should lead to a fairlyhigh rate of expansion of 3.6% per year during 1984-89. The growth rate ofindustry, on the other hand, should accelerate to 4.8% per year during thenext five years based on several developments, including an increase inprocessing of traditional exports as opposed to stagnation in the past, con-tinued growth in garments exports, and a substantial acceleration in exportsof new manufactures. As discussed in detail in Chapter III, the outlook isfor a stable balance of payments situation with the debt service ratio risingfrom 14.2% in 1984 to 18.8% in 1987 but then gradually declining to 18.0% in1988 and 15.1% in 1994. The growth policies in the agricultural andindustrial sectors required to realize this development path are discussednext.

C. Policies for Growth

(1) Agricultural Policies

Introduction

53. About 75% of Sri Lazka's population resides in rural areas, with some45% of the total active labor force directly employed in agriculture. AsTable 7 shows, agriculture has declined as a percent of GDP in constant factorprices from 24.7% in 1977 to 21.3% in 1984. Agriculture continues, however,to make a significant contribution to both export earnings and Governmentrevenue. Exports of agricultural goods accounted for approximately 64% oftotal merchandise exports in 1984 with the three traditional exports - tea,rubber and coconut - accounting for 43%, 9% and 4% of exports respectively.This represents a decline from the early and mid-1970s when agriculturalexports accounted for over 90% of all merchandise export earnings. In

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addition, direct export taxes on the same three traditional exports accountedfor 22% of total Government tax revenue in 1984. Nevertheless, the sector'scontribution to the economy could be raised. The country's natural resourcebase, climate and relatively low-wage and literate work force provide it withthe potential to be an efficient producer of a wide variety of agriculturalproduce.

54. This section analyzes the issues and prospects in the agriculturalsector. Initially a brief outline is provided of the performance of agricul-ture in aggregate and by major crops since 1977, followed by a discussion ofthe major internal policies which appear to have shaped past growth patterns.This is important because the link between Government policy and past perfor-mance provides invaluable lessons for the formulation of future policy.Subsequently recent Government initiatives are reviewed, and an assessment ismade of how far these measures go in creating the type of policy frameworkneeded to generate the rate of growth depicted in the base case scenario.

Recent Production Trends

55. Given the importance of agriculture, the marked improvement in growthperformance since the policy shift of 1977 is encouraging. Agriculture(excluding forestry and fishing) has grown at a real annual rate of close to4.0% during the period 1978-84, as compared with 1.8% per year between1970-77, largely because of a sustained increase in the production of paddy.The level of paddy production climbed to new highs in the early 1980s withsetbacks in 1982 and 1984 due to unfavorable weather. The reasons for thisimproved performance relate to the well documented producer response to theremoval of the myriad of Government controls on prices, distribution andmarketing that existed prior to 1977. This was supported by a research andextension system which concentrated its resources on the development anddissemination of modern rice technology. The result has been that Sri Lankais almost at the point of self-sufficiency in rice production, with _"aportsplaying the important role of providing competition to domestic producers andan alternative source of supply.

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Table 6: VALUE ADDED IN AGRICULTURE AND ITS MAJOR SUBSECTORS - AVERAGEANNUAL GROWTH RATES AND SHARES OF GDP

Average AnnualGrowth Rate (%) Share of GDP (Z)1970-77 1978-84 1970 1977 1984

(constant 1970 factorcost prices)

Agriculture a/ 1.8 3.7 25.7 24.7 21.3Tea -0.7 -0.6 3.2 2.6 1.7Rubber -0.2 -1.5 1.8 1.3 0.9Coconut -4.1 0.8 4.1 2.6 2.0Paddy -0.9 4.5 7.2 6.2 5.9 b/Other 6.4 5.5 c/ 9.4 12.0 10.8

a/ Excluding forestry and fishing.b/ Paddy output in 1984 was below the trend level due to flooding -

in 1983 paddy accounted for 6.4% of GDP.c/ 1978-83.


56. In contrast, the data in Table 6 show that, over time, the volume oftraditional export crops has essentially stagnated or declined. One explana-tion has been the steady worsening of international prices which, when coupledwith an appreciation of the real exchange rate, has squeezed domesticprofitability. Indeed, as Table 7 illustrates, prices in real terms havedeclined for tea, rubber, and rice with fluctuating movements in the case ofcoconuts. What is of interest, however, is that since 1970 the internationalprice of rice has declined substantially and yet this is the one crop whereproduction within Sri Lanka expanded rapidly. It is clear that domesticpolicies have played a major role in shaping the impact that movements ininternational prices have had on different crops.

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Table 7: REAL PRICE INDICES FOR MAJOR CROPS a/(1981 = 100)

Coconut DessicatedYear Tea Rubber Copra Oil Coconut Rice

1960 242 230 75 173 87 n.a.1970 153 123 69 170 94 1101972 146 77 47 110 62 741974 112 129 53 275 140 1901976 102 100 89 88 63 971978 138 96 74 130 85 931980 108 110 89 153 119 841981 100 100 100 100 100 1001982 97 77 77 85 65 811983 132 90 75 93 89 74

a/ Index of f.o.b. export prices, except rice which is world price,in real 1981 US$.

Sources: Central Bank Bulletin and World Bank CEM, May 1984.

57. As production data other than those on the four major crops discussedabove are not as comprehensive, it is difficult to interpret trends. However,available volume data on minor export crops indicate a slow rate of growthfrom a small base. Other domestic food crops, however, appear to have main-tained reasonable growth rates although marginally below the rate of growthachieved prior to 1977.

Major Policy Developments in Agriculture Since 1977

58. It has already been noted that the policy measures adopted by theGovernment since 1977 stimulated sustained growth in paddy production. Thereasons for the relatively poor performance of other agricultural subsectorsare several. First, the 1977 reforms significantly shifted relative incen-tives and institutional structures in favor of some agricultural activitiesand against others. The beneficial incentive effects that the unification anddevaluation of the exchange rate had on agriculture in 1977 were largelyoffset for traditional exports (tea, rubber and coconut) by the imposition ofhigh export taxes.1/ Thus, the producers of traditional export crops did notgain from the overall increase in the price of tradeables which followed the

1/ The share of tree crops taxation in total Government revenue jumpedfrom 12% in 1976 and 1BZ in 1977 to 42% in 1978 following anincrease in international prices in addition to the devaluation.

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devaluation. In addition, the tree crop sector had been through a protractedprocess of nationalization in the early 1970s which placed approximately 60%of tea, 30% of rubber and 10% of coconut land under the control of two largestate corporations.l/ The uncertainty created during the nationalizationprocess coupled witE the following period of disorganization and mismanagementwithin the newly created public estates resulted in a slowdown in those cul-tivation activities that are essential in maintaining yields.

59. Second, since 1978-79 there has been a shift in relative incentivesaway from traded goods in general and in particular against agriculture. Thelarge capital inflows associated with the jump in public investment, espe-cially Mahaweli, increased the demand for non-traded goods causing domesticinflation to rise above international inflation, resulting in an appreciationof the real exchange rate.2/ In addition, continued budget deficits added tothe inflationary pressure causing the effective exchange rate to appreciatefurther. As an appreciation of the exchange rate moves incentives in favor ofnon-traded activities, agriculture along with other traded goods became rela-tively less profitable. At the same time, the import tariffs that were usedto partially offset the appreciation of the exchange rate generally offeredhigher protection to domestic manufactured goods.3/ Covernment policy tomaintain low prices for essential foods other than rice translated into lowtariff protection on agricultural products which, coupled with the exchangerate policy, disadvantaged domestic farmers.

60. Third, while traditional export crops were a major source of taxrevenue, public expenditures were largely directed towards assisting othercrops, especially paddy. As Mahaweli became dominant in the public investmentprogram, an unusually large share of public resources was devoted to paddy andto raising hydroelectric capacity.4/ This investment pattern not onlyincreased the resources which were directly employed in paddy production butit also resulted in other important investments, which would have supportedmore diversified growth, being starved of resources. In the attempt to con-trol budget deficits, other public expenditures such as the rehabilitation andmaintenance of existing smaller-scale irrigation networks, rural roads and theoperational expenses of research and extension departments were reduced. As

1/ Janatha Estates Development Board (JEDB) and State PlantationsCorporation (SPC).

2/ See paragraphs 108 and 109 for a discussion of exchange rate movements.

3/ See Cuthbertson and Khan "Effective Protection to Manufacturing Industryin Sri Lanka," September 1981.

4/ Mahaweli-related capital expenditures accounted for 29%, 37%, 45%,57%, and 52% of total capital expenditures for the years 1979 to 1983,respectively.

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one example, the effectiveness of extension workers has been constrainedconsiderably because of insufficient funds for fuel and travel allowances.The paddy bias of capital expenditures was further reinforced by subsidypolicies. The most significant current expenditure earmarked directly foragriculture has been the fertilizer subsidy, with over 60% of the fertilizerissues used by paddy producers.1/

61. These tax, subsidy and expenditure interventions in favor of paddywere reinforced by the focus of the research and extension service. R and Einstitutions and associated manpower skills developed within Sri Lanka havebeen traditionally centered on the four major crops. In the context of afavorable shift in incentives in favor of paddy, research support was avail-able to assist paddy farmers; as no such incentive shift occurred for thethree traditional export crops, there was little demand for research andextension services. Other crops, on the other hand, continued to face thedual obstacles of lower incentives relative to paddy production and negligibleresearch/extension support. Thus even if diversification away from paddywould have been profitable there was little development of necessary supportservices.

62. In addition to the above, there are wide variations in theadministrative/institutional structures surrounding each crop. Last year'sCEM 2/ and the recent World Bank Tree Crop Sector Report provide illustrationsof complex administrative structures constraining performance. Due to thedistribution of responsibilities for one crop or subsector across a number ofdifferent ministries, consistent policy formulation, coordinated planning andimplementation are rendered more difficult than necessary. Once again paddyis to some extent an exception in that the direct intervention via publicbodies has been significantly reduced since 1977. Other crops, however, andin particular tree crops, have had to operate in an environment where a numberof the major input decisions are shaped by several public institutions. Evenso, there are areas where the absence of a consistent set of policies and anadequate capacity for planning and implementation have hindered the perfor-mance of all crops, including paddy, e.g., water management and research.

Future Prospects and Recent Government Initiatives

(a) Prospects and Issues

63. In the base scenario discussed previously the agricultural sector isexpected to grow at a slightly lower level than in the recent past, whenimport substitution in rice was the major driving force. Nevertheless, the

- 1/ This ratio dropped in late 1983 and 1984 following the tea price rise.

2/ See pages 47-49 of "Sri Lanka: Recent Economic Developments, Prospectsand Policies", World Bank, May 4, 1984.

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projected growth rate of 3.6% during 1985-89 rising to 3.8% in the 1990s ishigh when compared to other countries and would represent a significantachievement in terms of raising rural income levels and increasing employmentopportunities. Aside from the continued, but slower expansion of paddy,future agricultural growth is dependent on the rehabilitation of Sri Lanka'straditional tree crops and a much higher rate of growth in "other" domesticfood and minor export crops. The development of an incentive framework whichencourages farmers to make the most efficient use of land resources would leadto greater diversification and is vital for future growth. Tree crops can beexpected to gradually attain a growth rate of 3% per annum given the invest-ment programs now being implemented and the associated policy/managementreforms. The remainder of agriculture should grow at around 3.8%, with non-traditional agricultural exports accelerating to a 7% per annum growth rate,in response to completed and planned investments and the policy reforms dis-cussed below.

64. The policy agenda needed to attain this growth can be divided intotwo parts. First, for those assets directly owned by the Government,primarily the tree crop plantations, a direct program of action is requiredto rehabilitate the productive stock and institute worker/managerial incen-tives in an environment of financial discipline and accountability. Asdescribed in the following section, the Government has made a significantstart in addressing this set of issues. Second, since by far the largest partof agricultural production is in the private sector a much broader program ofpolicy reform is required to tackle the constraints to growth outlined above.The major policy issues to be addressed in such a program are: the reductionof policy-induced distortions in the inter and intra-sectoral incentiveframework (exchange rate policy, tariff reform, tax/subsidy policies); theredirection of public capital expenditure towards supporting more diversifiedgrowth (public investment in infrastructure, rehabilitation of existing capi-tal assets); a more effective research and extension service covering a widervariety of crops; the rationalization and improved coordination of publicinstitutions/ministries (e.g., water management agencies), and a thoroughoverhaul of the rural credit system.l/ Some progress has been made inaddressing these broad, but nonetheless crucial, policy issues. We now turnto consider recent Government initiatives and areas where policy change shouldbe pursued further.

1/ Rural credit is not discussed in this report because the Government isin the midst of introducing a number of reforms, the details of which werenot available when this report was being prepared.

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(b) Recent Government Initiatives

The National Agriculture, Food and Nutrition Strategy

65. In response to the obstacles facing diversified agriculture as high-lighted above, the Government initiated a thorough sector-wide review of theconstraints to agricultural development and suggested remedial policies. Theresulting "National Agriculture, Food and Nutrition Strategy - A Change inPerspective" (NAFNS),l is a major breakthrough. The analysis highlights theproblems touched on before as well as many others, and outlines theGovernment's first attempt to spell out an overall corrective strategy. TheNAFNS document is the collaborative effort between the National PlanningDivision of the Ministry of Finance and Planning and several Governmentinstitutions responsible for agriculture. It has been an important learningexperience for those involved and clearly illustrates the need for coordinatedplanning in those sectors where a number of government departments operate,often independently of one another.

66. Many of the recommendations put forward in the NAFNS report are soundand should be implemented. The report is particularly strong in identifyingthe type of reforms needed in the research, extension and water managementservice systems to support more diversified agricultural growth. For example,with respect to field crops other than paddy, the report notes that Governmentservices have been centered around supporting rice production and recommendsthat "a multifaceted program consisting of technological development, betterextension outreach and marketing facilities" be developed. These generalideas are backed up with specific reforms for particular support services.Thus, to address the lack of coordination and communication within the variousresearch institutions the report recommends that a Council for AgriculturalResearch Policy be established "to advise Government on research prioritiesand the promotion of inter-institutional research projects". However,research is of most value when it is applied and at the moment, as the reportnotes, "the extension services are over-burdened in distributing andadministering development subsidies at the expense of extension outreach." Itis recommended that the administration of subsidies be separated from exten-sion services. This would not only free extension officers' time but wouldalso sever the link between technical advice on good farming practices and theinspection of property by officials to determine access to Governmentsubsidies. Indeed, as the report notes the whole rationale for subsidiesshould be reviewed if output price incentives are raised.

67. The report also clearly identifies the issues involved in irrigationinvestment and water management. It is argued that the fut- re strategy forirrigation investment should center on a shift in priorities away from the

1/ Published by the National Planning Division, Ministry of Finance andPlanning, June 1984.

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construction of new irrigation schemes towards the rehabilitation of existingschemes. This should be coupled with a greater emphasis on water managementand recovery of operation/maintenance costs through fees. As the reportstates, "...Presently, there is minimal planning on watershed management,although large investments have been devoted to major watersheds to protectthese investments and ensure rational utilization of land and water resources,there has to be coordinated watershed management."

68. The report is less clear, however, when discussing reforms relatedto the incentive structure. The policy advice given in different parts ofthe r!port is often conflicting probably to some extent because this is afirsc attempt at working towards a consensus on what the overall policyframework for agriculture should be. For example, while the report makes ageneral argument in favor of allowing international prices to determineresource allocation, there are also a large number of proposals for selectiveassistance to particular crops in particular regions, via special lines ofcredit, price supports, subsidies, etc. This approach suggests the adoptionof selective promotion policies similar to those used in the past with mixedresults. While targeted assistance to particular activities may be warrantedin the short run, it is important to avoid levels of support which will leadto the misallocation of resources over the medium term, lowering productivityand growth.

69. An alternative approach would be to step back from measures designedto promote specific crops and focus policy change on correcting the moreimportant inter and intra-sectoral distortions identified in the previousdiscussion. Given the limited capacity of Government to make such complexdecisions as which crops to grow, when, where and how much, it would seem moreappropriate to concentrate public resources on such areas as establishing awidely based and responsive research, extension and support framework.Broader policy reform should be designed to reduce both the economy-widepolicy-induced distortions which disadvantage the production of traded goods,in particular agriculture, and the relative distortions between crops withinagriculture. The sustained success in paddy (as well as the 16% increase intea output in 1984) demonstrates that farmers do react quickly to marketincentives if the necessary support framework is in place.

70. Aside from the NAFNS document, which remains a statement ofobjectives, the Government has already implemented a number of desirablepolicy reforms. It is worthwhile analyzing these initiatives in detailbecause they provide both a concrete example of what the Government has doneas well as a general illustration of the outstanding issues which remain to beaddressed to stimulate more rapid growth throughout the agricultural sector.

Tree Crop Subsector

71. There have been three major reforms designed to revitalize the treecrops - the Medium-Term Investment Program (MTIP), Tax/Subsidy reform, andthe proposed Stabilization Funds. The MTIP represents the culmination of the

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first attempt by the two state-owned tree crops corporations (JEDB and SPC)to identify a coordinated investment strategy beyond their annual budgets.At the instigation of the Government and IDA, the MTIP was formulated bygrouping the five-year investment proposals of the 530 estates into regionalplans, amalgamating them into .corporate plans, and combining them further asa single investment program for the plantation segment of the tree cropssubsector. The objective is to increase the production of tea, rubber andcoconuts by improving the productivity of all publicly held estates,rehabilitating factories, providing field and nursery equipment, improvingtransportation and strengthening the management and financial control of thecorporations. The MTIP represents a significant step by Government to redresspast policies which basically extracted profits from tree crops withoutproviding the resources/incentives for operators to maintain output or produc-tivity in the medium term.

72. As the MTIP is restricted to the two public corporations, theGovernment also implemented changes in the tree crop taxation and subsidyrates designed to improve producer incentives to all producers, includingprivate estates and smallholders. With regard to tea, the fixed export taxwas reduced by Rs 2 to Rs 7 per kg. The threshold net auction price for thead valorem tax was raised from Rs 28 to Rs 32 per kg with the new tax rate setat a uniform rate of 50%, subject to the provision that the net auction price(after tax) is not reduced below Rs 38 per kg.1/ While the increase in thethreshold price at which tax becomes payable partly reflects an appropriateadjustment for inflation, the reduced fixed tax and the exemption from advalorem tax up to Rs 38 per kg should result in a real increase in producermargins. The existing export duty on rubber was reduced by about Rs 2.25 perkg with the introduction of a new sliding scale of duty. And for coconuts thetax threshold increased from Rs 13,100 to Rs 20,000 per metric ton of coconutoil with a 50% tax on the excess. In addition, no more permits will be issuedas of January 1, 1985, for subsidies to the two state corporations (JEDB andSPC), to encourage them to replant, infill and upgrade processing machinery.These type of subsidies represented a second-best method for offsetting thehigh incidence of taxation and an overvalued exchange rate which reducedmargins making output or quality improving investments unprofitable. As aresult of the marked increase in the tea price during 1983/84 plus the finan-cial resources that will be provided via the MTIP, the Government no longerconsidered it necessary to subsidize inputs. The private sector, however,will continue to receive these subsidies partly because the MTIP is restrictedto public corporations, and partly because it is still considered necessary,

1/ This replaced the previous tax rate of 50% between Rs 28 and Rs 55 perkg and 40% thereafter.

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despite higher tea prices, to offset the negative effects of imperfect creditmarkets and the high incidence of taxation.1/

73. While the overall reduction in the tax burden plus the removal ofsubsidies for state corporations are welcome initiatives which bring bothinput and output prices more into line with international prices, a furtherrationalization of the tax structure may be appropriate. There has in thepast been a tendency to view the tax on tree crops as a steady and reliablesource of Government revenue, at least in the sh3rt run, without due regard toproducer incentives and the longer-run impact on the sector and the economy,including Government revenues. While the following paragraphs are confined toa discussion of explicit taxes, exchange rate policy clearly has equallyimportant implications for producer incentives and Government revenues.

74. It is useful to distinguish two dimensions to producer decision-making.2/ First, there are activities that, by improving the quali'y ofproduct, increase the price received. In the case of tea, there are manyactivities in tea processing aimed at improving the sale price at the auction.Since the ad valorem tax is geared to this auction price, the marginal taxrate on price is relevant. If the quality of a kilo of tea could be improvedat a cost of one rupee to get an improvement in the producer price by tworupees (before tax), it would obviously be profitable to do so. Yet, if themarginal tax is equal to or about 50%, as is the case in Sri Lanka, theactivity will not be profitable, regardless of the relationship between thecost of the production and the initial price. Second, there are a range ofactivities which increase output. At a given price, the tax rate is fixed andthe marginal tax on incremental output equals the average tax rate. Forexample, at an f.o.b. price of around Rs 65 per kg the average tax incidencecreated by the current system in Sri Lanka is approximately 29%. Any outputincreasing investment with a benefit to cost ratio of 1.3 in a zero tax situa-tion would have a 0.92 benefit to cost ratio under the present system. Aprofitable activity becomes unprofitable.

75. The issue which remains to be reviewed is the balance between treecrop taxes as a primary source of revenues and the incentives provided toproducers of crops in which Sri Lanka has a comparative advantage. Quiteclearly, this must be decided upon as part of an overall review and revisionof the taxation system and its adequacy to generate sufficient revenues. Withregard to tea in particular, however, Sri Lanka's tax structure does appear tohave a continued bias against producers. The 50% marginal tax rate in the Sri

1/ Both the explicit taxes plus the implicit tax of an overvalued exchangerate.

2/ In order to clearly illustrate the economic repercussions of the taxsystem, the examples here assume that other factors remain constant, suchas the possibility of an impact on world prices.

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Lankan case applies at any net auction price over $1.23 per kg.1/ Currentprice projections indicate that this price is below any average "normal trend"price.

76. An alternative tax system could be based around a progressive struc-ture of tax rates with lower levels of taxation when prices are at "normal"levels. This has the advantage of moderating price effects during periods ofabnormally high prices without imposing a tax burden which severely erodesincentives. This type of tax system is illustrated in Table 8 which comparesboth the marginal and average tax rates in Sri Lanka with that of Kenya, oneof Sri Lanka's main competitors. It is interesting to note that over theperiod 1970-79 Kenyan exports grew at an annual rate of 11.9%, in contrast tostagnation in Sri Lanka. Although other factors are probably of more impor-tance in explaining the performance difference, the tax structure in the Kenyacase did allow price incentives to operate more freely than is the case forSri Lanka.2/

Table 8: A COMPARISON OF TAX INCIDENCE ON TEA EXPORTS IN SRI LANKAAND KENYA a/

Sri Lanka KenyaF.O.B. Price Average Marginal Average Marginal

US$/ Tax Rate b/ Tax Rate Tax Rate b/ Tax Rate

1.2 22.4 0 0 01.8 14.9 0 2.8 102.4 27.7 50 5.6 153.0 32.2 50 8.2 203.6 35.2 50 10.7 254.2 37.3 50 13.1 30

a/ Assumed end-1984 exchange rates: K Shs 15.5 = $1SL Rs 26.0 = $1.

b/ This is the total tax payment, including fixed taxes, expressedas a percent of the corresponding f.o.b. price. It should benoted that the fixed tax in Sri Lanka is approximately $0.28 perkg versus $0.01 per kg in Kenya.

1/ However, as explained earlier, the tax becomes effective only at pricesabove $1.46 per kg.

21 Sri Lanka's other major competitor, India, does not impose any sig-nificant export taxes. However, exporters are controlled to some degreeby manipulating a minimum export price to restrict export quantities.

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77. An additional major initiative in the 1985 budget was the Government'sdeclared intention to establish stabilization funds for tea and rubber. Thiswould entail syphoning off part of the tax revenue collected when prices areabove a "trend level" into a.fund which is not part of current revenue. Thefunds are thereby sterilized to reduce the itflationary impact that a rapidrise in export prices can have an the economy, and would only re-enter theeconomy when prices hit abnormally low levels via price support to producers.Thus, stabilization funds represent a countercyclical measure designed toreduce macro-economic fluctuations for an economy dependent on primary com-modities with wide price fluctuations. While the countercyclical objective isdesirable, the policy also needs to be implemented with due regard to producerincentives.

78. Although the details of how the stabilization funds will work in SriLanka have not been finalized, the intention is (a) to make payments into thefunds only in times of above normal trend prices, and (b) to establish such afund by making withdrawa-s from revenues already generated by the existing taxsystem, i.e., there will be no incremental tax effect on prices received byproducers. It should be noted, however, that whether there will be a stabi-lization effect depends upon whether the Government reduces its own expendi-ture by the amount of the revenue loss due to payments into the stabilizationfund or manages to raise revenues from alternative sources.

79. A method by which to attain both the stabilization and tax/incentiveobjectives would be to move to a progressive marginal tax structure. Lowerlevels of taxation when prices are in the normal range could be combined withprogressively higher marginal tax rates at above normal trend level priceswith a commitment to pay some proportion of the revenue collected at thehigher tax rates into a sterilized stabilization fund. Subject to the above-mentioned review of the overall tax system, this would satisfy the macromanagement objectives without sacrificing the output, employment and incomegains that derive from having resources employed in areas of comparativeadvantage. The Government has asked the IMF for some background technicalpapers and has established a special working group to investigate the issuesinvolved in operating a stabilization fund.

Livestock Industy

80. The Government has also instituted several policy measures which laythe foundation for an efficient livestock industry. With respect to dairy,the past expansion of milk production has been limited due to Governmentintervention in the marketing, distribution and in particular, the pricing ofmilk products. Past policy objectives resulted in the incentives necessary toencourage domestic production being given secondary importance to the objec-tive of providing milk to consumers at low and subsidized prices. A WorldBank dairy report indicated that, subject to the adjustment of incentives, and

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the introduction-of certain key institutional changes, domestic dairy produc-tion is an efficient import substitution activity with potentially significantemployment/income effects for the rural poor.

81. In response, the Government has allowed both the producer and consumerprices of milk to rise, thereby reducing the budgetary subsidy to both theNational Milk Board (NMB), the main processor of domestic milk, and theCooperative Wholesale Establishment, the agency responsible for most milkimports. The Government has also decided to move towards abolishing the NMBand replacing it with an institutional structure which will be privatelyowned, primarily by dairy farmers. A complete restructuring and modernizationof the dairy industry is intended which involves the construction of newprocessing plants and chilling centers and te encouragement of private sectorownership. In addition, the efficiency of domestic production and the levelof prices to consumers will be held in check by allowing the importation ofdairy products at a nominal tariff rate of 25% or less. Given the currentovervaluation of the exchange rate and the level of other import tariffs, thisis an acceptable tariff rate.

82. While these steps will greatly enhance the productivity and growthof dairy products, a similar expansion in meat production requires furtheraction. Retail price controls, the absence of suitable slaughter and marketfacilities and a ban on the slaughter of buffaloes and female cattle reducethe incentives for producers to slaughter excess stock. A removal of theserestrictions is required not only to increase the production and quality ofdomestic meat products in the short run, but also to ensure that the geneticimprovement programs are effective in raising the quality of herds over themedium term. These measures would also have to be supported by a more effec-tive disease control and veterinary services network.

Conclusion

83. In sum, the Government has initiated several significant reformsdesigned to revitalize parts of the agriculture sector. The measures under-taken with respect to tree crops will lead to a revitalization of traditionalexports, particularly from state-owned plantations. More needs to be done forprivate tree crop smallholders; some of the tax/incentive measures that shouldbe considered have been indicated. The livestock subsector will receive aconsiderable boost from dairy if the current program of reform continues to beimplemented. This should be supported by removing the constraints confrontingmeat producers. In addition, the NAFNS report lays out a framework for impor-tant reforms in the support service network which will greatly assist increating the conditions for broader based agricultural growth.

84. Looking ahead, if these initiatives are to yield maximum benefits,they need to oe set within an overall strategy designed to encourage the mostefficient use of land resources. The investment in Mahaweli is beginning toopen up new areas of irrigated land and the country is, therefore, well placedto diversify into other crops without sacrificing the Government's prime

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objective of rice self-sufficiency. The challenge will be to create a policyframework which encourages farmers to increase yields from existing crops andto move land out of paddy in some areas into alternative crops. The latterdevelopment is more likely to occur where the return to producing alternativecrops is high and the domestic policy biases in favor of paddy are reduced.This will take time because farmers often perceive paddy as an "insurance"crop, i.e., it does not have to be traded to provide nutrition, farmers arefamiliar with optimal cultivation practices, and Government policy is designedto support paddy. However, if farmers' incomes are to continue to increase,it is important that the appropriate incentives are put in place to encouragethem to diversify towards crops which yield a higher rate of return at worldprices. The alternative will be continued expansion of rice output atincreasing costs of production which, in the absence of exportcompetitiveness, can only be supported by increased resort to domestic pricesupports and public subsidies.

85. A program of reforms is required, designed to reduce the risk andraise the relative ttturn to the farmer of moving land into its mostprofitable use. Such a program will include incentive, support service andinstitutional components. The first step should be to restore producer incen-tives by allowing international prices to have a greater influence on therelative returns to different crops with due regard to stabilizationobjectives. This would entail restructuring taxation and subsidy policiesaround a more neutral framework, which includes cost recovery on publiclyprovided inputs such as irrigation water or fertilizer. This would alsonecessarily imply broadrning the tax base in agriculture in order to equalizethe tax effects on different crops. Second, there is a need to renew effortsto channel more resources into the necessary support framework. Improvedresearch and extension services for a wider variety of crops and therehabilitation and maintenance of the infrastructure in rural areas appear tobe high priorities. In addition, whenever the opportunity arises, institu-tional reform should be pressed forward, bot"h to reduce direct Governmentinvolvement in production, marketing or distribution and to consolidate andrationalize the remaining administrative structure.

(2) Industrial and Trade Policies

Introduction - The Emerging Constraints to Growth

86. When the 1977 liberalization reform package was implemented it wasenvisaged that the industrial sector, in particular manufactured exports,would provide a major source of future economic growth and employment.Initially, the various manifacturing subsectors did indeed respond positivelywith both factory industry and small industry registering particularly. highgrowth rates (7.5% and 11.5% respectively for 1977-79). CapaLity utilizationincreased due to the removal of import restrictions, the incentive to enterthe production of traded goods relative to non-traded activities strengtheneddue to the unification and devaluation of the exchange rate, and the general

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investment climate improved in response to the overall policy shift towards amore open market-oriented economy.

87. However, because of the absence of further Government measuresdesigned to build upon the 1977 reforms and negative external developments,this renewed growth was, with the exception of garments, short-lived. Aspointed out in the section dealing with agriculture, the subsequent apprecia-tion of the real exchange rate after 1978 disadvantaged the producers oftraded goods, including domestic manufactures. Although import tariffs wereused to provide higher protection for manufacturing vis-a-vis other sectors,the growth opportunities created by this inward-looking policy were Limiteddue to the small size of the domestic market. Moreover, the tariff structurew&s designed to protect those domestic industries in operation at the time ofthe major tariff reform in 1977 -- new industries which may have developedin a less distorted policy environment were, by definition, excluded. Indeed,to the extent that any new industry utilized the outputs of existing highlyprotected domestic producers the profitability of entering new activities wasfurther reduced. Furthermore, the rapid increase in public investment raisedthe relative return of construction vis-a-vis other sectors. As certainfactors of production are mobile between sectors, the increased demand forconstruction work attracted domestic resources away from manufacturing. Thedampening effect that these changes in relative incentives had on manufactur-ing growth were compounded by a number of non-policy related constraints suchas a poor and subsequently neglected physical infrastructure which raiseddomestic manufacturing costs, an indigenous financial sector which was justbeginning to develop, and certain exogenous factors such as the general worldrecession following the second oil price shock and a steady depreciation inSri Lanka's terms of trade. As a result, over the period 1977-84, manufactur-ing declined as a proportion of GDP in constant 1970 factor prices from 14.7%to 13.8% and manufactured exports (excluding petroleum re-exports andgarments) increased in current prices from $13 million to only $69 million.1/

88. Within the manufacturing sector the performance of the publicly ownedmanufacturing enterprises (PEs) has been particularly poor. Although thenumber of PEs has not expanded since 1977, they still contribute approximately40% of the manufacturing value added. Manufacturing PEs have found it dif-ficult to compete in a more open economy, at the same time as the Governmenthas been reluctant to press forward with the necessary rationalizationprocess. The end result has been one of PEs growing slowly within a policyenvironment which provides them with enough protection to avoid closure but

1/ In contrast, garment exports increased from $13 million to $296 millionover this period.

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not enough resources, autonomy or competition co stimulate structuralchange. 1/

Prospects and Issues

89. As discussed earlier, a sustainable medium-term scenario is dependentupon a significant increase in the rate of growth of manufactured exports andefficient import substitution activities. The annual real growth rate inmanufacturing is projected to increase from the 3.5% rate achieved in therecent past to 4.8% over the period 1984-89 and then to a gradually higherlevel in the next decade.2/ A much improved rate of growth is expected fromthe processing industries linked to tree crops; they constitute about onequarter of value added in industry and should grow at 2 to 3% per annum, asopposed to stagnation in the past. Exports of manufactures, which make upsome 15% of value added, should increase at 10% per annum: this applies toboth garments, which are currently the bulk of manufactured exports and, inview of past performance, are expected to continue to expand, and to exportsof other manufactures which, starting from a small base, should grow rapidlyif given adequate incentives. The remainder of industrial production gearedto the domestic market makes up about 60% of value added and comprises theoutput of public manufacturing enterprises as well as private production ofmostly simple manufactures. It should expand at 4.5 to 5.0% per annum, orclose to the rate of growth of GDP, given the fairly high marginal propensityto consume industrial products as real incomes increase, and assuming, ofcourse, an appropriate incentives and especially exchange rate policy accom-panied by a gradual rationalization of public manufacturing enterprises.

90. The policy agenda needed to achieve thi3 growth is as follows. On themacro side, a more responsive exchange rate policy is essential, as is acontinued reform of trade taxes. This needs to be supported by a furtherreduction in the budget deficit to restrain inflationary pressure and lowerinterest rates. At the sectoral level a broad program of measures is requiredto stimulate manufacturing without preference for particular activities. Sucha program would include allocating a larger share of public resources forimproving the basic infrastructure, undertaking administrative reforms aimedat reducing the bureaucratic impedimants that confront potential investors,and implementing measures designed to rationalize, and raise the productivityof, manufacturing PEs. If manufactured exports are to expand, policies haveto be adopted which will enable the private sector to compete againstproducers in other countries. The manufacturing exports market is extremely

1/ This is discussed in a draft World Bank report entitled, "SelectiveIssues in Industrial and Trade Policies".

2/ The Government's own projections support this view although theyanticipate much higher rates of growth for manufacturing as a whole --

in particular manufactured exports.

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competitive and relatively small bureaucractic obstacles or unnecessary addi-tional costs can have a significant effect on export competitiveness.Although most of the growth is expected to originate in the private sector,the Government's role is to reformulate policy towards providing a consistentand outward-oriented set of policies which assist the traded goods sector,particularly exports. The Government is well aware that a more dynamicmanufacturing sector needs to be developed and has recently undertaken severalreforms which show its determination to confront difficult policy issues.

Recent Government Initiatives and Upcoming Policy Issues

91. The following discussion is focused on recent Government initiativesin the industrial policy area, including: the formation of an industrialpolicy committee, tariff reform, rationalization of PEs and export promotionmeasures. It also suggests the next steps to be taken in these areas, ifindustrial growth is to accelerate.

(a) Industrial Policy Committee

92. The absence of an overall industrial strategy has been a major factorunderlying the poor performance of the manufacturing sector. As a result,the policy framework for manufacturing has been shaped by a number of groupswith different interests and views. This has Led to the adoption of a largenumber of selective policies which in aggregate often conflict with oneanother drawing resources into inefficient activities, giving confusing sig-nals to potential investors, and generally slowing expansion. While such asituation is certainly not peculiar to Sri Lanka, the malaise of industry andtrade policy has drawn particular attention because of the strong commitmentand clarity of purpose demonstrated by the Government in undertaking the 1977reforms.

93. In response, the Cabinet has recently approved the formation of anIndustrial Policy Committee (IPC) which has representatives from the threeministries directly involved in industry,1/ the Export Development Board andthe Business Development Council. The Secretary of Finance and Planning ischairman, and the Director of Planning in the same ministry is a member withthe responsibility for coordinating the committee's findings. The objectiveis to repeat the successful outcome of an experiment in the agriculturalsector, where a similar body was able to produce a consensus document outlin-ing the first steps of an overall strategy for agricultural policy and

1/ The Ministry of Industry and Scientific Affairs, the Ministry ofTextiles and the Ministry of Rural Industries.

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projects.l/ The task facing the IPC is a difficult and complex one. Thedevelopment of a consensus strategy will necessarily involve some painfulchoices in terms of rationalizing and restructuring the industrial sector.

(b) Tariff Reform

94. The recommendations made by the Presidential Tariff Commission (PTC)to Cabinet to undertake a fairly major reform of the import tariff structurewere accepted, with the new tariff schedule being implemented via the 1985budget. The objective of the tariff reform was to reduce the variance ineffective protection coefficients (EPCs) to a narrower range, which, accordingto PTC calculations, would be achieved by establishing a nominal tariff struc-ture with a range of 5% to 75%. In this first phase of reducing both therange of EPCs and the overall level of protection, the PTC recommended raisingtariffs on those products where protection was low and reducing those tariffswhere protection was inordinately high. As the PTC stated, "this is on thebasis that there is no rationale in protecting one product at a very highlevel and not give a comparable level of protection to another product inorder to ensure a more efficient allocation of resources". The new tariffschedule largely achieves the objective set for this phase of tariff reform.

95. The PTC's approach to reforming the tariff structure appears to bevery thorough and the implementation of their recommendations by Government isa significant positive step in moving towards a more neutral trade regime.The Government showed considerable resolve in pushing forward with this reformdespite much internal opposition. Furthermore, there is active discussion onconverting the PTC into a permanent body so as to retain the institutionalcapability of undertaking the next phase of tariff reform designed to furtherreduce trade tax-related distortions.

96. Nevertheless, this is a first step and there are a number of anomalieswhich should be highlighted and discussed. First, a general reduction in theoverall tariff level should have been accompanied by an exchange ratedepreciation, if we assume that the currency was not undervalued before thereform.2/ A reduction in import taxes effectively results in an appreciationof the real exchange rate confronting importers, thus reducing the costs ofimported products on the local market. An adjustment of the exchange ratecompensates for this effect, at the same time as providing a boost to allexporters and import-substitution producers. To the extent that the Business

1/ See "National Agriculture, Food and Nutrition Strategy - A Change inPerspective", National Planning Division, Ministry of Finance andPlanning, June 1984. This is reviewed under the section dealingwith agriculture.

2/ As is argued later, the data suggest that the exchange rate isovervalued.

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Turnover Tax (BTT) changes discussed below marginally offset the tariffreform, then the necessity for an exchange rate adjustment is reduced. It isrecommended that any further reform of the tariff structure which attempts toreduce the overall level of protection should simultaneously involve anestimation of the required exchange rate adjustment.

97. Second, some 35 products were omitted from PTC's listed recommenda-tions foLlowing objections by representatives from the Ministry of Industriesand Scientific Affairs. As these omissions leave the level of protectionprovided to certain PEs at disproportio.ately high levels, the economiceffects of continuing to leave these products outside the general tariffreform need to be reconsidered.

98. Third, the reduction in the tariff on imported machinery from 7-1/2%to 5% or 0% in the case of producers that export more than 50% of theiroutput, departs from the methodology of moving towards an equalization oftariffs. The rationale is to assist private investors especially thoseengaged in export activities. However, this does create a bias in favor ofcapital as opposed to labor using production techniques and may represent apoor second best measure to offset the disincentive effects of an overvaluedexchange rate.

99. Fourth, the basis for valuing imports for the levy of BTT was changedby adding a hypothetical 10% profit margin, thereby increasing BTT paymentson imports. The rationale is that as local producers already pay BTT on aprice that includes their profit margin, importers should be placed on thesame footing. In this sense it equalizes the tax incidence between importsand locally produced goods. Nevertheless, the imposition of this additionaltax on imports does reduce the extent to which the recent tariff reform suc-ceeded in lowering the overall level of protection. It should also be notedthat the effect this tax has on relative rates of effective protection betweengoods will vary due to differences in domestic value added. How importantthis effect is can only be determined empirically; however, given that thehypothetical margin is 10%, it is probably not very significant.

100. To conclude, in addition to addressing these anomalies it isanticipated that the PTC will press ahead with the next phase of tariffreform. This will involve a further reduction in both the overall level andvariance of effective protection.

(c) Public Manufacturing Enterprises

101. The Government continues to be concerned about the poor performanceof PEs for two basic reasons. Firstly, as pointed out earlier, many PEs drawreal resources into low return activities and utilize those resources ineffi-ciently which acts as a brake on the performance of the manufacturing sectorin aggregate; and secondly, PEs as a whole continue to make significantdemands on budgetary resources. As Table 9 demonstrates, budgetary transfersto manufacturing PEs have increased since 1981, with most of the expansion

taking place in current transfers and advance account payments and not capitaltransfers designed to restructure PEs and raise productivity. By way ofillustrating the type of trade-offs involved, it is notable that the non-capital transfers in 1984 to manufacturing PEs slightly exceeded the totalcost of the food stamp program in the same year. Even if one ignores theefficiency arguments one could question the welfare gains of continuallysubsidizing those employed in particular manufacturing plants as opposed tousing those resources to increase the value of the food stamps offered to thepoorest segment of Sri Lanka's population.

Table 9: BUDGET SUPPORT OF PUBLIC MANUFACTURING ENTERPRISES(Rs million)

1978 1979 1980 1981 1982 1983 1984 a/

Current Transfers 658 231 246 66 883 730 1,025Capital Transfers 1,272 741 623 251 510 234 570Advances - 183 -148 -12 22 455 615Total 1,930 1,155 721 305 1,415 1,419 2,210

Total as % of GDP 4.5 2.2 1.1 0.4 1.4 1.2 1.5

a/ Estimates.


102. In response to this situation the Government is undertaking a numberof initiatives. For example, the Ministry of Finance has begun to put con-siderable pressure on those line ministries that have responsibilities formanufacturing PEs to complete the valuation of PE assets, a request that hasbeen ongoing for two years. The reluctance of PEs and line ministries tocomplete this task is believed to stem from the view that such a valuation isthe first step in a process of privatization. The Government, however, hasoffered assurances that this is not necessarily the planned outcome. Whateverthe future of PEs, it is argued that a valuation of assets is an essentialfirst step in undertaking a reform of their financial structure.

103. The Government is also preparing a paper which should suggest somefurther reforms for manufacturing PEs. One component is a proposal to solvethe legalistic uncertainty that Government Owned Business Undertakings (GOBUs)currently operate in by making them either private companies or fully-fledgedPEs. GOBUs were private companies that were taken over by the State under the1971 Business Undertakings (Acquisition) Act, because either they were indanger of liquidation or they followed what were perceived to be unfair trad-

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ing practices. Since that time GOBUs have operated in a legal enviro..aentwhich approximated a sort of middle ground between the private sector and PEs.Subject to private sector interest, it would be preferable to allow GOBUs toreturn to their former private sector status.

104. Lastly, the Government is actively discussing the option ofprivatization, particularly in the case of telecommunications. Although thereis considerable opposition to privatization, the Government feels that thismay provide the only mechanism through which modern technology, increasedproductivity, and better consumer service can be achieved.

105. While these recent initiatives are encouraging, a more wide-rangingset of reforms is required. A World Bank draft industry report of November1984 outlined a possible approach to the process of rationalizing manufactur-ing PEs, and the 1984 CEN provided a summary of these recommendations. Thereform of PEs is a complex area where protectionist feelings run deep partlybecause of the desire to maintain employment and partly because of the beliefthat "industrialization" must be initiated by the public sector due to theimmaturity of the private secto-. Hiwever, Lhe employment and training objec-tives could be attained at a much lower cost without the significant distor-tions created by PEs, whereas the latter argument lacks credibility when oneobserves how the private sector reacted in Sri Lanka when strong positiveincentives were offered.

106. The creation of more jobs and a higher level of productivity willrequire a more outward-oriented industrial strategy which will in turn neces-sitate that manufacturing PEs are able to compete. Restructuring the many PEswill inevitably take time and will involve some painful short-run choices asthe economy adjusts. While political and social realities may dictate thepace of reform, this must be moderated by an equal concern for the negativeeffects on medium-term growth if policies are not changed.

107. One approach would be to initiate a firm-by-firm objective assessmentof the ability of manufacturing PEs to compete in a more open economy. Thestudies could start with those firms at either end of the efficiency spectrumwith the intention to close down those plants unable now or in the future tocover variable costs and to privatize those that are competitive and are ableto attract private capital. Such a series of firm level studies should beaccompanied by a general reduction in both tariff protection and budget sub-sidies provided to PEs. However, for many PEs a transition period will berequired to bring them to the point where private investors will find themattractive. PEs have operated under an enormous burden of ad hoc policymeasures, the effects of which will take time to dissipate. This type ofrationalization will require a commitment to undertake a time-phased plan ofaction for each PE, that clearly outlines the investment, institutional, andincentive measures that are required to raise productivity.

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(d) Export Policy

108. Sri Lanka has a range of policy measures designed to assist exporters,particularly those involved in the export of manufactured or non-traditionalproducts. Bodies such as the Export Development Board have been establishedto promote exports and to provide direct assistance to exporters in estab-lishing market links and in obtaining finance. However, the recent apprecia-tion of the exchange rate has largely dwarfed the positive incentive createdby these measures. Thus, before considering specific export assistancepolicies, recent trends in the exchange rate will be discussed.

Graph 1: EFFECTIVE EXCHANCE RATES, 1978-85 a/(1978/79 = 100)

150

Real index using CPI

100 * ..-.. . --.

Nominal index *.

50- - - - - - -----1978 1979 1980 1981 1982 1983 1984 1985

at An increase in the index indicates appreciation.

Source: IMF staff calculations.

109. As Graph 1 illustrates, the Sri Lankan rupee has more or less con-tinuously appreciated in real terms since 1977. The real effective exchangerate is defined as the nominal effective exchange rate adjusted for movementsin the price level of Sri Lanka relative to those of its major tradingpartners; it is equivalent to an index of relative prices expressed in acommon currency. As defined, an increase in the real effective exchange rateindicates a loss in overall price competitiveness. Although different indiceswill generate different absolute numbers, almost any acceptable methodology

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would indicate a significant appreciation of the Sri Lanka rupee in comparisonwith the currencies of its export competitors, its major import suppliers,or its export markets.1/ The result has been a steady decline in both theprofitability of existing export businesses and those import-substitutionactivities unable to lobby for higher import tariffs, and an increase in theincentive to enter non-traded activities such as the distribution and tradingof imported products.

110. Leaving the exchange rate issue aside there are a number of specificexport promotion measures in effect in Sri Lanka. For example, exporters ofnon-traditional goods are eligible for a rebate of the import duty and BTTpaid on inputs.2/ These rebates represent an acceptable mechanism by which tooffset the disparate tax effect that local taxes (i.e., BTT and importtariffs) have on exporters. Although these rebates can be significant, thereare problems in administering the system. For example, exporters complainthat the process through which one claims a rebate is time consuming and itcan take several months until payment is received. Aside from the costsinvolved in obtaining the rebate, the system also generates unintendedincentives. The existence of high import tariffs and therefore substantialprofit opportunities in the domestic market, create strong incentives for someproducers to abuse the rebate system. A lower more neutral import tariffstructure would reduce such incentives as well as making the rebate schemeeasier to administer. It should also be noted that such a rebate scheme isnot a substitute for an appropriate exchange rate policy.

111. There are also schemes for exporters to obtain preshipment finance,export credit guarantees, export insurance, export expansion grants, andsubsidized credit. Some of these measures assist in reducing the bias againstexporters but they are selective and sometimes difficult or costly to attain.For example, there is a credit limit on the amount of preshipment financeavailable tied to refinancing by the Central Bank. Each commercial bankallocates its share of the subsidized credit to the larger and better knowncustomers, which places smaller or new firms at a disadvantage.Alternatively, the export insurance offered by the Sri Lanka Export CreditInsurance Corporation offers very little, if any, additional assistance toexporters. Its premium rates are said to be high, some potential customersquestion its readiness to meet its obligations, and it is conservative inaccepting risky exports. Potential investors also frequently complain aboutthe number of approvals required to start an export business and the timeofficial bodies require to process their application.

1/ Except the U.S.A.

2/ Beginning February 1, 1985, a system of bonded minufacturing for garmentexporters has been introduced. Therefore, the need for rebates togarment exporters will not arise.

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112. Although exporters, like any other group of entrepreneurs, are alwayslikely to complain that incentives are insufficient and the Government shoulddo more, the absence of growth in manufactured exports, other than garments,supports their case. The aforementioned export promotion measures do indeedassist some exporters, but they are inadequate to overcome the anti-export oranti-traded goods obstacles which other policy measures produce. Theappreciation of the real exchange rate significantly reduces the response thatone can expect following the adoption of relatively minor export promotionmeasures. Producers of tradeables already confront an inadequate infrastruc-ture (roads, railways, telephone) which raises costs relative to competitors.Such a situation can only be made worse if other policins such as the exchangerate, tariff structure or investment approval system are so designed that theyin effect raise the costs and reduce the profitability of entering exportactivities relative to non-traded or heavily protected import-substitutionactivities.

Conclusion

113. In sum, the Government has begun to tackle in earnest several impor-tant issues, the resolution of which is required to achieve an acceleration inindustrial growth. The most important of these are the exchange rate, tradetaxes, reform of PEs, development of basic infrastructure and administrativereform. To help develop a consistent industrial policy framework, theGovernment has formed a high level Industrial Policy Committee. TheGovernment has also initiated the first phase of a thorough tariff reform andit has continued to press hard to initiate reform of the PE sector. Theseinitiatives must now be pursued further. The phased process of tariff reformmust be continued and certain anomalies in the first stage corrected.Concrete action to reform the public enterprise sector must be initiated earlysince this process is likely to take time. Above all it is crucial for theGovernment to establish and pursue an appropriate exchange rate policy whichwill keep Sri Lanka internationally competitive in a wide range of exportingand import substituting activities.

D. Downside Risks

114. The base scenario developed in this report rests upon some fairlyimportant changes in the current policy environment and, more in particular,the adoption of an export-led development strategy. In addition, controllinginflation and maintaining financial stability are assumed to be major objec-tives of the Government's monetary and fiscal policy. Should it prove, forwhatever reason, impossible to implement the policy reforms discussed above,the growth of the Sri Lankan economy in the medium term is likely to slow downconsiderably resulting in stagnant income levels and increasing unemployment.

115. To illustrate, two possible alternatives to the base scenario areshown in Table 10. Both involve lower projected export growth assuming thepolicy environment is not conducive to the development and expansion of non-traditional exports and hence a sharply lower domestic savings performance.

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In alternative I, the high rate of investment and GDP growth is maintainedthrough increased reliance on foreign borrowing to compensate for the short-fall in export receipts. A higher level of production for domestic privateconsumption or a higher level of government consumption spending, supported bycontinued rapid growth in imports, would, at least temporarily, lead to highertotal consumption growth than in the base scenario. However, in these condi-tions the external debt service ratio quickly rises to unacceptable levels,soon restricting the country's access to voluntary foreign capital inflows. Amore probable outcome of a lower export growth performance is alternative II.In this case, it is assumed that the Government reacts to the weaker exportperformance by curbing investment and import growth and reducing the growth ofoutput, incomes and employment. Foreign capital inflows would be such as tokeep the debt service ratio within manageable limits but would be insufficientto offset the lower level of export receipts. Given the limits to importsubstitution in a small economy such as Sri Lanka, import restrictions wouldmost probably have to be imposed. The rate of growth of total consumptionwould eventually be reduced severely. While this outcome does maintain finan-cial equilibrium, it would represent the failure of Government to achieve itsprime objectives of increasing employment, incomes and the general livinglevels of the population. In addition, it should be noted that the debtservice ratio would exceed that in the base scenario and would continue togrow, ultimately forcing an even lower rate of growth on the economy.

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Table 10: ALTERNATIVE GROWTH SCENARIOS, 1984-94

No Further Policy ReformBase Scenario Alternative I Alternative II

1984-89 1989-94 1984-89 1989-94 1984-89 1989-94

Annual Real Growth Rates (Z)GDP 5.0 5.5 5.0 5.5 3.9 3.9Consumption 4.5 4.8 5.3 5.6 4.3 3.6Exports of G+NFS 4.9 5.9 2.4 3.2 2.4 3.2Imports of G+NFS 4.0 4.2 4.0 4.2 2.7 2.8

1989 1994 1989 1994 1989 1994

As % of GDPInvestment 26.0 26.0 26.0 26.0 24.0 24.0Gross National Savings 20.2 21.3 16.4 12.0 16.8 15.3Foreign Savings 5.8 4.7 9.6 14.0 7.2 8.7

Public Debt Service Ratio (%) 16.2 15.1 21.0 40.0 18.3 24.4

Source: Bank staff estimates.

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Chapcer III: THE BALANCE OF PAYMENTS OUTLOOK AND AID REQUIREMENTS

A. Balance of Payments Prospects and Borrowing Strategy

116. The balance of payments projectiuns implicit in the base scenario arepresented in Table 11. The overall outlook is for a stable balance of pay-ments situation with the public debt service ratio 1/ kept within prudentlimits.

Export Prospects

117. Exports of goods and non-factor services in real terms are expected togrow at 4.9% per year during 1984-89 and at 5.9% per year during 1989-94. Asexplained above, these growth rates depend on the restoration of internationalcompetitiveness, i.e., the pursuit of a realistic exchange rate policy sup-ported by strengthened export promotion measures. In the case of traditionalexports, the adoption of taxation/subsidy measures designed to increaseproducer margins significantly and, for the state plantations, the executionof the Medium-Term Investment Plan (MTIP) and associated management reformsshould ensure the rehabilitation and recovery of this sector. However,because of the long-gestating nature of the investments, traditional exportvolumes are expected to grow at only about 1.4% per annum through 1989.Thereafter, the implementation of the MTIP is expected to result in a realgrowth rate of traditional exports of close to 3% per year. Nevertheless, thegrowth potential of traditional exports is limited and Sri Lanka must looktowards an expansion in non-traditional exports if the Government's medium-term growth objectives are to be attained. The analysis in the base scenariosuggests that, to this end, non-traditional exports will have to grow ataround 9.5% per year in real terms over the coming years.

1/ Including IMF charges and repurchases.

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Table 11: BASE SCENARIO BALANCE OF PAYMENTS PROJECTIONS, 1984-88(US$ Millions)

1984 1985 1986 1987 1988

Exports (G+NFS) 1,755 1,634 1,905 2,162 2,454Merchandise (fob) 1,475 1,340 1,573 1,774 2,002Non-factor Services 280 294 332 388 452

Imports (G+NFS) 2,121 2,266 2,520 2,833 3,193Merchandise (cif) 1,911 2,036 2,261 2,541 2,863Non-factor Services 210 230 259 292 330

Resource Balance -366 -632 -615 -671 -739

Net Factor Income -131 -116 -122 -125 -137(M&LT Interest Payments) (-103) (-111) (-122) (-128) (-147)

Net Current Transfers a/ 277 291 313 338 365

CURRENT ACCOUNT -220 -457 -424 -458 -511

Net Direct Investment 36 40 50 60 65Official Grants 154 141 145 150 154Bilateral & MultilateralLoans (net) 261 338 300 302 318Disbursements 310 400 372 376 399Amortization 49 62 72 74 81

Private Loans (net) 50 29 16 96 132Disbursements 100 101 108 228 285Amortization 50 72 92 132 153

Short-Term & Capital, n.e.i. 24 0 0 0 0

Change in Reserves(- indicates increase) -305 -91 -87 -150 -158

Memo Items:Gross Official Reserves

at Year End 600 655 683 765 858Net Credit from IMF 9 -36 -59 -69 -64

Purchases 32 0 0 0 0Repurchases 23 36 59 69 64

Debt Service PaymentsPublic M&LT Loans 202 245 287 334 381IMF 55 66 85 90 79

Public Debt Service Ratio b/ 14.2 18.1 18.6 18.8 18.0

a/ Private remittances.bl Ratio of debt service payments on public and publicly guaranteed medium

and long-term debt, including IMF charges and repurchases, to exportsof goods and services.


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Table 12: EXPORT AND IMPORT DETAIL(in million US$ at current prices)

Actual Projections1980 1984 1985 1986 1988 1994

A. Exports of Goods and Non-Factor Services

Tea 373 620 404 498 580 954Rubber 157 130 121 147 181. 336Coconut products 46 60 86 94 105 166Other agric. products 80 76 86 100 136 284Petroleum products 189 129 129 129 154 270Garments & textiles 110 296 348 412 581 1,307Other manufactures 43 69 80 94 133 334Gems 40 25 36 40 52 98Other 27 70 50 59 80 181

Sub-total 1,065 1,475 1,340 1,573 2,002 3,930

Non-factor services 232 280 294 332 452 1,017

TOTAL 1,297 1,755 1,634 1,905 2,454 4,947

Memo Item:Total in constant

1984 prices 1,338 1,755 1,807 1,895 2,109 2,956

B. Imports of Goods and Non-Factor Services

Food 422 295 313 339 403 604Other consumer goods 107 128 138 152 185 301Petroleum 489 419 434 449 571 1,249Intermediate goods 540 556 615 698 909 1,844Capital goods 493 513 536 623 795 1,423

Sub-total 2,051 1,911 2,036 2,261 2,863 5,421

Non-factor services 154 210 230 259 330 584

TOTAL 2,205 2,121 2,266 2,520 3,193 6,005

Memo Item:Total in constant1984 prices 1,877 2,121 2,180 2,284 2,472 3,150

Sources: Central Bank of CeyLon and Bank staff estimates.

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118. The country has considerable potential to increase output of non-traditional agricultural exports; with improvements in product quality andmarketing efficiency, an export growth target of 8% per year in real termsshould be attainable. While it is difficult to see the recent rapid growth ingarment exports recurring in the future, especially given the operation ofquota restrictions, a more moderate expansion of about 10% per year in realterms should be within reach, assuming that the costs of production in SriLanka remain competitive. The volume of other manufactured exports, startingfrom a low base, shoujd be able to expand at some 10% per year in real termsunder the assumed conditions of an appropriate incentives framework(Chapter II).

119. By 1988 the combined export earnings of non-traditional agriculturalproducts, garments and "other" manufactures, in current prices, should equalearnings from the three traditional exports (Table 12). This is a significantshift from 1980 when the latter made up 54% of merchandise export earningsversus only 22Z for the combined earnings of the former three product groups.The estimates in current prices have been derived using World Bank priceprojections for major commodities or commodity groups. For merchandiseexports as a whole, prices are projected to increase by about 20% over thenext five years. The export price of tea clearly is of major importance inthese projections. In the light of recent market developments, f.o.b. pricesfor tea have beei projected to decline from $3.03/kg in 1984 to $2.08/kg in1985 and to rise thereafter gradually to reach the 1984 level in current termsonly by 1989. In real terms tea prices in 1989 would be 40% below the veryhigh level in 1984.

120. The current political uncertainty has been highly detrimental to thetourism industry and earnings from tourism in 1985 are not expected to exceedthose of 1984. However, given the restoration of a stable social and politi-cal environment, the tourism sector should gradually resume expansion reachingannual growth rates of 8% in real terms. The growth in private remittanceswhich had been very rapid in recent years has begun to slow down; it isassumed in these projections that remittances will remain constant in realterms in the future.

Import Prospects

121. The policy environment subsumed in the base scenario, especially thepursuit of a realistic exchange rate policy, and tariff reform, will alsofacilitate efficient import substitution. This, together with restraint inpublic sector spending, should help reduce the rate of growth in imports.Nevertheless, in a growing open economy imports can be expected to continue toexpand fairly rapidly. Imports of goods and non-factor services in real termsare projected to grow at 4% per year during 1984-89 and at 4.2% per yearduring 1989-94.

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122. Food imports should increase very slowly. The country has by nowbecome virtually self-sufficient in rice; sugar imports should decline asexisting capacity is more fully utilized and as several new sugar projectscome into operation; and, while wheat grain imports could expand quiterapidly, much will depend on the availability and price of rice. Growth inthe imports of other consumer goods should also be moderated by appropriateexchange rate and credit policies. In addition, consumption of petroleumproducts and thus petroleum imports should grow slower than in the past as thenew hydro schemes become fully operational. On the other hand, the demand forintermediate goods imports is anticipated to expand quite rapidly. Given SriLanka's natural resource base, any significant increase in economic growth andin exports of manufactures will necessarily entail a rapid expansion inimported intermediate inputs. Imports of capital goods could normally beexpected to grow at the rate of growth of capital formation. However, asprivate investment is, on the whole, less import/capital-intensive than publicinvestment, a reduction in the proportion of total investment accounted for bythe public sector should also assist in moderating the total demand forimported capital goods. In current prices, the most notable changes in thecomposition of imports between the early 1980s and 1988 are a continuingdecline in the relative importance of food imports Pnd an increase in theshare of imports of intermediate goods. The estimates in current prices arealso derived using World Bank price projections for major commodities.Merchandise import prices are projected to increase by about 35% over the nextfive years. This, together with the export price projections, results in adeterioration in Sri Lanka's terms of trade of about 11% over the next fiveyears when compared with 1984.

Foreign Exchange Requirements

123. The projections above imply that exports and private remittances wouldhave to cover roughly 88% of import requirements of goods and non-factorservices during 1985-88 compared with 80% during 1980-84 (see Table 13).There is a marked increase in amortization payments during 1985-88 comparedwith the previous period and there are substantial repayments to the IMF. Indollar terms, import requirements not covered by export earnings and privateremittances during 1985-88 amount to $1,350 million. In addition, over thesame period, interest payments and amortization on medium and long-term debtamount to $1,246 million, repayments to the IMF total $228 million, and thecumulative addit -n to gross reserves to maintain imports coverage at 3 monthsis $258 million. Total external capital requirements during 1985-88 thusamount to about $3 billion.

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Table 13: CUMULATIVE FOREIGN EXCHANGE REQUIREMENTS AND SOURCES OFFINANCING, 1981-88 a/

(in million US$)

1981-84 1985-88

RequirementsImports of goods and non-factor services 8,519 10,812Net factor payments 464 500

(Interest paid on M&LT debt) (308) (508)Amortization on M&LT debt 293 738Increase in gross reserves 403 258Net repayments to IMF b/ -157 228

TOTAL 9,522 12,536

Sources of FinancingExports of goods and non-factor services 5,766 8,155Private transfers and remittances 1,018 1,307Net direct investment 185 215Official grants 649 590Bilateral loans, concessionary 610 845Multilateral loans, concessiunary 340 602Multilateral loans, non-concessionary 30 100Loans from private sources 655 722

Suppliers' credits (32) (109)Financial institutions (623) (613)

Other capital (net) c/ 269 -

TOTAL 9,522 12,536

al 1981-84 Actual, 1985-88 Projections.b/ Purchases exceeded repurchases by $157 million during 1981-84.c/ Includes short-term capital, non-Government guaranteed M&LT

capital, SDR allocations and errors and omissions.

Sources: Central Bank of Ceylon, World Bank Debt Reporting System andBank staff estimates.

Borrowing Strategy: Official Sources of Funds

124. About 70% of the $3 billion of external finance needed during 1985-88is expected to come from official sources on highly concessionary terms.Grants from official sources are projected at about $600 million and disburse-ments of loans from bilateral and multilateral sources at about $1,550million. About 40% of these disbursements or $850 million would be availablefrom the pipeline at the end of 1984. Therefore, new commitments from offi-

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cial sources, loans and grants, would have to rise from $460 million in 1984to $600 million by 1988. It should be noted that this Level of commitmentsimplies no growth in real terms.

125. Commitments of official assistance have declined substantially fromthe peak of $800 million in 1981. In the past two years they have averagedabout $450 million a year (Table 14), partly because both Government anddonors made a conscious effort to limit the introduction of new projects in apublic investment program which had grown beyond the country's absorptivecapacity. Current indications are that the aid donors are likely to make newcommitments amounting to about $500 million during 1985. For 1986 we wouldalso recommend to the donors a level of new aid commitments in the range of$500-550 million. This level of support is a vital component in the overallstrategy of restructuring the Sri Lankan economy at the same time as contain-ing foreign commercial borrowing at a manageable level. Areas most urgentlyin need of support include rehabilitation of existing irrigation schemes,completion of downstream work in Mahaweli, rehabilitation of the road network,power transmission and generation, and telecommunications. Financing of localexpenditures in support of the Government's own efforts to raise public sectorsavings and reduce the overall budget deficit should also receive highpriority.

Table 14: NEW COMMITMENTS OF OFFICIAL ASSISTANCE AND COMMERCIALLOANS, 1981-88(in million US$)

Actual Estimates1980 1981 1982 1983 1984 1985

Official grants 138 162 162 171 226 141Bilateral loans, concessionary 259 402 166 155 181 165Multilateral loans, concessionary 245 238 154 118 43 130Multilateral loans,

non-concessionary - - 43 - 12 60Sub-total 642 802 525 444 462 496

Suppliers' credits 30 1 - - 61 30Financial institutions 202 232 274 38 43 100

TOTAL 874 1,035 799 482 566 636

Sources: Central Bank of Ceylon, World Bank Debt Reporting System, andBank staff estimates.

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Private Sources of Funds

126. Of the roughly $3 billion in foreign exchange requirements during1985-88 (para 123) some $935 million would still have to be met from privatesources. About $215 million is expected in the form of private direct foreigninvestment, and the remaining $720 million would have to come in the form ofloans from suppliers' credits and commercial bank loans. To support thislevel of disbursements, new commitments of private loans would need to risefrom $130 million in 1985 to about $285 million by 1988.

127. A substantial portion of this commercial borrowing would be relatedto cofinancing requirements for some large projects with good economicjustification, such as the major upcoming power projects. Additionalcofinancing needs are likely to arise in the future, and it is important forSri Lanka to monitor carefully its reliance on commercial borrowing fordevelopment. As with all borrowing, it is crucial that the funds be appliedtowards efficient undertakings, whether in export production, import substitu-tion or infrastructure designed to increase productivity throughout theeconomy. In addition, it must be stressed that even this limited level ofcommercial borrowing is only feasible if exports grow as projected. Ofcourse, if additional concessionary assistance were to become available beyondlevels projected, then the reliance on commercial assistance could be reduced.In any event the Government will have to make important choices in allocatingthe limited concessionary funds among sectors. Care should be taken not touse concessionary aid to provide 100% financing for those projects suitablefor commercial cofinancing, as this would divert funds away from other impor-tant government programs in such sectors as transport, health or education.

B. External Debt Management

128. In the base scenario, with a concerted effort to build up exports,strong support from donors, and prudence in the use of commercial debt, SriLanka's debt servicing burden is manageable. Implementation of the policiesdiscussed earlier would result in the country becoming increasinglycreditworthy. The public debt service ratio, including IMF charges andrepurchases, rises to 18.8% in 1987 but then declines to 18.0% in 1988 and15.1% in 1994. Currently, Sri Lanka's external public debt, including undis-bursed debt, amounts to about $3.7 billion or the equivalent of 62% of CDP:disbursed debt alone amounts to $2.4 billion or 40% of GDP (Table 15). Thecomparatively low debt service ratio results because more than three quartersof the country's public debt is on highly concessionary terms. Nevertheless,as a share of CDP, interest payments alone are expected to continue to amountto a relatively high 2% during the next few years.

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Table 15: PUBLIC AND PUBLICLY GUARANTEED EXTERNAL DEBT OUTSTANDINGAT YEAR-END(US$ Millions)

Actual Actual Projected1983 1984 1988

Bilateral loansDisbursed 1,084 1,158 1,839Undisbursed 645 597 492Tot;" 1,729 1,755 2,331

Multilateral loansDisbursed 539 637 1,214Undisbursed 672 580 758Total 1,211 1,217 1,972

Suppliers' creditsDisbursed 38 27 40Undisbursed - 55 121Total 38 82 161

Commercial loansDisbursed 553 598 858Undisbursed 147 86 123Total 700 684 981

Total debtDisbursed 2,214 2,420 3,951Undisbursed 1,464 1,318 1,494Total 3,678 3,738 5,445

Memo Items:

Selected Debt Burden Indicators (Z)Debt outstanding & disbursed/CDP 43.0 40.0 46.0Debt service/exports of goods

& services a/ 17.7 14.2 18.0Interest/GDP RI 2.3 2.2 1.9Interest/exports of goods & services b/ 8.5 7.4 6.3

a/ Debt service includes IMF charges and repurchases.bR Interest includes IMF charges.

Sources: World Bank External Debt Reporting System and Bank staffestimates.

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129. As explained before the Sri Lankan economy remains highly vulnerableto world price changes in a few commodities, especially tea. For instance, iftea prices were to remain at the estimated average 1985 level in currentprices during the next 3 years and the foreign exchange gap is met by addi-tional commercial borrowing, the debt service ratio would rise 3 percentagepoints above that in the base scenario. This vulnerability underscores theneed to follow a countercyclical foreign reserves policy and maintain anaverage level of reserves at 3 months' imports coverage. The most crucialelement in balance of payments management, however, is to ensure that theexport growth targets are achieved. If they are not, borrowing from privateand official sources on non-concessionary terms will have to be curtailedsignificantly. In that case, Sri Lanka would then find its import capacityreduced significantly resulting in a lower rate of growth in production andemployment.

130. A program of adjustment along the lines set out 4- Chapter II isessential for sustained growth in the economy and for an mproved exportperformance. Success with the latter is crucial to the maintenance of asatisfactory external debt situation and improved creditworthiness. Onlyunder these circumstances can a policy of assuming additional commercial debtbe regarded as prudent.

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STATISTICAL APPENDIX

Standard Tables

Table 1: Sri Lanka - National Accounts Summary (Millionsof Rupees at Current Prices)

Table 2: Sri Lanka - National Accounts Summary (Millionsof US$ at Constant 1982 Prices)

Table 3: Sri Lanka - Balance of Payments (Millions ofUS$ at Current Prices)

Table No.

1.01 Population and Vital Statistics, 1963-841.02 Employment in the Public Sector, 1970-83

2.01 Gross Domestic Product: CompositiGi and Sectoral Deflators,1970-84

2.02 Growth Rates of GDP and Its Components, 1970-842.03 National Product and Expenditure, 1970-842.04 Percentage of Total Income Received by Each Tenth of Income

Receivers, 1963, 1973, 1978/79 and 1981/82

3.01 Balance of Payments, 1970-843.02 Composition of Exports, 1970-843.03 Industrial Exports, 1975-843.04 Composition of Imports, 1970-843.05 Selected Food Imports, by Source of Finance, 1970-843.06 Imports of Selected Consumer and Capital Goods, 1976-843.07 International Liquidity, 1970-843.08 Aid Commitments, 1970-843.09 Aid Disbursements, 1970-843.10 Aid Group Non-Project Assistance, 1965-843.11 Overall Aid Pipeline, 1983-85

4.01 External Public Debt Outstanding Including Undisbursed asof December 31, 1984

4.02 Service Payments, Commitments, Disbursements and OutstandingAmounts of External Public Debt as of December 31, 1984

5.01 Summary of Budgetary Operations, 1970/71-855.02 Budgetary Revenue, 1970/71-855.03 Current Expenditures, 1970/71-855.04 Government Budgetary Subsidies and Transfers, 1970/71-855.05 Capital Expenditure and Net Lending, 1970/71-855.06 Central Government Budget Debt Services, 1970/71-845.07 Government Enterprises, 1970/71-845.08 Current Transfers to Public Corporations, 1970/71-845.09 Capital Transfers to Public Corporations, 1970/71-84

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Table No.

6.01 Interest Rates of Major Credit and Savings Institutions, 1970-846.02 Monetary Survey, 1971-84

7.01 Volume of Agricultural Production, 1970-847.02 Paddy Cultivated Area and Production; Rice Availability,

Procurement and Distribution, 1970-847.03 Cultivated Area and Production of Subsidiary Food Crops, 1972-847.04 Tree Crops Production Statistics, 1970-857.05 Tea Producer Margin, 1970-847.06 Tea in the Public Sector, 1983-847.07 Rubber in the Public Sector, 1983-847.08 Fertilizer Issues by Crops, 1970-84

8.01 Growth of Industrial Outpu:, 1976-848.02 Manufacturing Survey, 1982 and 19838.03 Performance of Major State Industrial Corporations, 1977-838.04 Annual Physical Capacity and Output of Major State Industries,

1976-848.05 Industrial Investments Approved and Contracted by Greater

Colombo Economic Commission, 1979-848.06 Industrial Investment Approvals by Foreign and Local Investment

Advisory Committees, 1980-84

9.01 Petroleum Imports, 1970-849.02 Imports of Crude Oil by Country of Origin, 1970-849.03 Petroleum Product Exports, 1970-849.04 Domestic Production of Petroleum Products, 1970-849.05 Local Sales Volume of Petroleum Products, 1970-849.06 Production, Trade, and Apparent Consumption of Energy

Petroleum Products, 1970-849.07 Petroleum Product Price Changes, 1970-849.08 CEB Electricity Generation, 1970-849.09 CEB Electricity Sales, 1970-84

10.01 Minimum Wage Rate, 1968-8410.02 Colombo Consumer Price Index Numbers, 1976-8410.03 Wholesale Price Index, 1977-8410.04 Cost Indices for Selected Building Materials and Different

Construction Activities, 1972-8410.05 Administered Prices of Basic Consumer Goods, 1977-84

11.01 Selected Social Indicators, 1946-8411.02 Major Social Expenditures in Relation to Total Current

Budgetary Expenditures and to GDP, 1969/70-8411.03 Health Statistics, 1969/70-8411.04 Education Statistics, 1970-8411.05 Tourism: Arrivals by Regions, 1975-84

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Table 1: SRI LANKA - NATIONAL ACCOUNTS SUMMY(Millions of Rupees at Current Prices)

j278 197 1980 1981 1982 193 1984

1. Gross Domestic Product 42,665 52,387 66,527 85,005 100,140 121,928 152,955

2. Resource Gap (H-K) 2,044 6,305 15,012 13,645 18,730 18,377 9,3863. Imports (G+NFS) 16,872 23,976 36,457 39,550 45,890 50,376 53,9794. Exports (G+NFS) 14,828 17,671 21,445 25,905 27,160 31,999 44,593

5. Total Expenditures 44,709 58,692 81,539 98,650 118,870 140,305 162,341

6. Consumption 36,155 45,165 59,074 75,040 88,262 105,159 122,4917. General Government 4,043 4,798 5,685 6,310 8,210 9,607 n.a.8. Private 32,112 40,367 53,389 68,730 80,052 95,552 n.a.

9. Investment 8,554 13,527 22,465 23,610 30,608 35,146 39,85010. Fixed Investment 8,521 13,246 20,845 23,279 30,360 35,356 39,70011. Changes in Stocks 33 281 1,620 331 248 -210 150

12. Domestic Saving 6,510 7,222 7,453 9,965 11,878 16,769 30,46413. Net Factor Income -234 -234 -430 -1,713 -1,956 -3,200 -3,35814. Current Transfers 343 747 2,249 3,907 5,494 6,447 7,04615. National Saving 6,619 7,735 9,272 12,159 15,416 20,016 34,152

Average Exchange Rates:16. Rupees per US$ 15.608 15.569 16.534 19.246 20.812 23.529 25.43817. Rupees per SDR 19.541 20.115 21.527 22.693 22.982 25.152 26.194

Note: The exchange rates shown above are the official rates and were used inconverting from US dollars to national currency terms, items 3, 4, 13and 14.

p*

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Table 2: SRI LANKA - NATIONAL ACCOUNTS SUMMARY(Millions of US$ at Constant 1982 Prices)

1978 1198 11 M1 1982 1983 A2j

1. Gross Domestic Product 3,849 4,092 4,330 4,580 4,812 5,052 5,3052. Terms of Trade Effect 318 184 81 10 0 174 4833. Gross Domestic Income 4,167 4,276 4,411 4,590 4,812 5,226 5,788

4. Resource Gap (5-6) 176 456 851 664 900 688 1915. Imports (G+NFS) 1,458 1,736 2,067 1,923 2,205 2,141 2,1226. Capacity to Import 1,282 1,280 1,216 1,259 1,305 1,453 1,9317. [Exports (G+NFS)] 964 1,096 1,135 1,249 1,305 1,279 1,448

8. Total Expenditures 4.343 4,732 5,262 5,254 5,712 5,914 5,979

9. Consumption 3,368 3,445 3,685 3,862 4,241 4 457 4,57910. General Government 376 366 355 325 398 392 36111. Private 2,992 3,079 3,330 3,537 3,843 4,065 4,236

12. Investment 975 1,287 1,577 1,392 1,471 1,457 1,38213. Fixed Investment 970 1,260 1,462 1,372 1,459 1,466 1,37714. Changes in Stocks 5 27 115 20 12 -9 5

15. Domestic Saving 481 647 645 718 571 595 70816. Net Factor Income -15 -15 -23 -90 -94 -128 -10917. Current Transfers 30 54 128 190 264 293 30518. National Saving 496 686 750 818 741 760 904

Rupee Deflators (1982 - 100)19. Gross Domestic Product 53.3 61.5 73.8 89.2 100.0 115.9 138.520. Imports (G+NFS) 55.6 66.4 84.7 98.8 100.0 105.8 111.021. Exports (G+NFS) 74.1 77.5 90.8 99.7 100.0 120.2 148.022. Total Expenditures 49.5 59.6 74.5 90.2 100.0 114.0 130.523. Government Consumption 51.6 63.0 77.0 93.4 100.0 113.4 128.024. Private Consumption 51.6 63.0 77.0 93.4 100.0 113.4 128.025. Fixed Investment 42.2 50.5 68.5 81.5 100.0 115.9 138.526. Changes in Stocks 42.2 50.5 68.5 81.5 100.0 112.3 144.2

27. Exchange Rate Index 133.3 133.7 125.9 108.1 100.0 88.5 81.8

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Table 3: SRI LANA - BALANCE OF PAYMENTS(Millions of US$ at Current Prices)

12Z8. 12Z7 . 120 1281 1982 1983 1.8

1. EXPORTS (G+NFS) 950 1,135 1,297 1,346 1,305 1,360 1,7552. Merchandise (fob) 846 982 1,065 1,066 1,014 1,062 1,4753. Non-factor Services 104 153 232 280 291 298 280

4. IMPORTS (G+NFS) 1,081 1,540 2,205 2,055 2,205 2,138 2,1215. Merchandise (cif) 999 1,450 2,051 1,877 1,990 1,918 1,9116. Non-factor Services 82 90 154 178 215 220 210

7. RESOURCE BALANCE -131 -405 -908 -709 -900 -778 -366

8. Net Factor Income -15 -15 -26 -97 -98 -138 -1319. Factor Receipts 20 40 47 33 40 43 59

10. Factor Payments 35 55 73 130 138 181 19011. (M&LT Interest Paid) (25) (28) (33) (50) (69) (86) (103)

12. Net Current Transfers 22 48 136 203 264 274 27713. Transfer Receipts 39 60 152 230 289 294 30214. Transfer Payments 17 12 16 27 25 20 25

15. CURRENT BALANCE -124 -372 -798 -603 -734 -642 -220

MALT Capital Inflow16. Net Direct Investment 2 47 43 49 63 37 3617. Official Grant Aid 58 144 138 162 162 171 15418. Net M&LT Loans (DRS) 178 138 236 336 403 292 31119. Disbursements 242 187 286 380 472 373 41020. Repayments 64 49 50 44 69 81 9921. Other MLT (net) 0 0 0 0 0 0 0

22. Net Short-Term Capital -3 - 157 31 7 38 -2623. Capital Flows NEI and

errors and omissions -17 91 4 -8 72 105 50

24. Change in Net Reserves(- indicates increase) -94 -48 220 33 27 -1 -305

Memo Items:

25. Net Credit from IMF +20 +67 -4 +165 -6 -11 +926. Disbursements 48 105 39 229 43 38 3227. Repayments 28 38 43 64 49 49 23

Note: Underlying data from Central Bank of Ceylon except for lines 18-20which are from World Bank's Debt Reporting System, and lines 25-27from the IMF.

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Table 1.01: POPULATION AND VITAL STATISTICS, 1963-84

Net AnnualPopulation Birth Death Migration Natural

Year Mid-Year Rate Rate Rate Growth Rate('000) ----(per '000)----

1963 10,651 34.1 8.6 -1.0 2.551964 10,889 33.2 8.8 -1.0 2.441965 11,133 33.2 8.2 -0.5 2.501966 11,439 32.3 8.3 -0.5 2.401967 11,703 31.6 7.5 -0.6 2.411968 11,992 32.0 7.9 -0.7 2.411969 12,252 30.4 8.1 -0.9 2.231970 12,516 29.4 7.5 -0.8 2.191971 12,608 30.4 7.7 -2.7 2.271972 12,861 30.0 8.1 -3.2 2.191973 13,091 28.0 7.7 -3.8 2.031974 13,284 27.5 9.0 -4.0 1.851975 13,496 27.8 8.5 -2.3 1.931976 13,717 27.8 7.8 -3.8 2.001977 13,942 27.9 7.4 -3.7 2.051978 14,184 28.5 6.6 -2.8 2.191979 14,471 28.9 6.5 -3.0 2.241980 14,738 28.4 6.2 -4.6 2.221981 14,988 28.0 6.0 -3.4 2.201982 15,189 26.8 6.1 -6.0 2.071983 15,416 26.2 6.1 -6.8 2.011984 15,599 n.a. n.a. n.a. n.a.

n.a. not available.

Note: Figures for 1982-84 are provisional.

Source: Registrar General's Department.

табl е 1.02: IDIPLCTNEIR 1М те8 PODLIC BECrCR, 1970-63 v

391!? 1.4Z1 191� �9Z1 � Sl.zt � 9� i2TSt i4i1 � .91 � � 74 � � 1 � 1 � .� . 1 � � 3

Сол геве с Iевеi еисi оыв

Adвloi вtraCire, таеЬыi еаlаыд Ргоt еввi оыаl Officsrsоквс. ккт.nt 9,229 1о, а91 11,7т9 1 а, озо 1s,6a9 1 ь,1 зз 19, еьб 16,9о1 17,512 1в,збб 1в, ь39 1e.szs 1е, бц 16.76:

8ubosdtoata аерl о� . евр! 9s, ь7а 1 оз,оsо 11 а, ооо 13 о,ззб 1аа,l еь 15o,e9s 11 в, зо9 1еs, в93 19 з,9:: 2об,з19 то7,5 э3 то9, ц : 21о,3 о3 :1 т. ео:Mieor Еврl отеа. � I aб,s бa бь,sl о 9:,7т7 1от, з27 1 о9, ы 7 11з,71 а 1га,l эо бs,51ь 67,172 9ь,1 ь1 9s,9oa 99. о71 9 я,9 зб 1оо,1 пеерооl reacbaz � 9b,966 97,866 100,6 Э6 106,674 107,479 1o9,8SS 111.097 119,OOi 126, а37 133,269 1dS,270 1ц ,991 136,978 137,302Cthae в � � . 3 .� .+.iSSi � л,� .}� . � � ... � }... � lZ _ � ЭЭ4 i � � � � .� QS� � � � � � � Z � Ё�

тот� 1. 317,е17 з26, ббз 3s о,ц 2 зеб, о21 а12,26 а ь2s, бб5 ьоб, зеl ат2, ба7 мб, овs а7о,l еа ь7 б, абб аеl, ь7s aas,el: ьи .а7:

8евi- соvеги еыt Io вtitutioo в J ,Adвioi вt тative, тееЬыl свl

вnд Ркоf еввi ооаl OEticsr �о! вевf Е гвоk 6,315 12,зы 1ь,теб 15,збо 15,755 и ,793 1 а, бав 11,ьо: 12,239 13,oos 13, вз3 и ,3 оа и ,бо5 и . бя:

8ubordiaac � бврl отввв DJ 31,311 ц ,919 29,335 31,17 б 3i,891 77,596 So,656 50,18 ь бо,711 72,936 80,503 63,3 С9 Q4,9S1 65,70]Мi ыот Еврl орвев g,/ 122.660 65,152 111,828 120, Э42 155,669 169,930 455,699 516,606 546,672 621,760 627,656 631,S бЭ 63 т, ба9 6Э4,039 ,оt дегв � / _4,,�RQ ? 2 � � .ZZ.� . � 0� 4.v � � .1 � � . � .$� � � 3. � . � .4 3 �4 � 4i,i � � � 3.a44i �

rCLL 170, т1! 175, Эб0 201,496 2о9, боб 247, оо1 ц 9,18 ь 541,044 617,073 659, ь04 7ь9, оц 769,122 776,199 7l т,2] а 7� .717

е,/ Тде и рl отеев аке ele ввtfted асеогд{оц to caeegorie в вnд вtвеив, аод iaelude t и рок. гу and ев. иаl wrksr в.� / Clasieal vorkee в,� J 8и i- вtilled вод иывtill ед vоеlсесв.� / Croveh ot sploy вent i ы t бi � еаее{orr (pu Ы ie eorporaeioe в, uдiver вieie в, тевевгеЬ Lu вtitutioo в, ete.) r в�

аs аеевгаеед in еЬа pesiod Ь� t ые oatio ывliaation о[ agгiculeural l аыдв. .� J Ргi есi рвl в, t евсЬs тв аед ot6ee едиевtl оы воrk еев.

Воитееs Ceneral bвnk of Ce � 1on.

т, л1о :.° е: своббооиытгс па0остг гааоегтt Ов диабп t0 ыгааплтсаа, wл0- ц(hrewe ри сое реl евв7

1970 H7S .14-16 Н 77 lf _ 1!7! -_ 1вb _1! ц 1lat 1! б] а/ 1! М е// в 2 ое / в i е[ Lв 7 ot Ч i et / в 7 et ы i at бв 3 et 4 S ае b i ее 4 i в! 4 i в[!� fiPL !Уь feor 1� ь !г_OL � i feP[_ !ffi а fRL 1$а f� ! К4 fi4L � s � _ l� г. fi � � а � L i ь SL

ое

ц гi еоl сигв j/ ],n: : е.] 7,n6 ]о.ь е,и! :l. о 1о.бм 7о.7 12,77: 7os 1], н2 нл 17.1s1 :z6 :1 л» :r.7 : ь,l б� я. е 7o,us :7.1 7 а, иб :,.0М[eie{ 97 0.7 470 � . а 87! к. з S!7 7.7 Я к 1.1 !17 1.! 1.2H к.0 1,51 � 2.0 к, к]1 к.б к/1 р! к.7 7,1 за к. зwвnt вee.eis б :.1l7 16.7 :, цб : о.1 s,ao :ол е, о:] у.1 а, оl4 ю. о l.4 ы 1l.t 11, аа 17.7 u,w t6.: и, б01 14.7 u.7s7 77.7 t0.l и и. вceueraecie. 1и s.e 1, ои й.о 1,164 ь.: 1,17] ].] 1,lcs й./ 7, да 6.s 7.7s2 es 7, ао1 бл 7,ls! /. б l, а07 /.7 и ,1 аб а.7Ч п [ и в бл1! 4а.7 и.: б7 и .! 1:. аь Ч .s и. км ы. к 17. цб a:.s и. п1 as. б :7. ки в]л ц .l бк as.7 и , иб а7.] s7.7» и . о s.:70 и.:Oti1[tie в 101 0.6 l бй 0.6 171 0.6 194 0.6 к]! 0.6 ]f6 0. � 601 1.0 10а 1.0 1. ОН 1.! 1,4 ка 1.7 1,i77 1. кtr вeepore/ согвл� i н еt еев 1. аа !.s : �Отя а.1 :,: еб е.1 :.7 к] 7.! к.!! й 7.4 � .7 иь !.s s. п7 6.s 7.707 !.2 /,s ц !. к 7о.7 а !.s 1к.7и /.!со� . есlп a.e,te.. :,s]] 1l.: � ,l7s 1l.4 s, йsь 1l.s с,] з! и. о �r,ss б и. б +.us tl. о ео, еlа и.7 1 � . нт 17.! 16.os! 17.i и, иб 17.s п,и� ta.spiunetel Ч nl евв 1S2 1.2 776 l.7 4l! l.S 74 к 1.6 Ч S !.l 1,2 Ч 2.S 1.715 к.! к. К 7 7.! ],1l2 7.S � ,1 кк ].7 l. р 7 !.0воае[ ц f м lсвв 31! 7.0 б]! t.S 78 2.6 д к к. � ! Н 7.t l,t!] к.б 1.aS7 2.7 l.76t к. к 7.2Sf ].5 ],S7S 7. к 7,R! 1./риlll е вдr[sl п rвeies s11 ]л »6 7.1 !46 ]. � 1. и7 7. й 1,s16 7.7 1, ий ].] 1.l6s ].: :,] ю ].0 :. и: 7.1 а. а! 7.7 s.7u 7. �осыеa.e.tee. 1.4s! ц .1 :. кгб е.! :, ио е.е :,se: z � 7.2s7 а.1 ],! и т,л :.: и а. � 7, а ! а.! в, и/ !. в 2o,n7 !.2 ц.l а! а.7сго.. Оо... еt вргодиее 1],1 ы 1 ао.о кs, бll 1 оо.о :6,0]к 100.е ]ь, ьы 1 оо. о а , й» 1ао. о и ,7 д 1оо. о в=,: и 1оо. о »,]]7 1ао.о l:,7l6 1оо. о и:,1 п 1оо.е 1] а.1 и toe.0 �Fт i евв (Iapilele Deflaeer в)

yelerleoee у 1 оо.0 пь.: :аае иьб кп .1 кl О. к 760.0 и 1. к йа ./ ss6.4 Н к.sМ[е[ е: 100.0 117.! 111.! 15.4 1l6.7 l4S. к Ia к.f 21к.7 277.7 к11.! 701. �weraeeort.a гоо.о ::7 л а]7. о �.о.а ]1a.s зs б. � ик.1 4sa.a �n.7 s7s.7 бк4.7Cea вenetlee (00.0 156.9 l6l.! 1а7.0 247.5 ц l.2 SlO.a 677.1 76.7 !lt. б 7, у к,!б.nt евв 100.0 1H.6 I60.7 172.й tl й.7 276.5 кбк.S ]1SJ ]6L1 Ч 7.4 47l.!Otillele в 100.0 140.! l40. к 1И .1 1S1.7 к0l.S ta7.S 7aS.] 4а4.0 i!!.7 iM.7тгви раее/Ce..wte вetea в 1оо.о 17 ал и0 л и1. е 1 ее.7 :>s.s :az! 7 п. � й1о. � иа.7 s6:.tСав еп l вl lmisn 1 оо.0 и:. � 1!].: :о/. о 27о.7 кбs.7 кд .1 7s1.! ]7s. � os.7 stl.!� iы uci вl l ег7i си 100.0 121.7 110.] 1а7.7 265.1 3Sl.1 4i4.0 S!!.1 61f.4 iS6.7 7кк.!Wuвlea t вевlев� 100.0 t00.0 155.5 177. к 1f й. к tN.6 365. � ]OS.a 777./ 762.0 710.7N Ъ1ie Адвlв[ вt евеt ее 100.0 10l.S 1t4.7 l йа.а 177.5 ! д .! 20а.! 77f.7 361. к кl1.f 7Ч .0Оt бге р. е,t и . 1оо.о и:. о 1ц .! 1n.o 147.2 16l л ю4. о иа. � a:.s з4s.к 4о0. �Оееи Оовеп i е hoduet l00.0 177.7 1tl.0 к17.7 к]2.i кбl.1 71 а.0 7 д .2 йц .3 Ч 7.7 771.f

� / рееri в{ ои 1.р/ Iaeladu loruery вед [ie Ъie б.

боиееег Свеед { ава� о[ Су 1 ое.

Table 2,02: GROWTH RATES OF GDP AND ITS COMPONENTS, 1974-64 aj(go Million at Constant 1970 Factor Prices)

12A 1977 Im 1979 1980 1981 1983

Agriculture 3,732 3,847 3,894 4,299 4,532 4,622 4,766 5,097 5,131 5,508 5,624Mining 95 395 571 515 619 652 684 713 742 boo BOBManufacturing 2,197 2,263 2,371 2,357 2,541 2,659 2,681 2,820 2,955 2,979 3.H9Construction 744 649 685 619 794 960 1,066 1,034 1,013 1,023 1,023Services 6,419 7,833 7,910 8,288 8,915 9,608 10,378 11.042 11.815 12,595 13.326utilities 101 117 122 131 158 190 209 234 257 274 282Transport/Communications 1,258 1,497 1,425 1,498 1,607 1,716 1,938 1,957 2,079 2,173 2,282C arcial Services 2,533 2,886 2,928 2,999 3,267 3,551 3,949 4,034 4,275 4.502 4,835Financial Services 152 276 246 295 318 350 402 462 517 628 697Housing services 399 463 467 475 499 518 549 579 611 623 635Public Administration 517 729 760 791 854 905 959 997 1,102 1,439 1,583Other Services 1,459 1,865 1,962 2,099 2,212 2,378 2,372 2,779 2.974 2,965 2,995

Gross Domestic Product 13,187 14,987 15,431 16,078 17,401 18,501 19,575 20,706 21.756 22,644 23,986

Annual Growth Rate (2)

Agriculture fj 3.8 -2.4 1.2 10.4 5.4 2.0 3.1 6.9 2.6 5.3 2.1Mining 18.5 33.9 44.6 -9.8 20.2 5.3 4.9 4.2 4.1 7.8 1.0 allManufacturing 5.7 4.6 4.8 -0.6 7.8 4.6 0.8 5.2 4.8 0.8 11.4Construction 14.4 -8.8 5.5 -9.6 28.3 20.9 11.0 -3.0 -2.0 1.0 -services 2.8 4.8 1.0 4.7 7.6 7.8 8.0 6.4 7.0 6.6 5.3

Utilities 21.0 8.3 4.3 7.4 20.6 20.3 10.0 12.0 9.8 6.6 3.0Transport/Communications 1.4 2.4 -4.8 5.1 7.3 6.9 7.1 6.5 6.2 4.5 5.0Commercial Services 2.4 4.2 1.5 2.4 8.9 8.7 8.4 4.8 6.0 5.3 7.4Financial Services 3.8 29.6 -10.9 19.9 7.8 10.1 14.9 14.9 11.9 21.4 11.0Housing Services 3.6 1.8 0.9 1.7 5.1 3.8 6.0 5.5 5.5 2.0 2.0Public Administration 3.0 6.0 4.3 4.1 8.0 6.0 6.0 4.0 10.5 30.6 10.0Other Services 3.9 5.0 5.2 7.0 5.4 7.5 8.1 8.0 7.0 -0.3 1.0

Gross Domestic Product 4.3 2.8 3.0 4.2 8.2 6.3 5.8 5.8 5.1 5.0 5.0

#j For 1983 and 1984, components do not add to total because new constant price series for 1982-84 with base 1982 has been linkedwith old series which is in constant 1970 prices.Provisional.

S1 Includes forestry and fishing.


Table 2.03: NATIONAL PRODUCT AND EXPENDITURE, 1970-84(Re Million at Current Prices)

a970 1975 1976 1977 1978 1979 1960 1981 IM M A/ I M k/

PRODUCTGDP at Factor Cost 13.187 25,691 28,032 34,684 40,479 49,782 62,246 79,337 92.398 112.173 138,181Indirect Taxes less Subsidies 477 886 2,171 1,723 2,186 2,605 4,281 5.668 7,742 9,755 14,774GDP at Market Prices 13,664 26.577 30,203 36,407 42.665 52,387 66,527 85,005 100,140 121,928 152.955Net Factor Income from Abroad -220 -213 -282 -252 -237 -240 -432 -1,868 -2,034 -3.164 -3,359GNP at Market Prices 13.444 26,364 29,921 36,155 42,428 52,147 66,095 83,137 98,106 118,764 149,596

EPENDITUREConsumption 11,505 24,422 26,012 29,816 36,148 45,169 59,084 75,061 88,289 105,147 122,099

Public 1,623 2,480 3,021 3,118 4,043 4.798 5,685 6,310 8,210 9,607 -Private 9,882 21,942 22,991 26,698 32,105 40,371 53,399 68,751 80,079 95,540 -

Gross Fixed Capital Formation 2,359 3,699 4,595 5,035 8,521 13,246 20,845 23,279 30,360 35,356 39,700Government 6 Public Enterprises c/ 570 1,095 1,631 1,542 3,077 3,809 4,709 4,126 5,125 5,742 6,678Public Corporations g/ 451 426 588 861 2,056 2,620 7,553 8,360 )Private 1,338 2,178 2,376 2,632 3,388 6.817 8,583 10,793 ) 25.235 29,614 33,022

Change in Stocks 230 441 301 224 33 281 1,620 331 248 -210 150Exports of Goods 6 NFS 3,478 7,306 8,773 12,311 14,835 17,660 21,4!4 25,892 -27.148 32,016 44,632Imports of Goods 6 NFS 3,908 9,291 9,478 10,979 16,872 23,969 36,456 39,558 45,905 50,381 53,626

Memorandum ItemasGross National Savings J/ 1,930 1,974 4,003 6,539 6,622 7,732 9,272 11,994 15,311 20,017 34,568 1External Current Account Balance 1/ -659 -2,166 -894 1,280 -1.932 -5,795 -13,193 -11,616 -15,297 -15,129 -5,282 6

(Percent of GDP at Current Market Price)

CDP (at market prices) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0External Resources (net imports of GUFS) A/ 3.1 7.5 2.3 -3.7 4.8 12.0 22.5 16.1 18.7 15.1 5.9Total Resources Available (- total uses) 103.1 107.5 102.3 96.3 104.8 112.0 122.5 116.1 116.7 115.1 105.9

Consumption 84.2 91.9 86.1 81.9 84.7 86.2 88.8 88.3 88.2 86.2 79.8Public 11.9 9.3 10.0 8.6 9.5 9.2 8.5 7.4 8.2 7.9 -Private 72.3 82.6 76.1 73.3 75.2 77.0 80.3 60.9 80.0 78.4 -

Gross Fixed Capital Formation 17.3 13.9 15.2 13.8 20.0 23.3 31.3 27.4 30.3 29.0 26.0Goverment 6 Public Enterprises r/ 4.2 4.1 5.4 4.2 7.2 7.3 7.1 4.9 5.1 4.7 4.4Public Corporations j/ 3.3 1.6 1.9 2.4 4.8 5.0 11.3 9.8Private 9.8 8.2 7.9 7.2 7.9 13.0 12.9 12.7 ) 25.2 24.3 21.6

Change in Stocks 1.6 1.7 1.0 0.6 0.1 0.5 2.4 0.4 0.2 -0.2 0.1

Nemorandum Itema:Gross National savings s/ 14.1 7.4 13.2 17.9 15.6 14.8 13.9 14.1 15.3 16.4 22.6External Current Account Balance 1/ -4.8 -8.1 -3.0 3.5 -4.5 -11.1 -19.8 -13.7 -15.3 -12.4 -3.5

M/ Provisional.h/ Estimates../ Includes Railways, Ports, Harbor, Varehouse, Posts and Telecommunications. Since 1979, the Ports, Rarbor, and Varehouse have become

Public Corporations and are no longer included under Public Enterprises.A[ Autonomous state-owned enterprises.1/ Equals Cross Fixed Capital Formation plus Change in Stocks plus External Current Account Balance.f External transactions during 1970-77 converted to rupee values using FEEC rates.I/ Net imports of goods and non-factor services.

Sau.es: Central Bank of Ceylon.

УвЫ е 2.04: PE8CS1i'tACE ОУ ТО?AL IЯСОМ8 EECEIVED DY ЕАСН SE1iT8 Ot. 1исОнЕ ЕЕскlаа8в, 196Э, 197Э, 1э78/79, � 1т 1981/ е2

Daci еа Отb ед Rura1 Евевеев А11 I в1j, � 63 1973 В/ 1 8 81 2 Z }, � 7� 8J 197 в/79 1981/82 � � Г j, � 81 1978/ у9 1981/82 1� }� j � !/ � t �

Вi8 Ьев! 4У.78 29.90 40.60 44,75 34.2 Э 27.27 37.56 39.25 24. В7 Э1.70 25.50 26.37 99.24 29.98 39.03 41.70

8есодд 15.64 15.42 15.07 14.24 16.51 15.44 15.42 14.86 13. Э1 1Э.51 14.58 14.60 16.01 15.91 15.27 14.82

ihird 10.77 12.17 10.74 10.32 12.35 12.72 11.4 Э 10.89 11.21 11.11 11.82 11.5 Э 11.46 12.65 11.2] 10.65

l оигt Ъ 8. Э1 10.25 8.52 7.83 9.96 10.68 9.39 9.01 10.42 9.5 З 10.41 10.12 8.98 10.56 9.12 8.56

1ilth 6.64 8.68 7.20 6.52 8.11 9.16 7./5 7.40 8.71 7.99 9.17 8.76 6.82 8.75 7.29 6.9 Э

8ist б 5.1 Э 7.45 6.04 5.11 6.45 7.79 6.36 6.10 8.71 6.91 7.58 7.75 � .55 7.10 5.93 5.57

8eva дth 4.28 6.25 4.83 4.28 5.04 6.42 4.94 4.98 7. ЭЗ 6.16 7.31 6.71 4.51 5.70 4.77 4.61

Eigheh 3.16 4.75 З. бб Э.38 3.1 Э 5.18 З. ЬЬ Э.80 6.86 5.58 5.90 5.92 ' З.S Ь 4. Э8 З. ЬО 3.46

NLct Ь 2.00 3.42 2.13 2.40 2.54 3.53 2.44 2.55 5.56 4.61 5.04 5.22 2.70 Э.17 2.56 2.49

Love вC � .гi2 _L14 ... � � .�. � 1 ._1 � .4 � � s$L � 9� � sL� r. � .г� � 2 � 69 3.04 1.17 1, � 1.20 1.21 J

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 �

J Fот е vsriety of тееводе, 1973 dsta are aot directly еооратеЫ е vith 1963.

Nol е : ? оtвl в тау доt адд ир дие to тоиддiдg.

8оитео: CanCral 8ank of Свуl од, 8urvey of 8 г; Lnka' в Содвиг:и т Pioanee в, 196 Э, 1973, 1978l79 вдд 1981/ В2.

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i \i � у�Сc

р�С � I�У�С 1у�С _р�С� ��1wI� 1р�Ср�Сl у�Су�С р�С �Ч А � М � У � 1.1 � У ~ О ^ У в+ в 1^ Ч Ч � Р F+ VO 1 в ! Ф Р О V � J О У У О V О ! �

R

й й д I.Ni � й � v � А у � р ^ й 'а �К � Ю � seoв ova �в �°о = ё й .'' �ov+ � �L

1 � Ч Ч N � в у b у Р Ч Р 4 � ' О �Ч Р н �р О н 1 О Ч w' � OPNbд Ф ~' i � N 1 Ф О А � '^ Р ` 1� ' � Ч н �е О О � к Р � �Lв

�

4N.0 1 � ' Г^ О 1 О� Р ^ н � Ч ^1ил � М � � �ig � У Ч р ьМ i Ч � Ч Ф � Ч Ч У Ч � �

*

TAble 3.0;: COMPOSITION OF MONTI, 1970-84

1971 1972 1973 1976 1977 IM HU IM W1 1982 19"

0 million)

Tea 188 193 194 197 204 274 248 410 411 367 373 335 305 353 620

Rubber 74 52 44 92 111 93 105 107 130 160 157 150 112 121 130

major Coconut Vroducts 40 47 44 22 59 55 36 62 53 46 53 48 60 61Capra (4) (4) (9) (1) (-) (1) (1) (-) (1) (1) ... ) (3) (3) (3) (3)Coconut Oil (20) (23) (22) (4) (21) (27) (22) (4) (21) (33) (3) (10) (17) (18) (12)Desiccated Coconut 1a) "J) 1U) 1U) W) M) IW W W) in) LW in) LU) LW

Sub-total 302 292 282 311 374 422 397 553 603 610 576 538 465 534 111

Other lxports ki 40 36 53 98 148 136 171 IS$ 245 369 488 555 566 533 641of wbiebiPrecious & Smi-procious stones (1) (1) (2) (22) (16) (26) (31) (34) (34) (31) (40) (33) (33) (40) (24)petroleum Products _.U) (4) JU) "2) LU) in) LO) JU) JU) (DA) AM) J= -UH) _UJA) _(=

TOTAL UPOITS 342 328 335 409 522 558 568 741 848 979 1.064 1. 093 1.031 1.067 3,452

(Percent of Total IsPort Value)

Tea 55.0 58.8 57.9 48.2 39.1 49.1 43.7 55.3 48.5 37.5 33.1 30.6 29.6 33.1 42.7

lubber 21.6 15.9 13.1 22.5 21.3 16.7 18.5 14.4 15.3 16.3 14.8 13.7 10.9 11.4 L 9

Majou Coconut Products 11.7 L4l LU _LA "jJ 9.9 7.7 4.9 7.3 _U JA _Jd 5.6 _L1

Sub-total 88.3 89.0 84.2 76.0 71.6 75.6 69.9 74.6 71.2 62.3 54.2 49.1 45.1 50.1 55.8

Other Isparta _UJ 11 0 15 8 24 0 28 4 24 4 2

TOTAL MONTI 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

N=

Tea (million hS) 203 207 190 206 175 213 200 186 193 111 INS 193 181 is$ 204

Rubber (million kS) 161 129 130 128 161 137 136 136 138 128 121 133 131 123 126

major Coconut Products (million ka) rJ 123 140 ISO 59 65 114 108 39 71 73 35 56 79 91Capra (million kg) (16) (17) (44) (3) W (1) (1) (-) (1) (1) ... ) (2) (3) (4) (2)Coconut Oil (million ILI) (58) (70) (87) (IS) (22) (54) (61) (9) (30) (32) (3) (17) (34) (35) (12)Desiccated Coconut (million kg) (49) (53) (49) (38) (43) (59) (46) (30) (40) (40) (31) (37) (42) (42) (32)

A/ Provisional.Otter exports include coconut by-products. spices, minor agricultural crops, precious and semi-precious stoats, manufacturedgoods, minerals, and petroleum re-ezports.

S/ The approximate conversion ratios for outs into kilograms for major coconut products are as follows: 4.93 vato - I kg ofcopra; 13.33 outs - I kS of coconut oil; and 6.60'auto I k& of desiccated coconut.

NoW but to rounding off, couponents my not add up to tattle. Data not necessarily consistent with exports data as compiled onpayments basis (Table 3.01).

Source: Adjusted Sri Lanka Customs data as reported by the Central Dealt of Ceylon.

0

Table 3,03; INDUSTRIAL EXPORTS, 1975-84(0 million)

1925 1916 19.71 197l 19.79 im MEL 1982 1.93 At 19.M A/Food, Beverages and Tobacco 5.64 11.17 11.93 16.42 23.60 18.98 22.88 30.20 22.97 25.71

of which: Fish and Fish Products (3.13) (8.88) (9.30) (14.89) (19.75) (14.95) (17.99) (20.79) (17.89) (23.62)

Textiles and Wearing Apparel 3.49 8.24 12.70 30.66 71.18 110.45 157.05 168.27 201.36 296.21of which: Garments (3.30) (8.12) (11.81) (30.39) (70.88) (109.38) (153.68) (165.49) (197.02) (G89.25)

Essential Oil 0.96 1.24 1.29 1.63 - - - - - -

Chemical Products 1.58 1.39 1.06 1.43 3.15 4.25 3.54 10.80 4.89 7.31

Petroleum Products 50.03 60.27 63.74 59.38 123.72 .88.86 175.39 157.62 113.99 129.25of which: Naphtha (8.09) (12.47) (10.53) (9.72) (28.01) (38.71) (29.30) (20.70) (14.61) (17.21)

Bunkers and Aviation Fuel (41.74) (43.77) (42.77) (41.62) (87.56) (119.79) (104.41) (102.03) (79.11) (96.38)Fuel Oil (0.20) (4.03) (10.44) (8.04) (8.15) (30.36) (41.64) (34.89) (20.27) (15.66)

Leather, Rubber, Wood and Ceramics 3.10 3.73 1.67 4.49 8.42 15.00 14.83 22.03 21.69 27.83

Other 2.12 0.33 0.45 1.14 1.30 4.56 5.55 8.52 10.01 8.58

TOTAL MANUACTURING Ajf- f 92 .64 115.1 31.37 342.10 379.24 397." 374.91 494. 4

Natural Graphite 1.76 1.89 2.20 3.80 4.79 4.82 4.56 2.87 2.59 3.58

Netallic Ores and Iron Pyrites 0.96 0.58 - 0.76 3.36 2.89 1.57 2.45 3.01 1.75

Ilenite 1.04 1.05 0.57 1.52 0.53 0.39 0.82 0.78 0.54 1.69

Precioub and Semi-preciour Stones 25.56 30.90 28.92 34.02 31.48 40.17 32.95 32.91 39.97 24.23

TOTAL HINING AND oUARRYING 12 &q IAI A2jU 2-LU 4.14 MAa ALU 32.69

TOTAL INDUSTRIAL EXPORTS 9624 120.79 124.53 155.25 271.53 3,90.78 420.3 A 438.72 423.03 527.1A

j/ Provisional.

Bource: Central Bank of Ceylon.

т. ы ез.о4: соиновlткомоР кl� овта, 1970-84 а/са в111i од)

� 91Q � � Z� . I � T� . д� .L 11.Z.4 1� 7? 1� 1 77 1 78 � 1 � 1i81 1 8� 2 1� 8? J � � J

соевтlин coona 217.5 191.6 178.2 д� .� 321.5 Зт6.0 zoa.7 308.6 358.8 5о1. т 61j 479.2 414.4 494 �1 434 �2of r Ъieb:

l оод адд Dei дk 179.7 15а.в 1s2.e 19s.o 293.2 зs7. а 181.3 255. а 263.1 307.s э87. б 2s4.1 1п .1 :28.s 19s.aai � . 5з.4 э2.9 26. в а2.2 1 ов.3 15 о. б 75.9 1 о7. б аа.1 s7.2 5з. э :1.6 44.4 32.5 е. оF1our 43.7 з4.7 32.2 70.8 128.9 142.1 80.7 109.4 145.8 107.0 110.` 1.S Э. О 4. б 1.1aefi дed � ugar 28, б 50.0 41.3 50.2 28.6 35.2 7.6 21.4 32.9 60.1 122. .4б.9 46.6 84.4 52.5Иi1k адд вilk product. 9.2 7.9 9.5 10.9 10.5 11.6 9.6 11.7 25.4 30.8 32. 25.1 24.7 41.6 24.5Рi вЪ 11.4 12.1 13.7 В.1 7.5 6.2 3.0 2.1 2.1 12.2 17. б 3.3 15.6 14.9 24.5

ie:tile � (ineludi дg aloching) 20.8 17.4 8.0 8.6 8.9 2.8 5.8 17.3 Э4.0 98.7 104.1 121.3 104.1 115. б 117.0ОсЪегсодеиве: сооае 12.1 1э.7 1о.5 1 з.1 12.8 s.9 1о. ь z5.2 а9. в 7 в.9 107.1 я3.8 121.7 1зз.о 101. бNedleinal Е pher вaeeutieat

ргодиесе 4.9 S.7 6.8 5.6 б.б 9.8 7.0 10.5 11.7 16.2 15.7 10.0 17.1 17.3 19.8

гвтеио� кеТксоодв � �, в ,g� g, 8� i2� .3 288.7 267.8 267.0 320.6 Зsа.ь 586.4 938.8 932.s 1.039. б 923.2 940.5of rbicbs

Nheat едд вевlin 3.8 5.9 7.3 9.5 17.6 19.] 17.1 17.7 8.7 19.0 Э4.8 9В.2 85.9 99.5 104.1P.reili:.r 1 з. б 9.9 1о.5 17.з зз.2 29.5 11.7 э1.s 16.1 4з,г 81. о б:. � 2б.9 2 б.4 4з.эРеt тоl аив 9.9 а.а ь. з 46.1 1 зб.1 12 з,7 1э7. б 16 о.а 1s4.1 251.2 489.4 44 е.4 se9.7 468.5 419.9Cha вicala, ele вente адд -

еовроиnде 9.4 11.1 12.2 16.7 34.9 16. Э 10.6 16. Э 28.6 32.2 32.9 34.5 35.0 35.4 40.4D � efog, t вming аг.� eoloriag

в. с. гi.1. 1.7 1.9 2.3 1.9 з. з г. � э.1 а.5 т.7 ч. б 1 г. з 12. о ц .е 9.4 ц .sУервг and рвретbовтд 7.6 8.1 7,0 6.2 9.8 9.9 б. б 7.4 15. Э 25.6 27.6 Зб.1 32.4 29.2 25.0

киvавтl0 � тсоои8 �1. � 19� .Z 1 � ]91� 6� 3 9� 1� ,.4 � ?3i �2 � 9� 4 2 ц l.�.� � � 1� � � �о! rblcbs

� в SЕиi1 д1д8 ваt егlвl � 20.0 19.9 20.2 16.7 22.1 24.0 12.3 9. В 9.6 23. б Эб.9 27.3 26. б 50.0 28.6 � 'Тгедвротс equip вeдt 21.1 12.8 17. В 14.8 13. У 16.4 20.7 27.Э б3.3 10з.7 146.5 115.5 265.7 162.6 119.2Mae6i дerr and equip вeдt 4б,4 ]3.7 30.2 35.0 27.5 45.7 43.0 37.0 118.4 186.2 254.7 201.5 190.5 223. б 209.7

Ul1CI � 89IlI6D I КРОУТ9 � ,,,j ,j � � � � 8 �¢ ¢� , Q� ¢ � ,�¢ � J� , ¢� 4,,$ � .� � 4

iOi � I. I![PCliB 388.8 Э34.9 344.1 424.3 684. б j � ,� 354.1 721.4 440.9 � ,447.2 j,052.8 1.632.2 2 0. 15.4 1.93 б.1 � �

--------------------------------»_----------------- PdIICB1R ОР тОц L I1[PO1iS --------- .Кевогвn ди. i сеав

л, содеи. е: сооа. s5.9 s7.2 5t.e 52. а аб.9 5 о.5 36.9 42. в зе.1 34.7 29.9 26.2 ю .s 2s. б 23.2D. I дter вediat � Соод� 19.5 19.5 24.3 ЗО.О 42.2 36.0 48.2 44.4 Э8.1 40.5 45.7 50.9 51.6 47.7 50.1С. Inve п к дt Good � 27.6 21.1 21.2 15.6 10.0 11.4 13.7 11.4 21.9 24.2 24.2 22.6 27.6 ]6.5 ц .5D. l оод лдд Drink 46,2 46.2 44.4 46.0 42.8 48.0 32.7 Э5.4 28.0 21. З 18.9 13.9 8.S 11.8 10.4Е, Роод, l втсili квг вдд

Рвt тоl вив 52.3 SO.S 49.3 ЬС.9 67.5 б8. б 59.7 62.0 46.1 41.6 4б. б 41.8 39.0 37.4 35.2r. Iвporte other сь.д�ем 47.7 а9.5 5о.7 з9,1 э2.5 а1. а 4о.э эб.о sз.9 5а.4 s3.4 5а.2 ы .о б2.б 64.9

� De/! д Од СУ/ сов/ д асе адд , сЪlreloLl, oot деееееегil7 eoneieteot vith Ьеl вдса О( р. тв l дс/ д все io таЫ е З . О1.� J Psovieiod вl.

11оt в: Due to rou дdiag � ft, совродедС. ввr aot едд ир to totele.

воитсеs � djueted 8ri Lenka Сиеt ов. dets ее тероксед Ъу che Седсгаl Daдk of Cq1on.

Table 3,051 SnICTID FOOD IMPORTS, ST SOONCI OF FINANCR, 1970-84 A/

VALUE ($ million) 1974 1973 1977 1975

Commercial PuVehaffiss 50.4 26.7 18.6 49.0 88.2 137.4 83.5 108.1 40.1 56.5 51.9 48.5 39.4 22eO 3.1Aid-financed 8.2 3.8 4.1 - 29.9 - 1.1 4.6 - 0.1 - - - 4.5 It -Total 58.6 30.5 22.7 49.0 118.1 137.4 $4.9 112.7 40.1 56.6 51.9 48.5 39.4 26.5 5.1

Wheat CrainC own arcial Purchases 3.8 5.9 6,4 8.3 19.5 14.4 20.6 16.8 8.8 16.0 11.0 74.3 61.2 52.9 35.9Aid-f imanced - - - - 1.8 6.2 - - - - 34.3 33.9 27.0 44.7S/ 63.9Total 3.8 5.9 6.4 8.3 21.3 20.6 20.6 16.8 8.8 16.0 45.3 108.2 $8.2 27.6 99.8

FlourCommercial Patch&@@$ 19.7 20.0 13.5 56.6 129,0 98.0 57.7 56.9 78.5 72.0 103.7 - - 1.4 -Aid-financed 17.7 13.2 20.9 14.9 18.2 48.0 33.8 41.9 54.0 32.5 3.4 - - 3.6 Al 0.1Total 37.4 33.2 34.4 71.5 147.2 146.0 91.5 98.8 132.5 104.8 107.1 - - 5.0 0.1

SuasrCc mme rcial purchases 25.4 37.0 39.9 51.0 20.1 33.7 14.1 22.2 37.3 59.4 116.7 106.4 2.3 42.3 17.9Aid-financed - 1.5 - - - 4.5 0.9 0.6 0.3 0.1 - - - 0.05 A/ -Total 75.4 38.5 39.9 51.0 20ol 38.2 15.0 22.8 37.6 59.5 116.7 106.4 2.3 42.35 17.9

nmOn mms rcial Purchases 99.3 89.6 78.4 164.9 256.8 283.5 176.2 204.0 164.7 203.9 283.3 229.2 102.9 118.6 58.9Aid-financed 25.9 18.5 25.0 14.9 49.9 58.7 35.8 47.1 54.3 33.0 37.7 33.9 27.0 52.9 64.0Total 125.2 108.1 103.4 179.8 306.7 342.2 212.0 251.1 219.0 236.9 321.0 263.1 129.9 171.5 122.9

- ------ - ---- - - -- - - -- ----------------- - -- ----------- - - -------- - ----

VOLM ('000 tons)

AinCommercial Purchase@ 443 287 207 344 255 457 416 498 160 211 190 157 161 104 26Aid-financed 91 52 59 - 77 - 3 28 - I - - - 20Total 534 339 266 3" 332 457 419 526 160 212 190 157 161 124 26

Vh"t GrainCommercial ]Purchases 55 93 92 83 91 65 130 115 64 112 63 374 352 310 220Aid-financed - - - - 9 28 - - - - 164 170 170 269 S/ 351Total 55 93 92 93 100 93 130 115 84 112 227 544 522 579 5n

11ULCommercial Purchases 172 164 84 261 380 261 224 237 338 323 353 - - 5 -Aid-financed 205 159 243 110 68 201 157 279 268 143 a - - 17.4/ 11Total 377 323 327 371 448 462 381 516 606 466 361 - - 22 11

19WCo mme rcial Purchases 7." 276 217 194 43 48 45 94 165 245 200 168 11 170.0 96Aid-financed - 12 - - - 14 2 2 1 - - - - 0.2 j/ -Total 244 288 217 194 43 62 47 96 166 245 200 168 11 170.2 95

#j Based on information supplied to the Ministry of Finance and Planning by the sain food importing agencies and.therefore, not necessarily consistent with Table 3.04, which is based an Customs data.

k/ Includes emergency relief assistance, 4,247 XT valued at UB$0.9 million.S1 Includes emergency food aid, 20,298 XT valued at UG$3.5 million.jL/ Includes emergency relief assistance, 250 HT valued at US$0.05 million.jf/ Includes emergency relief assistance. 200 HT valued at U840.05 million.

Sovircei Ministry of Finance and Planning.

Table 3.06; IMPORTS OF SELECTED CONSUMEP AND CAPITAL GOODS, 1976-84

116 1971 198 0 1 1981 1982 1 19

Transport Eauipment

Motor Cars, etc. 2,297 2,576 7,149 10,248 6,214 5,029 4,539 16,548 16,132Lorries, Van@ 275 1,200 3,003 4,671 10,714 6,420 10,907 11,545 9,073Buees 141 410 747 2,804 2,836 2,278 2,845 3,109 2,842Tractors (including agricultural) 305 1,251 8,134 3,555 4,822 1,981 2,104 3,469 3,682Motorcycles, Auto-cycles and Cycles

fitted with auxiliary motor 306 708 8,133 18,085 50,769 11,212 8,711 18,359 18,636Cycles not motorized 91 612 12,351 33,206 289,863 48,007 45,494 23,636 10.526Ships, Boats and Other Vessels 8 242 16 30 31,433 289 52 227 562

Machinery and Mechanical Appliances

Steam and Other Vapor Generating Boilers 8 120 185 129 42 96 101 702 100Air Conditioning and Refrigerator Equipment() Air Conditioning Machine - Complete

Portable or Fixed Window Type and Other 1,097 431 2,157 3,579 6,454 3,716 3,682 6,926 '19,571(ii) Refrigerators and Refrigerating Equipment

Complete 16 cu. ft. capacity and Other 621 472 2,467 3,612 7,935 8,316 8,620 13,057 9,960

------------------------- (Values in $ Million) _j]--Transport Eauivuent

Railvay Locomotives, Wagons and Coaches 3.4 4.9 6.4 30.2 18.2 6.3 21.5 4.7 2.4Motor Cars, etc. 1.0 6.4 62.6 43.5 32.6 16.9 14.1 16.2 14.5Lorries, Van. 7.8 10.7 28.5 32.2 57.3 '43.1 34.8 43.7 43.6Buses 2.2 3.0 9.3 21.3 30.8 18.0 24.7 26.1 20.3Tractors 0.9 4.4 21.1 23.5 22.4 6.0 4.1 9.0 7.5Liftih, Handling and Loading Equipment 1.0 1.5 4.3 10.8 n.a. 16.3 17.6 20.1 9.1Motorcycles, Cycles, Carriages, etc. 0.9 1.2 .6.6 13.4 38.0 13.0 8.4 7.2 12.2

Machinerv and Mechanical Appliances

Boilers and Engines, other than InternalCombustion Piston Engines 0.2 0.2 6.7 5.2 2.5 7.2 2.0 9.5 1.6

Air Conditioning and Refrigeration Equipment 2.0 1.0 3.4 6.3 9.4 7.7 8.3 11.8 5.4Hand Tools and Implements 1.8 1.4 6.0 6.6 7.9 3.6 4.3 5.7 6.3Excavating, Levelling.and Turfing Equipment 2.8 5.9 5.9 10.5 24.6 18.2 17.4 16.8 15.0Agricultural snd Horticultural Machinery - Other 1.7 1.3 2.5 10.0 8.8 2.6 1.3 1.0 0.9Communications Equipment 5.1 2.0 5.1 14.6 n.s. 14.7 11.4 16.4 21.6Electrical Machinery and Equipment (includingaccessories) 9.0 8.2 21.9 31.2 n.S. 28.3 26.0 35.4 26.6

A/ The exchange rates used for 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983 and 1984 were US$1.00 - Re 8.46, Rn 9.15,Re 15.61, Rs 15.57, Rs. 16.53, R. 19.24, Rs 20.81. Rs 23.53 and Re 25.44, respectively.

n.a. - not available.

Sources: Sri Lanka Customs and Ministry of Plan Implementation except 1980 data which are Bank staff estimatesbased on Customs data.

Table 3.07: INTERNATIOKAL LIQUIDITY, 1970-84(m million)

End of Period1211 1971 192 121 1974 1975 1.. 1=2 191 179. 1i 8 . III 19.11 1981

Gross Official Reserves j] 43 50 60 86 57 58 92 293 398 517 246 337 352 309 543

Net International Reserves -108 -69 -48 -11 -68 -124 -67 116 210 258 38 5 -22 -21 289

IMF Position

Use of IMF Credit 79 78 81 89 125 146 156 206 242 309 269 404 377 347 335

of which:Compensatory Dravings 39 21 23 46 54 42 47 30 21 21 10 29 71 40 33Oil Facility Dravings - - - - 42 76 90 93 87 63 37 12 1 - -Extended Facility - - - - - - - - - 105 140 303 287 269 264Credit Tranche Dravings 29 42 40 21 6 4 - 59 107 97 68 60 18 - -Other - - - - - - - - - - - - - 32 33Buffer 8tock - - - - - - - - - - - - - 6 5

Trust Fund Loans Outstanding - - - - - - - - 53 93 122 111 106 98 113

A/ Excluding international reserves held by comercial banks.

Bour-c: INF, International Financial Statistics.

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1t в12 Lова - - - � .2 ^ ' - - - - _ - - - - - - ' - ' д.2Огвее - - - - 1.1 - - - - ).7 - - -0.7 - - - - 1.l - ' д.4

�вр. в и. в s.o s.o s.o s.o s.o е. о и . б - и.1 и .0 ц.] (s. ь 1 ь. е 2 я.1 u.s 16.1 ц.4 :4.7 - и . � в1лствее � - - - - o.s 0.1 - - о. б - 1.1 о. е 2.: 1s.s и . е 11.7 1.6 : б. е 11.6 11.7 !/.:

м еЬ. гl. еав w.. - - - - - - - - - - 6.1 1.n 9 л :а.11/ и . ь 1s.: п .б - - - s3sсгвеt - - - - - - - - - - 4.l 2.6 2.! l,5 6 3 19.9 4./ 20.! 30.2 10.5 l7.!

bery сгвее - - - - - - - - - - - l.1 � .2 б. б [. ь i.6 /.! 7.t 5.1 Ч J s/ Z

ы. д. в егвое - - - - - - 1. ь о. е :.s б.е 1:.4 1о.1 и.9 и .оу 16.о� и ./ � 17./ у� ::.1 у :ь.7 W 12.7 у 1l4.: �М еt аегl вед Lове - - - - - - - ' - - - - - - 16.1 - - - - ' 1/.1

теl евл [( о[до. ьо,о 1о.0 1о. о е.ь б. о 1о. ь 1:. а ь.4 - 1. ь 7.2 - - - - - - - - - _ ц,2Оевдt - - - 2.4 2.S 2.4 - ' - - 7. б � .9 S.6 4.S 31.7 j/ - - - ' - U.6

oeleed бевеи и. в 7.s 7. ь - - s.o - - - - е.о - - - 1:. о 14.о s.o - - - - s/.!Lевв(n 46 ои 4.s 7.6 11. е 17.s 14.0 - 1s.4 �о. о s л : ь.s :2. о 1ол - 1s.4 l7.0 гs. о 1 е.2 1:. ь за и . о 1з:./сгвае �

IlL 66t1 11) - - - ' - 1.1 l.6 l.! 1.1 1.2 4.! S.S S.0 S.! S. ь 7.[ 6.! 6.2 5. � 7.0 67.7

аЕС ен ое - - - - ' 1.1 � - - 7.1 S.2 0.6 6.9 4.1 2.S 1.6 б.) 6.7 - - 44.i

1DJ tл во - - - - - - - - - 15.0 - ' - - - - - - - - 15.001 Огеар 1/ Сги t = _ � � ` � ,.i � ьI .JsZ s6 � е� ._L.S 1Zь4 � Sa � _LE � а.! � LS .`_ _ � . � � � jaL

тта , 42.: �т. а м .7 so.7 66.1 16. о ы .1 ::.2 ы .1 и9. о 1:6.1 us.: 1оо.1 : оs. ь я2. ь 1s4.7 1».1 1 ы .s п:.7 19 о. � :,1s2.o

{/ l� еlидгв 01,0, 2.0, 7.1, S.2 вnд /.2 вllllou cle вstHed ве proJeet в1д iв LDIe 7.11 {а l9l0, l9ll, I912, 19t1 вид l9ad, гг� р агi вгl7.}f [ втlади 612.2 вlllioe el вni[ied и proj вet и д ie ТвЫ е 1.11.� / Lotire ввоиеt е1вni[( ед вв preJree вLд i в ТвЫ в 1.11.� / [ веlидм 612. б вillieo ( ОМ 26 в[111oa) иввд !от tвpost о[ l оеовоtl ввв иодег 1l76 lева о[ DM ]1 � (lliee, вед el вniHrd и projeee � id i в ТвЫ е 1.11.� / [ оеlидв the Ie11ov[ е[ [ гвеb г г:) двы reli в[ вгвеt в ot 61.6, 1.1, l. б, 0.66, 1.29 вед l.24 вi ц i оо ia 1979, 1960, 1161, 1962, 19 Ф вед I9M, твq гееiвеl г i

(ii) дтои{Ье н 1( в[ { гвое et твn 6S0 dllioo (62.76 в(I1( ее) ie 1962; вод(!!!) вввг̀ вов7 гв1l в[ ви i вевае� [ евеt е[ Теа 600 � !11[ оо (62,5 � illioe) ie 19 � .

j/ /[l S.S вill[ еа wt о[ ttl 14 вill[ оа Loao el вaL[Led и pro � ect д д le таЫ е 1. П .j/ l ерr м го t в t Ьв вив tot вl о[ eoв odit2 еаврааееt в o017.j/ lвpost виррогt r Ы гЬ b ЬвLе[ uei[l ввд [ ее рееJвеев еlви ![i вд и ргоJвеt в! д !в ТвЫ е 1.)1.� / l вреви вев двае евеевl( вt( оа.1/ ааеlадl е{ У1! вад Оа tee бeie вl ви [веваее еов it ввоt в vЫ еЬ вгг еl ввв([! вд и ргоJвее aid.

fi Ъ1в ].10рц в 2 е( � ру а

)птn еп и п cs)

fs цaцs Ltlа 1.9� ! 134 � 134L 194.4 19,б3 1р19 1411 1312 1911 L91! 1ft.f 131 � 13I1 1!Z! 1l14 13l.4 13l1 134t 1!!! 1!!!

Свевдв Lлве - - - - - - - - - - - - - - - - - - - -

DlPMtII 1А вд - - - - - - ' - - - ' - ' - - - - - - -

rнвс. м .. - в. о - s.s ss - ].s - ].:3 s.4 и s.a {/ s. яи s.p � s.s � / ь.s4 {/ s.ee д 3.73 д .3.7s и - г.s vсгг:. о[ 1� .о ]. о ]. о ]. о ]. о :.3 тs - - г.о - - o.7s - o.7s o.7s - o.7s - о.73 o.7sгоа1. 1� .в э. о - 3. о - 3. о - s.o - s.o - - s.o � 3. о 3. о 3. о - 3. о - - -I св17 Iдво - - - 4.5 - - - - - - - - - - - - - - . ..

Jвр{о Lове 3.S S.5 S.2S S.2S S.2S S.0 4.75 Q/ - 4.S 4.0 � .0 ].7 ].S ].0 2.15 2.75 2.75 2.75 - ].2Sа

RгсЪвгl водг Lово - - - - - - - - - - 1.3 2.S 2.5 2.5 2.S 2.5 2.5 - - - � '

Drit вerl вod Lовп - - - � - - - - - - - - - - 2.S2S � / - - - - -

Оо{t вд [io{ дов Lo.n - - - - - - - - - - - - - - - - - - - -

Овit вд l евеев Lово 2.S {/ ].S - - ].0 � / - - - - ].0 � / - - - э.0 д/ ].0 � / э.0 - - - -

lгL аео) :.s {/ 2.3 {/ 2.3 g/ ]. о OJ ]. о 0/ - :. о з. о 0/ ]. о ]. о 0/ ]. о � / ]. о � / - ]. о � / э. о � / ]. о � / ]. о � / э. о � / ]. о � / э. о � /

[DA l д во - - . . . . - - � 0. i 5 t/ - - - - - - - - - -

{/ hpnuote wi{ Ьt ед � и гв{ в о[ tba ietesut гвt Ч о[ tbe public вед ргi н t г еоврасгоЧ о[ l овог .{1/ { вt в о[ iat вeut durle{ { гвев рвеl од '. � .131.у/ ц ео о[ iobre п durle{ { н ее регi од i в 1i.4/ t вt в о[ iвt п и [ дигlд; { л сг рп i од ( г t2.f/ !L � !0 [ оод вц i и веев ц вl еп l оев[ еиггвоеi ев.j/ t геп i ев еЬвг{ г.

t Table 3.18

#ge 3 91 4 page@

Guck PERIOD

Country m m m m

Canada Lcan 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0

Deumiärk Loan 7.0 - 7.0 - 10.0 - - -

Yrågeg Laga 0.5 0,3 2,0 - 1.75 kl :j5 l/ 3.23 3.23 &1 3.75 3.75 4,60 5,25 &1 5.25 &1 5.23 kl - 5.23 11

gruay Löse 7.0 7.0 7.0 7.0 5.0 8.0 - - 10.0 - - 10.0 - 10.0 10.0 - 10.0 10.0 10.0

låd la 1440 1.0 1.0 - 2.0 - 2.0 3.0 - - 3.0 1.0 3.0 3.0 2.5

Italy Lata - - 2.0

Japan 1,44D 2.0 2.0 2.0 4.0 3.0 7.0 7.0 7.0 7,0 7.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 7.0

N*tberlczdw Lote - - - - - 8.0 8.0 8.0 8.0 8.0 8.0 8.0

avitaerland Lcan - - - 6,3 11 -

United Zte~ Loan 3.0 3.0 3.0 3.0 3.0 3.0 7.0 7.0 8,0

united state& 144a 5.0 - - 10.0 - - 10.0 10.0 10.0 10.0 -

Loan(FI, 480) 2,0 2.0 2.0 - 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0

IDA L<m* - - - - 10.0 - -

Repregente velghted &Vera&@ of the public and privata Oceponente of lom.med tootnott l/, påt# I of thlm table.

т.ь31 � .1 оРц е 4 о! 4 рвр в

L6PAYMIMi PLe10D А� тСУ CLlC6 Ptt10D [ Уы гд

f4цiils а� .l д i.i42 1344 3.44i. i244 i.i42 1.4L4. Jil1 i.4Zs^ i.@i� . i.4L4 1311 :.4.Z4 3i.LZ 3.4L4 3922 14l9. :%41 19l2 i%41 1lQS.Свм дв еоао 40.0 10.0 40.0 40.0 40.0 40,0 40.0 40,0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 - - - ^ -

Оеа.. гь Loan - - - - le.o - 1е.о - - - - - - - - - - - - -re..e. ео.. - 4. о - е.о е.о - 1 з. а и - 16.оv 1s.s 1J u.s е/ 14.s v 14. ое/ 1s.o v и .4 и 1s.o 1l 1s.o е/ и , ое/ - ....с. � .. � ив. 1]. о и . о 1 е. о 1е. о 2:. о ::, о - - 7о. о - - 4о.о - 4о, о 4о. о - 4о.о - 4 о. о ....Iodi в еово ].0 - 9.0 - - - 10.0 - 11,0 - - 12.5 14.5 12,5 11.5 - 13.5 - - -

IN1r Loaa - - - 12.0 - - - - - - - - ' - - - - - - - -

пр. е 1� . о s.o s.o ь.о и . о и . о и .о 17. о - 1 е.о 1 е.о 1 е. о : о.о 2о.0 1 о.о 1 о. о го. о : о. о :о.о - ....Nеt Ьвгl вадв и,. - - - - - - - - - - 1:, о я:. о ::. о ::. о ::. о : т. о s:.o - - -er[ енлв. а 1� .. - - - - - - - - - - - - - - e.s а/ - - - - -

То.t евасl оеа.. еово ::. о 1:. о ::. о ::. о ::. о 1 е. о 1е.о - 1 е. о 1е.о - - - - - - - - - -и.l седае. сее 1а, о :о. о :о.о - - зо. о - - - - зо. о - - - зо.о зо.о зо. о - - - -

Loao(РЬ 4е0') ь/ 19.0 :/ 19.0 s/ 19.0 :/ 19.0 s,/ - ]0.0 з0.0 70.0 з0.0 з0.0 ]0.0 - 70,0 70.0 ]0.0 з0.0 з0.0 70.0 е.в.

1СА Laao - - - - - - - - - 70.0 - - - - - - - - - -

А/ Ч РгвЧ оt в wi еЬсвд аv вгц в о[ еье н рвуsвее рггi одг [ ег риьli е � од peiwt в си репго и of l евев.а/ еи [ооеооее =/. рц а 7 о[ сЪt в евЫ е.S/ ОВ8100,000 Ч еь дигi ее еЬв [iue eьrtt Тввгв вад еьв l вl впев ie 16 вq ивl io ц вll вго ев.

/ еигев� 4[ вговl l и оигs ев Dврвгевеаt.

Table 3,11: OVERALL AID PIPELINE, 1983-85(us$ million)

MahaweliNon-Mahaweli (Accelerated) Relief Of which:

Pgoiect Proiect Conaditl LOA AelistARSC JgW Non-Mahaweli

1983Undisbureed Balance 12/31/62 890.6 506.5 132.4 36.8 - 1,566.3 1,059.8Now Commitments 1983 198.0 67.6 37,0 52,0 12,0 366.6 299.0Disbursements from Past Commitments 144.4 138.9 57.9 36.8 - 378.0 239.1Disbursements from New Commitments 21.8 24.0 6.6 13.8 12,0 78.4 54.4Total Disbursements 1983 166.2 162.9 64.7 50.6 12.0 456.4 293.5

ImUndisbursed Balance 12/31/83 922.4 411.2 104.7 38.2 - 1,476.5 1,065.3Now Commitments 1984 135.3 191.3 78.4 69.3 - 474.3 263.0Disbursements from Past Commitments 199.7 148.4 65.4 35.9 - 449.4 301.0Disbursements from Nov Commitments 19.5 36.5 7.0 34.9 - 97.9 61.4Total Disbursements 1984 219.2 184.9 72.4 70.8 - 547.3 362.4

ImUndiabursed Balance 12/31/84 835.3 IL/ 417.6 110.7 34.4 JL/ - 1,398.0 s-j 980.4 rjNew Commitments 1985 408.2 142.6 36.9 41.4 - 629.1 486.5Diebt-reements from Past Co itments 212.3 144.6 73.0 26.6 - 456.5 311.9Disbursements from Now Commitments 38.4 29.7 21.2 41.4 - 130.7 101.0Total Disbursements 1985 250.7 174.3 94.2 68.0 - 587.2 412.9 Ir

1986Undisbursed Balance 12/31/85 992.8 385.9 53.4 7.8 il/ - 1,439.9 1,054.0

IL/ The following undisbursed balances were treated as lapsed on December 31, 1984:

$ million

IDA Tank Modernization Project 0.70France Purchase of locomotives 0.21FRO Gas turbines 0.17FRO Embilipitiya paper mill expansion 0.32Denmark Colombo Dockyard 0.10USAID Rice research 0.065USAID Paddy storage and processing 0.065USSR Iron and steel Stage 17 0.42India Urea Fertilizer Project 1.07ADB Ures Project (supplementary loan) Dim

Total 3.17

The US Pl, 480 Loan of US$25.0 million signed on December 12, 1983, was quantity-wise fully utilized by financing the import ofcomplete quantity of wheat (150,000 MT) valued at $22.69 million. The excess loan amount of $2.31 million is therefore treatedan lapsed.A total of $5.5 million was cancelled an per footnotes (a) and W above.Represents the undisbursed balance under the Canadian Food Aid Grant of C$30 million signed on June 29, 1984.

Source: External Resources Department.

-86-

Table 4.01: EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1984DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

('000 US$)

DE BT 0 UT S TANDING : IN ARREAR STYPE OF CREDITOR ----------------------------------- :----------------------

CREDITOR COUNTRY DISBURSED :UNDISBURSED: TOTAL : PRINCIPAL : INTEREST

SUPPLIERS CREDITSAUSTRIA 213 - 213 - -CZECHOSLOVAKIA 580 - 580 - -FRANCE 2.656 52 2.708 - -GERMAN DEM. REP. 5 12 17 - -HONG KONG 83 - 83 - -ITALY 50 - 50 - -JAPAN 2.839 54.553 57.392 - -ROMANIA 15.813 - 15.813 - -SWITZERLAND 296 - 296 - -UNITED KINGDOM 4.187 7 4.194 -UNITED STATES 294 - 294 -USSR 3 3 6 -YUGOSLAVIA 146 84 230 -

TOTAL SUPPLIERS CREDITS 27.165 54.711 81.876 -

FINANCIAL INSTITUTIONSARGENTINA 13.691 30.294 43.985 -AUSTRALIA 1.102 - 1.102 - -AUSTRIA 1.091 - 1.091 - -CANADA 5.728 - 5.728 - -FRANCE 18.366 6.368 24.734 -HONG KONG 10.619 - 10.619 -JAPAN 11.946 - 11.946 -KOREA. REP. OF 30.373 - 20.373 -SWEDEN 22.450 17.397 39.647 -SWITZERLAND 4.074 1.725 5.799 -UNITED KINGDOM 47.206 29.994 77.200 -UNITED STATES 119.292 - 119.292 -MULTIPLE LENDERS 311.869 - 311.869 -

TOTAL FINANCIAL INSTITUTIONS 597.807 85.778 683.585 -

MULTILATERAL LOANSASIAN DEV. BANK 145.789 188.376 334.165 -IBRO 54.794- 22.901 77.695 -IDA 311.404 324.321 635.725 -1MF TRUST FUND 83.022 - 83.022 - -INTL FUND ARG(IFAD) 12.952 35.219 48.171 - -OPEC SPECIAL FUND 29.859 9.064 38.923 - -

TOTAL MULTILATERAL LOANS 637.820 579.881 1.217.701 - -

BILATERAL LOANSCANADA 120.976 17.635 146.611 -CHINA 24,765 17.885 42.650 -DENMARK 6.468 57 6.525 - -FRANCE 24.602 23.100 47.702 -GERMAN DEM. REP. 268 17 285 - -GERMANY. FED.REP- OF 143.127 94.461 237.588 -HUNGARY 80 - 80 -INDIA 19.574 9.460 29.034 - -IRAO 4.571 - 4.571 - -JAPAN 268.649 106.084 374.733 -KUWAIT 17.867 42.239 60.106 -LIBYA 51 - 51 -NETHERLANDS 58.842 2.858 61.700 -SAUDI ARABIA 10.447 59.902 70.349 -SWITZERLAND 4.074 1.725 5.799 - -UNITED ARAB EMIRATES 9.465 2.194 11.659 - -UNITED STATES 430.288 162.137 592.425 - -USSR 5.407 57.651 63.058 - -

TOTAL BILATERAL LOANS 1.157.521 597.405 1.754.926 -

TOTAL EXTERNAL PUBLIC DEBT 2.420.313 1.317.775 3.738.088 -

NOTES: (1) ONLY DEBTS WITh AN ORIGINAL OR EXTENDED MATURITY OF OVER ONE YEAR ARE INCLUDED IN THIS TABLE.(2) DEBT OUTSTANDING INCLUDES PRINCIPAL IN ARREARS BUT EXCLUDES INTEREST IN ARREARS.(3) THE FOLLOWING UNCOMMITTED PARTS OF FRAME AGREEMENTS AND STANDBYS ARE NOT INCLUDED IN THIS TABLE.

BILAIERAL LOANSCHINA 20.025GERMAN DEN. REP. 10.000

TOTAL 30.025

TOTAL UNCOMMITTED FRAME AGREEMENTS AND STANDBYS 30.025

Source: World Bank.

Table 4.02: SERVICE PAYMENTS, COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBTPROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1984

DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS('000 US$)

TOTALYEAR DEBT OUTSTANDING AT TRANSACTI 0 NS DURING PERI 0 0D OTHER CHANGES

: BEGINNING OF PERIOD :

: DISBURSED ! INCLUDING COMMIT- DISBURSE: S E R V I C E P A Y M E NT S CANCEL- ADJUST-: ONLY :UNDISBURSED: MENTS MENTS :-------------------:-----------: LATIONS : MENT *

PRINCIPAL INTEREST TOTAL: (1) (2) (3) (4) (5) (6) (7) (8) (9)

1980 1,110,924 1,763,196 736,318 286,423 50,807 33,365 84,172 24.630 -6,8241981 1,344,228 2,417.253 872.027 380,093 43,826 49,590 93.416 8,070 -135,4351982 1,610,168 3,101,949 636,418 465,979 73,270 69.056 142,326 6.418 -108,238193 1,953,909 3,550,441 310.229 387,074 74,707 92,170 166,877 925 -107,3961984 2,214,032 3,677,642 340,156 410,223 98,925 102.622 201,547 2,805 -177,9841985 2,420,313 3,738,084

* * * * * * THE FOLLOWING FIGURES ARE PROJECTED * * * * * *

1985 2,420,313 3,738,084 - 412,095 133,402 91.877 225.279 - 171986 2,699,017 3,604,699 - 349,510 161,464 93,046 254,510 - -41987 2,887,056 3,443.231 - 244,140 202,470 88.463 290,933 - -1988 2.928,724 3,240,761 - 158,519 201,735 80,418 282,153 - -61989 2,885,499 3,039,020 - 83,563 183,850 70,791 254,641 - -11990 2,785,208 2,855,169 - 39.335 139,587 62,010 201,597 - -31991 2,684,954 2,715,579 - 19,156 114,652 57,454 172,106 - -11992 2,589,460 2,600,926 * 9.017 117,444 53,265 170,709 - -111993 2.481.021 2.483,471 - 2,172 115,165 49,606 164,771 - 41994 2,368,033 2,368,310 - 277 ii.909 46,568 165,477 - -61995 2,249,395 2,249.395 - - 103,791 43,208 146,999 - -51996 2,145,599 2,145,599 - - 102,087 40,202 142.289 - -71997 2,043,505 2,043,505 - - 96,701 37,240 133,941 - -21998 1,946,802 1,946,802 - - 96.799 34,609 131.408 - -71999 1,849,996 1,849,996 - - 96,961 31,987 128,948 - 82000 1.753,043 1,753,043 - - 96,700 29,372 126.072 - -132001 1.656.330 1,656,330 - - 95,095 26,883 121,978 - 82002 1,561,243 1.,61,243 - * 93,701 24,522 118,223 - -42003 1.467,538 1,467,538 - - 89,708 22,419 112,127 - -52004 1,77.825 1,377,825 - * 86,852 20,563 107,415 - -

* THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNDISBURSED FROM ONEYEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER OF DEBTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

Source: World Bank.

твы . s.o1 � еоюwто� �и0сетАпт Огыип аеб, 197 о/ п - т а1( бв Mi7l(ooi

1lLO/ц 1ц ,1Lц L41,i Lp2y, 1рц Lp1,4 J.l1Z Ll2,4 ), ц.t I!!II 19ц 1! � !, 19 е7 19 ы 1 �es1 иу � е бадр е

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� / Iоеl в� iц RtO в вв [ollw вs j �] � ,�1 1f11/lS 1}1 � . 1 � 1! 1l11 1!2! 1l1i 1lLlи � : и �s s: ы ss 1б� ) 1l р го. rieA ввеогl оt в (в) 1ое1о1. в [ вгt еl вг{о1 te б1v и Ч бееоиаt в.� / [ � duJu а Он дltnro ев Iood {t и рв [ гов 1!1! овr вгдв ( ввв f вЫ в 5.01).1) Ов1ое овр вlit аs в оа ruorrue вееи вsi и [lt вl ваеи Авво \ д а Nla вtod ( ог lев в еи и h ггвl fro� своl евl го t м � од вl ев л ги .t/ О� вгвtl ц � .[iel Ч ef Тгвli ку Lвtп Ргlви .

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jqц f{ к Cootr вl { вs! о[ Cqloe.

твы . s.a � соt еипги2 ео0опитеоее102 и и0 тwпие, 1 я�оI � 1- ду(е . l11111oe)

1f70/7l 1f71/77 J � j1 j,:j � , J � ] � jil4 ii � jsj! � :j! ) � ,{,Q ]i.01 � Ij 1ftl 1fM _ 1ftSИь1еп Iеl еве

f гевl вееи l jej( У j ц hи i вl ви t jefj � ju

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ieed п.. ге - - - - - - - - soe.o 1. ы 7.6 1.s2o.� ),as.o 1. а� .о 2,s1o.o 1,s». о 1, � » . ое. ге.. е. ее..r в - - - - - - - - ».2 1 ы .е 1 ы . о и1. о : б). о 7и . о 7п . о а 2. оIвеоео eeeplsut - - - - - - - 127.0 217.0 1ц .0 - - ' ' ' '

Сигги е тuuhn te tu0lleСогр и tl оа. 2г.о а7. б ие.1 )67.s 1>+.7 1: я.1 иб. � 1, ое1. � я2 о. � 1.se:.) 1. �ео.� 2. и ).t t.lse.7 1, � ц . о 2, �о� . а ..., s

ot в� iehs . rCyloe letrelo и Corputtoe (-) (-f i-) (-) (-) (-) (-) (S2e.0) ( Ч .О) (-) (-) (-) (-) i-) (-) (-)Свуl ее I п tqieoe Coreentloe (-) (-) (-) (l6.S) (-) (-) (-) (-) (7lS.0) (SSO. Ч (Ч ).0) (211.1) (1l1,2) Ч 21.0) (1 �000.0) U00.0)мt2t ео. гд с-> (-) снл) сбб. о) себ.о) t еь.о) г�r.1) си.и 1 н . о) 1s7.o) си .7) и� л) t:1.» (2s.e) c2s.e) t2s.e)сооегоl тги ер ге ео. гд t-) с-) с-) (-) с-) t-> с-) na.o) со.о) ин.!) (-) ац. о) (1: � .о) .... (sse.o) us � .e)оееог Гиы ia сегрег. е( е. е (ц .о) (я .б1 (ц . � ) (и .о) (1 е.7) (1).O (б).2) (1i6.!) (24я.� ) fs22.0) (669.1) (1,214.e) t), ЧS. е) ел . r... � .е.

CYп nat ггвоеl ои ее Cytoeсо.. г.,.. ее.O.. � - - - - - - ц .0 е. о 1� .о ео. о 2):.2 l еел : е7. о :) � .о �о�.о . л.2 еЧ Ч а taldd[ te 11et( ео.1е.. сев. е.. б - - - и .) 12.6 12. е 1:.6 )12.6 s1.e и)л 7ее. о ба . о soo.o soo.o soo,o 4rs.oт. � сеооt авьеt д2 - - - - - - - - - �7. о � о. о ы .о бs.o ео.о бо.о ю .о

тое.2 6)s.s 2�е.4 ees.o 1. и� . о 1, зn. з 1. о�s. з 1,61 е. е э. � е). б � .) и .2 � , � 17. е � ,en.2 i,: е: л 4,s:o.o ел. .... . л.

s. в. � вее вл ll. Ы в.

бsигевl � о. ап вl Тги еег� � вед Сеsегвl евц е( Св21 еs.

. к

sвывs.os, глгlt ц с7r еис)ruee uro мп ье� ) ес, ) я7сi п- еs � /(1 в вillloo)

U1.4L.T1 1:.i � L.t2 l �Il I9Z1 i}1f LI1L i:iL � ! 1� Z4 i:lQ 1L11 1� II 16 � 1 1 � М . 1elS...е� д{et Ч др еlsere вieue � � hев l вl еи l � �

Ae6ai вLtlo в nt е� вl Аввеев � jS, S]i jQj j(Q 1.06t 1.175 1.11] 7.17 � 7.7 ве LSg. ].Sl7 6..s7 S.6f7 7. е17 i.,7 в ! �cи tt Уа� tвi.ee � eioe :1 ь: s) ь7 ее о1 ю ае ьоо ь: ь s1 я 1, ао п7 � .в, ., в, ., в,fоеИ 1 t вп i ем 1о7 1ю и7 ) и )s � 7а us ьи 1,l е1 1, ы� » 7 roo 1, и7 . л . .... ....td вeaeloe (� 7) N9) (7!) Ч l1 ( ц 1 fl1]) (11 ь) (ll71 f1S91 (ьSр (ь� 1) !47!) tS07) е.в. � .в. � .в .tввl еЬ !7 и с7 ы г7ы с3» ! еь) и1и си ) и74) c7en иоя сlьи п7и cn» . л. .... ....rаоеl ц !1 и !гы и :) с� е) (ви a7l са ) сц и cs7sl с77) !7:) Ч s71 си ) � ... .... ....ое� .г с1е) с7:) !1ь) (16) с)я) !г� ) с77) (n) (67) (иь) (!1) (97) (еь! ал . а.в. ь в.tеоеовl е аг.i к. в 71 о 7ь: иэ s ц ns ), о7 о 7ы 1,7 о: :. оь7 :,7а� 1,>+: 7,7 и � ,717 .... .... ....ц гlеоl еоr в 4 1ггli вtlea (17=) l177) (1 ь0) (7!7) (707) (41)) (77i) (7ьо) IS671 ff10) ( ц 7) () 07 ь) (l,St7) в. в. е. в. � . в .н. ь. еие сц сы с�) с)�) гзи аы с:и а�) с7и си :) г)) �� i)sы te: � .. б. .... . л .)4виh ееигi ц ьNЫ ц cs) tя) с1 и ио) м ) ги ) с17) ая) fsu fst) ! еи ии сиЧ .. в. .... r...тг. д. си) us) !» с7) с7) с:и с) о) с17 ы !7 и !) ь) !и !7) р) !ы ) .... ..., . �в.Сев>., вl евеi оев usu t= оЧ сг� п l тьь) t ь7i) гцы аа ) с7 а ) и , цо) us)3) и , а7 к) п , а7s) u,so7) .... , � ... � л .hрl евl Тгвовl еев � Q � ,Q¢, � ,уу, � Qj � Q¢ 1�Qj; � i.3 ье 7. ь7 е ь. ц в }.317 jp � l 10.7Soh � lie Сеероги l оав 7е1 ие 3еь 77 е 77 о яы аьа :, сме 7,)) к ь,оев 7,17ь )о, ьь1 )о, ь7 к �:; � ц " � ' ц',,�в,оеь. г зя ье ь) а 7ь ьо ья s7o 7: ь 1 ье и7 1и 77 е в, в, ,,, в, � �в.Ставв WodiW L S� � .:DS. L1 i4 � I � � i}. � . А.� }ь IOi � L1L � 1 1j: if: 1а'I �е! вlie � вqei вltloe о! tfwaiet вм ви е!,

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у си еи ! 4е� Cl вutlie вeioe j/ 100 ri7 1,1б1 1,t1S 1.917 1.676 !,1l4 S. ьf ь 7,nf 11,fS7 U.77i 1 ь, Оь0 15,1lS � л . в. в. � .в .lвеег 9в1п [ вреадlt игв l гавl в) овв - - - � - - - - - - - - - о,.. .. а. b..Ч 4 г l ееЧ вев i в Dвp вite el WЧ совеес

Сагр и еl ви � / se :� - и -1 ьs � s )о1 1s7 7и -s � : и 17s !ai .... .... ....c.pte.1 ир.вдиае. ь� . е4. а1 ве »: еье 1,us 1, ь)о ) л7 е :, ы 1 :, оя] s, ць 7,s ь7 1:, а7 у )),7s7 )s,и s ц,)s7 и ,47 � :),)os :7,3ot

� / / н tootaet в � / ее 7вЫ в 3.01 ! ег tl вeвl � и гв.]/ � e � uieitio в е! fWдel вl ви оЧ . 's/ Us.ttee.e.d еовео! I{L Св ad еЬв двеи егвll евд Ьидьве. Ро г 19ь0-l1 рвгi од, еЬе 1п � t1. вr в и lоп оы :

19 е: иек ии ииJ,:,QQ � pJj � гаввд frer[ вl еевt даагвввд ,� цj уц

nвeueuliua wae.e ие ьь ь:о и ь7о ь:оbррl ви вt вq Сврlt вl

i п ввеи ве heerr 7А - 7( М - S!0 7DI еt в� гвt вд еигвl

оан l ори ве lw ц вв lS ь 22l 7tS - � S1 � ИОве7вевiti вд - - l ц 1 Ч 7 1,lSO

9/ мвев веевевtеl7, еСврl евl 6ргвдl еиr ее" Ь7 Сеееsвl И а4 е! Cy1es И П оl еlos 1еи l еве еq в7веаt ne вlpt в. fЬв Сго t еаl И дk доиwe оа ее. еве, �Кп иедt у . �� / Ч l вм еа еве еЬац в L Snuury деровit в (i.e. Тгвп.l ви а� t ot гi еЬдгвr вl в).j/ l веl иди b 701 вillies � вi ее р в reprr вet е! ер еевl Ч вева в Ьр еЬв Со еевt И оl.в... � .ее ... u.bt..� � t Сееегвl Ч вk о! Св7) ав.

lible ,06. CENTRAL GOVERNMENT BUDGET DEBT SERVICES. 1970/71-84 Ll(Is Million)

1970/71 1971/72 1973 JI& 1983 1994Budget

Zralidgas, ZILLULU P-Tisional

Domestic rjbt

Amortization 107 135 197 290 248 293 422 664 683 903 1,002 1,939 3,661 709 775Interest 267 324 399 461 561 668 822 1,083 1,339 1,864 3,143 4,190 5,354 6,261 3,793

Foreign DebtDebts bold by Sinking fund

Amortization 2 2 2 2 38 - - - - - - - - - -Interust 4 5 5 5 3 - - - -

Foreign Governments andInternational Organisations

Amortization 134 192 231 269 308 368 525 502 499 600 607 673 1,165 1,659 1,516Interest 65 84 110 114 135 172 191 285 357 413 713 915 1,270 1,734 1,568

Total foreign Debt

Amortization 136 194 233 271 346 368 525 502 499 600 607 673 1,165 1.69 11516of which., FEEC Cost (46) (69) (89) (93) (125) (136) (91) (-) (-) (-) (-) H

Interest 69 89 115 119 138 172 191 285 357 413 713 915 1,270 1,734 1,588of which: PEZC Cost (24) (32) (44) (45) (52) (64) (55)

jL/ See footnote A/ to Table 5.01 for fiscal years.

jqurce: Central Back of Ceylon.

т,l, аl е S.07 к СОУ8lN1[ ЕИТ ПNiIlRPRI868, 1970/71-64 j/(Re Иillion)

1.4i4L.T1 1411/ii 191� 13ig. 191 � . 14Z4. 3913 1. � ZR 1914 19� .Q 12� 1 19� . 19J7 19b41udбet

l ia lvav � pvt вlonal Е� cia.c � в Р говi вi оевl

А. Rвvaaue I40 169 17В Т18 Тэ2 2э7 229 292 э79 4 ТЭ 486 534 5 д!i 69 э 693

А. Reeurreat Pxpmdlture � / 118 1Т7 1э8 19] Т16 2Тб Тб4 э00 39Т SO] 600 7эТ !61 1,07 Т 1,101of � hich к

Ioter ввt, Divid вnd, Naotрвi д со covernreot (2) (2) t!) (J) (4) (5) (б) (7) (е) (10) (12) (14) (160) (16) I16)

Ot6ar Раувеосе to Covaro вeot (22) (2S) ( Тб) ( Т9) ( эТ) (э4) (э5) (45) (S]) (54) (67) (92) (1 э0) ()45) (14S)

с. Сиггеис surplua (А - е) 2Т аТ ао :1 16 11 -зs -а -19 -ео -11х -199 � -28 э -э79 -4оеD. Capital б: рвпдi сигв 47 26 47 SO l52 196 132 297 565 50S А62 780 767 4э3 364

Port. 9аrЬое. УвгвЬоивв yf1

6. lteveoue S1 54 47 S3 64 59 80 7S 79 - 2.0 0.7 - - - й

Р. llecurraot Екрепдi еихе bJ Тб Т5 ТЬ э1 э4 э5 79 45 44 - - - � - - -

б. Currene 8ьтрl ив (s - Р) 25 29 21 22 ЗО Т4 41 70 Э5 - Т.О 0.7 - - -

9. Сарi евl Lspenditure 17 19 12 В 9 10 11 1S 54 - - - - ' -

Рове впд t вlaeo вwnieatioo в

к. ае�еои. вs 105 11э 151 1sa 17в ТоТ 2ы э17 з9: 626 71з 67о 1, о74 1э, х77J. teeuere дe Pвpeaditure 13/ 107 108 12В 128 144 l62 196 211 265 ]0 э Э69 467 5S3 740 77 э .

R. Сиггвпt Вигрl ие (I - J) -2 Т - э -15 Т3 10 !б б Sl 52 89 Т59 Т4 б 711 3э4 SS4

ь. Свр1 и 1 вкреоаt с� те 7 21 29 зо аь ss а9 ав : э5 а18 2 ее з57 а77 as6 4s ь

� / Оо в савЬ Ьавi е. Рог [i еевl уеагв, � еа tootnoee в/ to Тв61 е S.O1.� / Dвеед оо СЬв reel вeeltied двt е ивед to che Саосевl eвnk Annual laporc.g/ Rерl вевд Ьу Вг! 4ok � Poct AuCЬoritr � ид Sri Lвnke Свгgо Сотрогвсi оп in 1979.

8оиеевк Седегаl � ваk ot Се� 1од.

Lpe. б.ове сои t ы тl гмеггабто roe ы c соегомтt оиа, 1 э7 о/7t- ы � /(и М1111 ов)

!р]_4L ц 1.4Z1L1.i 19]3 141i 1.р13. 19]!г. 14ц 13 ц !31! lt44. 1" л1 !!!2 1яи 1гивадр е

ha вi вieul � ^R( евв 1!гавi вi еи l

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с.� ii ве. еи. сотрое. еiее - - ч.s е.: г.4 б.s 4.7 :о.3 :1.о se.o 3s - :. о - -Мвав[ вetuelat_ б М в[ и

et вte г� scitlue Кваи[веt иеiц Соерогвtl оо - - - - - - - - - - t69.0 543.0 4 г1 J - -ft вee гl оиs MiI11ee Caepo н eios - - - - - - - - - 21.3 - - а, в. - -! еll дi а* Мае� еl вl � Сотрогвеl ее - - - - - - - - - 15.0 - 2.0 2.0 - -Су 1еп � евев евтдr вев Corpoutioe - �� б,е 7,7 s.7 - б.: - ке.б - - . 0,4 _ _weto ы l мtlt �в. та - - s4,4 бб. о еб.о еб. о 7я.: е:,7 ц . о 33. о ц ,3 4s. я п .3 в . о 7s,oСв71 оа l оегоlw в Ceepos вeios - - - - - - - S7e.0 е7.0 - - . а, в, - -г� рп Corporaeloa - - - - - - - 10s - � 1е.7 к1.= 10.0 о. в. - -Isdo.eri.1 Oa.tep..ae м. еа - - :. е 1. ь - - - - s.o - - г.9 е. о to.o 1 о. оC.I,e,I. � . - - 7.4 1.S - - 3.9 4.4 S.7 6,0 б,г 7.1 6.S 7.t 7,!ег1 lаеkв Све>t � r Corpoueiee - - - - о.3 о,3 о.ь о.1 т.о :. п 3.s 4.к 7. г 7.б 7.вet16 б� )I1.a геодв� е. n... ввелотiе7 - - - - - - O.s :. з 4. о s.6 б.s � . е 3, ь s, т s,7Oi( в i гвев Согроеаеl ее 4.2 I,1 - - 9. о 7.0 - 16.4 2].0 41.9 - ^ а.в. - - �Тп t ц � Corporвtloa - - - - - - - - 13.4 7б.б - - 37.7 - 100.0 4,ОеАвев р/ 6.2 - - - 3,1 0.3 1.7 0.6 O.i - - - в.в. - -

оt бвеl вдд7 Nвгkве; ве l овед - - - - - - Ь.О 1.4 - - - - 47.7 - -Cq1oo Coeoane Aoeбoeie7 - - 19,6 2.= - - 7.0 2. е - 0.3 t.1 27.б 4.4 - -с. гl евтоиrl. см. и - - б.о - г. ь 11. о ) б.7 )э.б 2б.о 41. е s1.e ss.o 7s.o бs. о б3. оС� оеи l Уrвавроее � овед 4. о 4.е s7. я :.s - - - за ,о es,o 4�ьл - Izs.a 174: о - 33о.огоге Свг{ о Corpoeatioo - - 1.0 O.S - 7,0 5.0 - - - - - в,в, - -etate Ец l аеетl ае Соеротаtl ов - - 18,t 4. б 4.7 7.l - - - - - - I1.0 - -ееr иа oF Се71 ое ft ввди дв 1.s :, б :, о - - - Ls 1 л 2.3 :.7 3.s 4.7 1.s г. о я.оtвеl ои l Touth еаni Ч в Соеееll - - - - - - 3.4 20.0 70.0 tS,S 3I.0 3l.0 37.0 ц .0дде[ оевl ipyrenue ыeip м. ед - - � - - - - - 1 э. о 3о. о 41.о и .s so.o so.o so.o so.or п iоавl on �1ор� .ne e.rrie. - - - - - - - - s.o ls.4 13. о 17.: 1б.о 1е.о 1е.оCeepoutir в Мвы еевавt l вгrl ев Севt вг - - - - - - - - - l.0 I.2 l.S 2.S S.1 S.lCotdea вtst Ovaed Dив$в� и Uodert вki вj в - - - - - - - - - - - - 51.6 - -евfаЬиr веr � ае о[ 1о о � в ео есви

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1911! i9ЭS 1.414 1411 191.Q 1913 1� . � .Q 1.l41 1: � I.44i 1.L44

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DQOSII' 6A76D

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{ вв( ц в Ie вeieueiee в

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! вelliti Ч for рs одиее{ во ригрош п о еигn деlр вЧ ll вЫ в ае евt вв н е{ise [гов LSO-17.OOi.f,/ Ieernп nеев [or еЬв Cq1oe f вrta{ г евеt, t бo роп 0!!i Ч edvlap 1вгR, вад еhв 1вгl ор Свгt!li ы ев риад. Thore laetleutioea r ы г

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ееигивг Сго l гвl e вsk ol Су 1еа. 1

Table 6,02: MONETARY SURVEY, 1971-84 A/(go Million, and of period)

B71 1972 1973 1974 1975 1M IM 1984

Hot Foreign Assets -376 = 28 -211 -429 38 3,625 LB-0 6.706 ILM L= LM L=Central Bank -572 -551 -250 -530 :738 432 i,517 4,408 5,362 1,602 1,049 131 480 7,475Commercial Banks 117 175 222 319 309 470 1,108 1,092 1,344 1,875 1,731 1,980 2,269 2,077

Not Domestic Assets 5.010 6.016 LM AAK JM LM 10,258 12,848 17,963 32,040 39,618 48,313 51,620 57,599Not Credit to Government 2,724 2,900 2,679 2,532 2,831 3,316 3,009 1,889 2,962 11/ 9,100 12,889 17,236 17,639 14,605Credit to Private Sector 1,760 2,167 2,165 3,239 3,404 3,985 5,785 B,812 11,082 16,208 20,763 24,934 31,345 34,979Other Credit 29 13 15 86 20 15 21 -100 142 -168 -142 14 514 26Other Assets 497 916 567 593 669 1,049 1,443 2,247 3,777 6,901 6,108 6,129 7,122 7,989

Central Bank (excluding IGuarantees) (66) (71) (81) (78) (149) (278) (681) (681) (1,462) (2,938) (1,557) (884) (948) (1,171)

Commercial Banks (429) (845) (486) (515) (520) (595) (1,165) (1,566) (2,315) (3,963) (4,251) (5,245) (6,174) (6,818)

Monetary Liabilities 3.AM 3.917 4.094 jJO4 4.712 6.250 8.635 10,803 14,957 19,709 24.28Z 30,249 36,818 43,015Honey 2,128 2,461 2,757 2,922 3,064 4,133 5,332 5,895 7,643 9,333 9,950 11,673 14.589 16,647

Currency (1,115) (1,202) (1,437) (1,539) (1.610) (2,080) (2,792) (3,015) (3,774) (4,181) (4,823) (5,988) (7,200) (8,561)Demand Deposits (1,013) (1,259) (1,320) (1,383) (1,454) (2,053) (2,540) (2,879) (3,869) (5.152) (5,127) (5,685) (7,389) (8,086)

Quasi-Money 1,251 1,456 1,337 1,582 1,648 2,117 3,303 4,908 7,314 10,376 14,337 18,576 22,229 26,368

Other Liabilities LM LM 1.302 LM 1,783 2,153 5.LW I_uM 9,713 15. SU JJaU 20pl75 22,550 24,135Central Bank (excluding

Guarantees) 456 490 522 634 708 957 ' 2,806 3,970 5,329 9,124 9,572 10,352 10,471 11,204Commercial Banks 720 1,233 780 1,101 11075 1,196 2,441 3,576 4,384 6,684 8,539 9,823 12,079 12,931

,L/ This table is not consistent with the Country Data sheet, which uses as a source the monthly bulletin of the Central Bank of Ceylon.k/ Adjusted for amounts in Suspense Account Paddy Marketing Board and/or Goods Receipts.

lource: Central Bank of Ceylon.

Table 7.01: VOLUME OF AGRICULTURAL PRODUCTION, 1/ 1970-84(Indices, 1968 - 100)

190 1 22 1973 7A U 21 12-71 1M 12M 12L 18 1983 1984 hTea 94 97 95 94 91 95 87 93 89 92 85 93 83 79 92

Rubber 107 95 94 104 89 104 106 98 104 103 89 83 83 93 95

Coconut 97 100 114 82 85 92 80 74 B6 91 81 90 100 92 79

Paddy 120 100 94 94 118 82 90 123 139 141 158 164 159 183 179

Highland Crops 130 157 164 222 254 284 295 310 310 286 298 316 354 361 343

Livestock andLivestock Products 104 109 129 125 118 113 111 120 124 131 138 148 156 172 179

Minor Export Crops 93 64 78 113 121 88 158 251 211 222 212 293 298 325 293

TOTAL 105 102 105 105 112 109 ill 123 129 131 135 144 147 155 158

A/ These indices are calculated on the basis of value added figure.h Provisional.

Sources: Central Bank of Ceylon.

TaeL7.Z PADDY CULTIVATED AREA AND PRODUCTION; RICO AVAILABILITY, PROCUREMENT AND DISTRIBUTION, 1970-64

1. li 1 m 111 121 1A 19 122 a im 120 m198 A/ ua,A am W

Cultivated Area ('000 hectares)

Eatent Asedduaised S/ 570 575 586 563 607 622 621 643 659 684 653 702 706 724 740of which: Major Irrigation Scheme (179) (181) (184) (188) (196) (203) (205) (208) (217) (226) (243) (258) (258) (270) (284)

Minor Irrigation Scheme (162) (163) (166) (165) (168) (173) (177) (181) (165) (184) (177) (177) (178) (180) (184)

Grose Area Sown 760 726 727 725 625 696 724 828 876 839 845 877 645 625 990

Net Ars Harvested ('000 he) 611 590 543 571 681 509 541 666 724 697 728 740 661 689 779Maba 384 375 356 373 447 302 363 431 471 494 496 501 424 495 451Yale 227 215 187 198 234 207 178 235 253 203 232 239 237 194 328

Paddy Production and Yields

Paddy Production ('000 tons) 1,616 1,396 1,312 1,312 1,602 1,154 1,252 1,677 1,891 1,917 2,133 2,230 2,156 2,484 2,398Maha 1,033 867 883 876 1,096 719 862 1,144 1,286 1,393 1,453 1,523 1,363 1,786 1,353Yala 563 529 429 436 504 435 370 533 605 524 680 707 793 698 1,045

Average Yield (a per hectareharvested) 2,664 2,366 2,416 2,298 2,353 2,270 2,315 2,521 2,613 2,750 2,927 3,014 3,260 3,591 -

Rice Availability ('000 tons)

Rice Production 4/ 1,131 977 918 918 1,121 808 876 1,174 1,286 1,304 1,450 1,516 1,466 1,689 1,631Net Domestic Supply S/ 995 860 808 808 958 711 771 1,033 1,132 1,148 1,276 1,334 1,290 1,486 1,435Opening Stock of PC L/ n.. 259 180 74 73 63 98 61 173 116 129 68 105 115 74Opening Stock of PIG A/ n.a. n.a. n.&. a.&. 12 49 17 15 103 128 65 38 32 34 112Rice Imports h/ 534 339 266 344 332 457 419 526 160 212 190 157 160 123 26Total Consumption J/ 1,228 J/ 1,245 J/ 1.150 1/ 1,109 j/ 1,255 1,134 1,197 1,316 1,320 1,420 1,394 1,521 1,487 1,627 -

Procurement and Distribution

Rice Procured by PHB ('000 tons) 379 473 383 332 303 169 188 358 469 378 142 85 59 217 113Rice Distributed by FC ('000 tons) 650 893 805 696 567 629 634 722 671 447 327 159 161 140 174

Memorandum Items (as a percentage)

Imports/Rice Consumption 43.5 27.2 23.1 31.0 26.5 40.3 35.0 40.0 12.1 14.9 13.6 10.3 10.8 7.5 -Imports/Rice Distribution by PC 82.2 38.0 33.0 49.4 58.6 72.7 66.0 72.9 23.8 47.4 56.1 98.7 99.4 67.9 14.9Procurement/Production 34.5 49.8 42.9 37.2 27.8 21.5 22.1 31.4 36.7 29.0 9.6 5.6 3.9 12.5 6.9PC Distribution/Mice Consumption 52.9 71.7 70.0 62.8 45.2 55.5 53.0 54.9 50.8 31.5 23.4 10.4 10.9 11.7 -

A/ Revised,hi/ Provisional.C/ Leveled and bunded land s4itable for paddy cultivation./ Based on conversion factor of I metric too ot paddy - 0.68 metric tons of rice.

A/ Equals rice production les seed and vastage, estimated at 125 of total production,/ PC T Food Commissioner.

AL PHB M Paddy Marketing Board.h/ Total rice imports not adjusted for 2.52 slackage lose.J/ Apparent consumption, estimated as net domestic rice supply plus imports, adjusted for slack, plus change in the

stocks held by FC and PMS, Change in stocks of private traders is ignored.J1 Does not take into account changes in stocks of PMB.

Note; There had not been any rice Imports in 1984, but a shipment ut 26,000 MT indented in 1983 arrived in 1984.

SoSces: Food Commissioner; Agricultural Implementation Prograume; and Central Bank of Ceylon.

Table 7.031 CULTIVATED AREA AND PRODUCTION OF SUBSIDIARY FOOD CROPS, 1972-84

121 1973 1974 1975 I 1977 IZi 122 1980 1981 ji 1983 19 !L&/Cultivated Area ('000hectares)

Manioc (cassava) 31.3 51.5 91.3 79.2 69.4 54.6 39.9 33.5 27.0 37.1 52.9 37.9 26.2Maize 16.3 24.2 38.5 40.1 30.4 36.7 28.6 23.6 23.4 28.0 44.9 47.3 47.5Chillies 24.2 36.5 41.6 33.0 43.3 44.1 33.8 20.1 25.5 24.1 28.4 32.1 29.0Red Onions 5.7 7.0 6.5 6.3 7.7 8.2 6.3 5.9 7.4 8.1 8.2 11.7 3.7Groundouts 4.8 6.2 7.7 7.8 6.7 6.5 8.3 5.1 11.2 12.0 14.4 13.8 9.5Green Gram 2.9 5.3 10.7 9.3 8.4 12.3 12.2 12.2 14.2 18.1 21.2 28.6 31.3sorghum 0.1 0.3 2.2 3.8 1.0 1.4 0.6 0.2 0.1 s/ 0.1 0.1 ...Soyabean 0.2 0.2 1.3 1.1 0.7 1.0 1.9 1.2 1.1 2.2 17.4 14.6 11.3Potatoes 3.2 2.8 2.2 2.0 2.8 3.2 2.6 4.2 5.2 4.6 5.7 6.6 5.6Sesame 12.3 9.7 13.0 12.7 19.0 13.5 17.0 16.7 31.5 25.1 32.7 31.6 5.2Cowpea 0.5 1.3 3.0 8.7 19.2 30.2 27.6 30.3 25.5 38.8 35.7 45.1 34.6Black Gram 0.5 0.5 1.4 2.0 5.1 13.9 14.1 8.7 8.4 10.1 10.0 17.5 33.0Dhal 0.03 0.2 1.3 0.3 0.07 0.03 0.04 0.07 n.a. n.a. n.a. a.e. n..sweet Potatoes 6.0 11.9 23.1 21.2 15.0 12.8 8.8 6.4 6.3 9.0 9.1 8.0 8.5

Production ('000 tons)

Manioc (cassava) 390.5 610.7 848.3 767.0 683.7 544.8 497.5 365.1 334.5 440.2 637.8 619.7 363.8Maize 13.7 13.6 23.8 34.6 31.2 42.0 35.3 26.1 31.4 35.3 44.6 51.1 51.7Chillies 12.0 19.6 18.5 16.4 19.1 32.1 28.3 21.9 25.5 21.4 26.8 28.7 23.6Red Onions 59.0 68.2 71.0 72.8 76.7 66.3 72.3 62.8 79.1 92.2 92.7 139.9 16.5Groundnute 5.5 5.7 7.5 7.6 6.1 5.7 7.5 5.4 14.1 14.5 13.8 18.9 6.4Green Gram 1.4 3.0 5.9 6.0 5.1 7.8 8.4 9.7 12.9 18.9 17.7 16.2 9.6Sorghum 0.03 0.6 3.1 6.3 1.7 2.0 0.6 0.2 0.1 S/ 0.2 0.06Soyabean 0.04 0.2 1.3 1.2 0.7 1.1 2.9 1.3 1.1 2.4 11.1 11.6 8.2Potatoes 46.9 39.6 30.4 27.3 38.7 33.4 38.4 52.7 75.9 63.4 65.2 82.5 42.5Sesame 7.1 4.6 4.9 6.4 8.6 7.4 9.7 17.2 23.5 14.0 23.2 20.0 2.5Cowpea 0.5 0.6 2.4 7.6 12.0 21.3 22.6 18.8 23.5 39.3 35.6 31.4 23.7Black Gram 0.4 0.4 0.7 1.0 2.4 11.7 8.7 6.1 5.5 7.3 9.0 13.0 4.2Dhal 0.04 0.2 1.6 0.2 0.04 1.4 0.4 0.05 n.a. n.a. n.S. n.a. n.a.Sweet Potatoes 50.8 71.2 144.8 142.2 125.8 97.3 82.0 42.6 66.8 77.5 85.8 73.1 73.0

A/ Revised.h/ Provisional.

N abs only.


Notes There was severe crop damage during 1984.

Iouss Ministry of Agricultural Development and Research; and Department of Census and Statistics.

т. ы . 7.а , леесеагбпоохтг0еетАт76 г7 сб, 1 я7 о- и

1v4 1s ц цгг lsza 1яz! 1яi �. 1ц.4 1v.t 1tu ts ц ца4 1�41 1sц 1l41 Ь/ Um. !/ ! �!f е/�

froduetioe fr1l11oo kp) ги пе 7и : и :а :14 1 яб : оя 1 яя : об 1 яа :1 о 166 1л :01 я:et rЬi еЬ� ецЬ lrove и 63 и и ео бо 76 7я 7г 77 7] 61 н бе гя ....1(вдlив lrove 7t 76 75 70 7! 7з 6S 67 61 бз SS S9 S1 41 33 в...Lov erow S9 S7 57 60 S7 60 S6 6] бб 67 б] 70 64 67 74 � , в.егрогев t.ulie. еб.) гоб 707 еяг. 7оЕ 173 :1 з :оо 1 еб 1 яз 1 еб 1 ц 1ы 161 1se : а 1яsn вогед ene ('000 ЬееЧ гее) г4: :4i t4: :4t � 4: г4t зи :и t4з гм us us t4: : з0 г11 ....Аи гц е 7i в1д (ip рвг Ьвrvи t вд

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ргодоееlоо (вillioo kев) е/ 1S9 14t !10 1SS 1 з7 1И 1S7 !4 б 136 137 1зз 1I4 ! � 5 140 !41 146or � Ьi ел� рbм е гvЬЬвг яб ео ы я: 7п n n es � я1 а 7: ы б: s7 к ....er.v. w�e.r бз ы 36 F1 s6 s я б: » s я s7 so 47 4 я 7з 64 ....Еарагt в (вi111oe Ы в) !61 1t9 l]0 i61 1� 1 161 177 1ц 17! 176 l71 177 1з1 175 1!! 1� Sп.. е.д. гв. е�оооыеевгвв) гзо �зо гзо �� я a6 ие �77 :n 1�6 :n :n : об �об :об :об ....Авегаее 71 в1д Itp рвг Ьвn евt адЬвеевгв) 7я7 7зб 7з7 77е по 774 7яо 77з ыs по пр 7os 7: я и1 64о ....11вр1. оевд Аооид в ( Ьп свnв) 4,us з,4]: з,s зя ., е46 г, ебs ],: з1 :,sso г, б17 з, ггб 4,16 е 3,4 з4 Ь, Чг 3, мб 4,66: s,3 зо в... sрврl еее. дсо.,l веhе f м еевги ) и s, э4 о иэ, зп 1г:, я11 1гs,esa l зб, нl 1 з1, яs: 1 зь,s оз 1з7,11s 140, з46 1м ,s и 1и , я46 1ss,7яs l61,661 166,s= з 173, оя .... � ,

s�Теодоееl ое t.uueo г� ев) :,s1o :,6i0 7, яб3 1, я» :, оз1 :, зяе :, ззо 1,6i1 г, � о7 г, зяз т. о76 г,:3 е г,s �1 :, з1 з 1, яа :,s74ог� ыеь: еоеоооеои ц лтя l, ооб 1, оэ: 46 е sго яб0 еао зяз би еоз soo бos лто би : бя бооDи i еевевд Сосеоие � / з7з з74 ззз гsе 3яг зs4 з! з гоб ги г7: г17 n6 : еб as з:1 з:3екрога с. и11 о. е� н .qui..l.ec е7 з 1,0l0 1, иб 417 46о бьs еоз : и sэs sя : зя 4оз s77 3и : а 7и

е/ t вrl вИ .Ь/ h овl вl оовl.1/ еп t в. и .,д/ 14 п п евд п вв м еl иди п и иодвг l в вt иn t ы вед, вf( вееlv г 1 я74, � Ьаедоовд t в� 1. одв. Dп � tor 1974 оеr п да вгв ealeulat вd

ое еМ Ьи l в о[ еЬв авr дг(1nieloe ot Ьвnевt ед � га вед t Ьив вкв еее eseieel7 еоврвгвЫ в rleh еhац of ветl И г 7ввn.е/ l оt вl iаеl аl вв "аеЬвг" гиЬЬвг оее вЬою вврегеевl7.j/ 7и дие ваиl ввl вае соеввгеЧ et 1 вt. toe oil � р,000 еиЧ .

l вt. еое Dи i еевегд еоеееие � б,600 оин .а... � eot вr вil вll в .

/ еигев� Свеегвl 1 ееЬ ot Cq1oe.

jAble 7,05: TEA PRODUCER MARGIN, 1970-84(Re per kg)

IM 1978 IM 1980 1981 1982 19133 g/ LM I/

A. Average Export Unit Value 5.37 LJOA 10-50 LLK 33.22 30.51 33.41 2JLU 2LM ULU 77.20

Less:Export Duty 0.86 0.86 0.86 1.98 15.50 13.27 bL/ 10.50 10.20 bL/ 8.00 8.00 7.00 b/Cesses 0.22 0.23 0.26 0.42 0.70 0.90 0.90 0.90 0.90 1.00 1.50FOB Charges, ExportersMargins, etc. c/ 0.52 1.09 0.13 0.15 2.76 4.04 3.68 3.35 2.69 0.25 6.16

B. Colombo Auction Gross Price 6.90 Dill MLLA IL2 ILU min IL4A J= 62.79

C. Salem Tax J/ 0.22 0.86 1.52 3.07 2.82 1.19 0.59 1.84 0.92 6.31 16,34

D. Colombo Auction Not Price (B-C) 7.73 13.24 LIJA ILJI MJLZA IWI IzX A" 46.45

B. Cost of Production 27.15 JAJIof which;

Tranaportation/Fuel Oil n.s. 0.54 0.56 0.67 0.95 1.10 1.82 2.25 2.30 2.65 3.39Fertilizer n.a. 0.78 0.86 0.56 0.85 0.85 0.79 1.11 2.12 1.93 2.47Tom Chests n.a. 0.65 0,71 0.71 0.84 0.95 1.19 1.45 1.62 1.93 2.47Labor 0.6. 3.06 3.29 3,74 5.98 7.20 7.59 e.4o 11.51 13.26 16.97Other Costs/Depreciation n.a. 1,70 2.02 2.95 3.57 3.60 4.06 5.45 5.50 7.38 9005

F. Producer Margin (D-E) 0.24 rSl_a 9JI AAI -0.75 -2.59 2.28 -0.95 -0.53 2AR "All

&I Provisional.bj The specific export duty an tea was raised to Its 15.50 per kg in November 1977 and then lowered in July 1979

to Re 10.50. The average specific duty shown for 1977 and 1979 is calculated by dividing revenues from thespecific duty by total exports. On November 13, 1981, the export duty was lowered to Re ONE. On November 14#1984, the export duty was lowered to Re 7/kS. The figure shown above is the estimated average for the year.

I/ Residual.SL/ Ad valorem tax receipts divided by total amount of tea sold at Colombo suctions.


Sourest Central Bank of Ceylon.

т. ы . 7. Об: ты 1н�1иеРиs ьl севстоа, 198 з- е4

Сое! of Сокроr асв P:otte N.r вinBsta дt i д Yis1d рет Ркодиосl од вt СовС ot йеС 8в1ее Eetat � Сокроквt в�

Eeariog iotal Оиерие Ввосака � / Eet вte Leva1 Productio д Реiев Lвve1 t,a � a1( Ьв) ('000 kп) (ke) ( ве/k п) (Вв/k в) (t в/kt) (! в/ke) (! в/k в)1� � $4 .1.� � � .� .4 � � i � 4 � $� IZ� Ji � � � 4 � � }� � � � � I � � �,tедек � I

Avieeavell в 1,592 1,825 2,317 ],069 1,298 1,514 24.07 ]2,77 27.11 ]б.27 42.]1 4В.Об 18.24 15.29 15.20 11.79н. ссод 8, з5 о в,] аа 10,2е2 12, Оя0 1,17о 1,]99 2а. во ]]. ы 27.8з ]7.11 э9. бs ае. оа 1a.es 14.4s ц . е2 1o.9s1< адд� 9,711 5,099 5,582 7,076 978 1,151 24.18 ]2.90 27.22 ]6.40 ]7.]6 41.71 1].18 8.81 10.14 5.31иwаквв1i Тв 1s,o19 1s,e9e 1 е, ба4 2],a7s 1,217 1,447 22,7 о ]1.2 о 25.7а за.7 о з7.5s 4а.17 t4.e5 11.s7 11. е1 е.47е. диll в 15,1es 17,801 19, �га 2 а, ззо 1,17э 1,2 зе 24.22 з2.94 sт.2 б зб.4 а зв.з9 45, ов 14.17 12.14 ц .1] е. б4R. е. це 1,401 1,5]9 1,927 2,] е] 1, аб] 1,1 ц 2б.7s э5,85 29.79 ]9.]5 а1.97 47.22 15.22 11.]7 12.1е 7. е7иawl вpieila s,9 э9 б, з7 � б,а1о � ,7еэ 929 1,111 2s.91 ]4. ее 28.95 ] е.] е з7,7о а2,9 е 11.79 8.1 о 8.7s 4. аоiоевl/ Аv веаi в 52.797 i6 � 887 � � ¢ .� ьgQ� . 1. ь1.?1 1� .34 � I4a31 ,1L.4Y � L1 � . � .е� � ,'� .,.4 з S$� L4a � 1La� L.eZ4 � � .

8L8 РСк �Паt сод 6 Маt вl в 19,277 19,111 17,56] 19,467 843 94] 24,99 ]].90 д.а, д, в, ]7,49 46.63 12.50 12.7] д. в. д.в.Кw вев C1ipa, gaputale д

l аl вд8одв 24,171 23,879 27,516 30,120 1,025 1,1]9 25.01 ]1, Вб д, в, д. л. ]7.62 46. Об 12.61 14.20 д. в. д. в.Rвlиевка б ltat м pur в 5,66] 5,595 7,970 8,496 968 1,004 27,5] ]5.21 д.а. д,а, 40,60 47,01 1].27 11.60 д,в. д.в. SОа11 � Ь Маt вк� 6,14] 5,90] 12,198 1],7]8 1,075 1,164 28.] б ]5.51 д. в, д. в. 41.14 46,8] 12.78 11.72 д. в. д.в. У,iotal/Aver вge 55.254 54.44В ¢.� a� Q.Z .j � .� 2� 1 _ �L62 1 � OS9 2� ,,4,4 }� ,, � . BaL. L� a,lL }§ � � ,4� sL 1sZ 12s4? PxSs Р:!sСквдд Tota1 30 б^051 � .I. � .�9� 93 � 152.027 д, в, д, в, , д. в. д, в, д. в. д. в. д. в. д. в. д. в. д. в. д. в. д. в.

Мевотвддив I еевег Op:ooCi дg/ Nev Pl вot{ дg Iд-fillia � Aeplanci дg Pвrcili: вr Аопli евti одГ1ввп{св (Ьв) - ( Ьв) ( Ьв) (Ьв) oua дeier ( еодв) �� $� � .L4 � Z� iZ� 4 3i � � .4 � � � � U � . %S� .� � L� �

� � а а4 о ]91 а5 ]0 - - 428 577 за, ое2 aa,ss7 721 e5sBLBPC 1,485 1,248 2]9 126 3,469 4,2 В2 4б7 60b 35,120 31,500 £% б]6 379 А/

i/ Dвriv вd f ков lieldr оЬtвi дед at t Ьв ркодиесi од 1eve1 адд dlff вr еовеvh вс Етов t бe oucput дасв 1ддlевеед � bova.� f Рок 19!], t Ьie дове доt i деl иде даt вil в оЕ Rвеасве v61 еЬ v егв tтадеf вггвд со Laoka бetat вe Davelops вot 1td.J I.ov вr applieatioe iд 1984 див to iaereaeed eubeeieutloo оЕ игав Еог виlрhаса of ав одiв.д.в. � доt аvаil вЫ в.

Nоtвк 1. Стор адд yield асtивlе to Nov и ber 1984 адд ееti васв� Еог DвсевЬве 1984,Z, Совt оЕ p:oduetion вt ввt вев 1вvвL i в bвеед од l вt евс вeturle вvвil вЫ а.3, 1lкеl идее ad вioiecratio д еЬвк8ее iдtereac, l евее гедt to L4C, depreci вtl0a, видi с Ееев адд Ъодик.4. i деl идва а екор еЬве8в of Ra 0.75/k6.

JLD6 � J адвt Ьа 6etatae Dвvеl ори де еовтд,8G8PC � 8:i 1�еаkв ВСвев Р1вдСвti оо Corpo:aCioa.

8еиrеввк Mi дietrr of J вдаt Ьв Eet вtee Develop вent{ and Mi дi � Crl оЕ 8 Свt в Pl вnt вtioo в. �

т. ыв Т.о7к ьОьььь 1н Таь роьtl с ьы тОь, 1983-84

СоеС ot Сотротвев proiit Mareieькt едt in Тi в1д pas production ве Сове ot Nвс ьаl ев бatst в Сотрохвt еьевтi кц Тоеа1 Оиерис 8аасвт� � / ьвt вСа Lav в1 produetian prie в Lвве1 Lавв1

(Ьв)_ ('000 kв1 (k в) (Re/k в) ( ьа/ke) (ьа/ka1 (! в/kt) (L/tt)� 24� 1 � . 1L� 3.� � 4 1� 1 � 3.4$ � � � .4 �24 � 14 � 4 3. � 4$ 14. � 144'д 1Р44 � 4$ 3� 4�

� � ,к � /Аvi аевr вll в 9,380 10,482 11,102 19,044 1,111 1,181 11.15 14.53 13.08 16.02 16.29 16.34 3.14 1.99 3.21 .S2ьадиll а 3 об 3об zs7 20 о ьа2 бsa 9. ьs 1з. об 11. Т8 14.s3 14.о8 13.46 4.23 .4 о 2.3 о с1. о»chi1. � 4о ао 29 3 з 723 е2 з 1o.s2 1 э. вз 1:.4s 1s. зо 1s.13 1з.24 4. ы (.s9 � 2. бе с:. об�[ в8в11 е 3,187 б,126 6,630 7,730 1,190 1,191 10.92 14.29 12. В5 15.76 15.94 19.67 5.02 1.38 3.09 .09Rитидеьаl. з2 218 зо бо 9оа 263 1а. бе 1 е. б1 16.61 2о.ое 13.о1 12.91 с1. б» cs.7o> с3. бо) е7.1Т)

Тоса1/ Аvегаьа 14.эаs 17 � 172 18.оае 21.Оь7 L.l9.Z L1� 1W� L� .s � j.L4. � 1 00 1¢,,11 16 2 � ,, р� � ,,,¢,t ,' � ,iQ � , �

вьы�ск �Мвt аlе 1,198 987 621 б94 5l9 9S3 12.3] 14.61 n.r, о.в. 19.77 17.98 о.в. о.в. а. в. n. в.

ьаl воi ода 2,001 2,OS! 2,092 2,203 1,047 1,046 9.94 13.33 а. в. д, в. 1S.7T 15.11 а. в. д. в. tл. в. е. а.

Ralutara i ьatoapura 16,489 16,б22 1i,910 1б,1i2 92S 940 1l.22 I3.5B о.а, д,в. 15.64 15.30 д.в. л.а. о .в. е.в.

Ов11 е � Маt вта 5,OS7 S,2 б0 5,366 5,38] 1,031 997 10.52 12.46 о. в, я. в. 15.41 15.03 д. в, д. в. а. а. д. а.

Тоt в1/ Аv втаьв � .ьZ4J. � � 4 1� .а� 3� ь� .� 3 2� 1 � 14 � 34. 13.] б д. а. д. в. 1S.5S 15.17 д. в. д. в. д. а. а. в. к 1

Сrвпд Tota1 ,� %ь� ISt � � SGaRL S� Z � � . д . а. д. в. д. в. д. в. д. в. n. в. д .а. д. в. n.a. п. в. п . в. в. в.�

Nesoraedu � It вввг Jprootiog/ Nw plaoting 1д- Еi111 о{ Rарl вдti дь f вeeiliser Авдli евti од-Сl евоi ов (Ьв1 ( Ьв) ( Ъв1 (Ьв) __ Ouaetic в ( садвl (k в/ Ьв )

1 � � � � й� � .4� . �Z� . 1Р.� � � . 1Z� . � ? � � � � � L44

дьDь S62 642 87 4В - - 871 890 Э,О64 3,б49 20S 22S9LlRC 1,933 1,226 275 AS6 - - 1,030 910 7,428 7, В68 308 716

� / Dетl ввд trow уi вl д� еЬt вi двд ве еЬв produatioo 1вvв1 � дд diEler вor вvбat t еов th в output даса i ддl евсвд вЬоv в.]t,/ 1от 1983, thi � довr aot i деl идв двt вil в о! ьвt аt ев r61 еЬ r вre tr вдаЕаттед to Lвдkв беt вt ев Develop вeoc Lcd.

о.а . � дас вvаil ккЫ в.

Not вs 1. Стор вдд � i в1д аеt ивl в to Nove вбae 19 ь4 вдд eeeieuta � tor Deeerb вe 1984.2. Coet of produetlon at eat вte 1eve1 i � bu ед оп l вtere веtивlв вvвfl вЫ е.3. ьксl идве вдвi дl аСтаеl оо сЬвкьве lосвтвве, l ваее твдt to 4ьС, двртвеi вti од, � udit f вее вnд bодив.4, Inetudea а етор еЪагВе of Rв 0.35/k ь.

J®ь � Jвм t Ьа ьвсвсва DвvelopreaC ьовr д,81 �8рС � 8ri Laдka ьt всв Рl адt асi од Corpos вtio д.

еоигеввк Mioi вer7 ot Jаавеhв Rвсвt в� DвУаl орввдt{ адд Mioietr7 оЕ 8cate Pl вдtвtione. �

Table 7,08: FERTILIZER ISSUES BY CROPS, 1970-84('000 tons)

LM 1975 1976 1977 1978 LM 1980 1/ IM A/

Paddy 88.5 96.9 89.8 127.5 98.0 97.9 72.4 128.7 136.1 130.4 190.0 155.6 167.1 162.2 181.0

Ton 108.4 112.8 98.9 93.4 102.1 106.7 95.3 80.1 115.5 105.2 109.9 103.3 102.7 115.5 137.8

Rubber 20.7 17.4 11.7 14.8 12.4 20.3 13.0 12.4 20.9 23.2 22.0 1648 16.5 18.5 27.8.

Coconut 64.8 59.1 49.0 39.2 40.1 40.6 30.7 29.1 42.6 49.6 55.8 37.7 30.3 35.7 49.7

Others _UA 61.2 AU 55..0 46.5 50.8 2.9 .2 64.9 64.0 62.0 52.9 62.8 73.2 68.3

TOTAL 339.8 347.4 299*1 329.9 299.1 316.3 264.3 303.5 380.0 372.4 439.7 366.3 379.4 405*1 464.6

JL/ Provisional.

Sources; National Fertilizer Becretariati Ceylon Fertilizer Corporation; A. Daur A Co. Limited.

Table 8.01: GROWTH OF INDUSTRIAL OUTPUT, IL/ 1976-84

17ZA 2. 21 .fL 12Z2 1980 19.L 1982 1il 1924 1976-84(Ra million) Annual Increase

in Constant Friceas(z)

Gross Output at Current Prices

Food, Beverages, Tobacco 1,715 2,295 2,609 2,856 3,899 4,496 5,246 6,998 8,623 7

Textiles, Clothing, and Leather 680 698 1,008 1,128 1,923 3,040 3,863 5,136 7,565 24

Wood and Wood Products, includingFurniture 129 127 124 166 289 315 361 522 640 8

Paper and Paper Products 203 270 376 445 476 626 725 901 940 8

Chemicals, Petroleum, Coal,Rubber and Plastic Products 2,336 2,469 3,279 4,508 9,416 12,015 13,099 11,888 14,328 14

Non-metallic Mineral Products(except fuels) 360 411 592 710 1,156 1,250 1,370 1,468 1,829 8

Basic Metal Products 138 132 219 349 478 428 262 302 199 -5

Fabricated Metal Products,Machinery and Equipment 474 571 590 569 620 782 904 1,129 1,456 2

Other Manufactures __2 34 __ 50 Ag 5A 58 74 90 _106 10

Total Manufacturing 6,061 7,007 8,852 10,781 18,311 23,010 25,904 28,434 35,653 12

All Manufacturina

Value Added, Current Prices 2,462 2,688 3,109 3,437 4,893 6,030 6,760 7,987 n.a. n.a.

Value Added, 1970 prices h/ 1,039 790 953 964 1,187 1,320 1,413 1,507 U.a. n.a.

A/ As covered in the Central Bank's Annual Survey under which questionnaires are sent to all firms believed to

have an output of Ra 500,000 or more. Around 5,000 questionnaires are sent out, but there have long beenaround 1,500 responses only, employing in 1978, 136,000 (almost half of these in the public sector), orapproaching 402 of total manufacturing employment.

h/ Implicit deflator for manufacturing, 1970 - 100.

U.a. * not available.


Table 8.02 MANUFACTURING SURVEY, 1982 AND 1983

Value of Value Value Added Capacity of Import Content inNo. at Firms Emplovaent Production Added Per Worker Utilization #/ low Material Use

('000 persons) (Is Million) (Re Million) (Ra '000)11 8 11 128 1992 IM 1 W t IM M M

Industrial Group

Food. Beverages a Tobacco 187 n.S. 21 23 5,246 6,998 2,259 3,276 108 142 77 73 i 20(20.2) (24.6) (33.4) (41.0)

Textiles, Wearing Apparel 6Leather Industries 316 n.a. 23 13 3,863 5,136 488 759 21 58 94 h/ 98 1I 66 64

(14.9) (18.1) (1.2) (9.5)

Wood 6 Wood Products 25 U.S. 6 9 361 522 134 284 22 32 92 95 29 16(1.4) (1.8) (2.0) (3.6)

Paper & Paper Products I n.. 5 5 725 901 257 388 51 75 70 * 71 50 49(2.8) (3.2) (3.8) (4.9)

Chemicals, Petroleum, Coal,Rubber, Plastic Products 225 U.a. 14 12 13,099 11,888 1,927 1.608 138 134 77 63 99 98

(50.6) (41.8) (28.5) (20.1)

won-setaltic Mineral Products(except Petroleum & Coal) 129 U.S. 16 16 1,370 1,468 862 866 54 54 85 17 63 88

(5.3) (5.2) (12.8) (10.6)

Basic Metal Products I U.a. 2 2 262 302 14 81 7 41 33 25 92 56(1.0) (1.1) (0.2) (1.0)

fabricated Metal Products, Machinery& Transport Equipment 373 n.a. 2 3 904 1,129 790 684 395 228 83 81 44 64

(3.5) (4.0) (11.7) (8.6)

Other Kanufactured Products 79 na. - - 74 90 29 41 - - 73 81 73 81(0.3) (0.3) (0.4) (0.5)

TOTAL/AVERAGE 1,426 n.e. 89 85 25,904 28,434 6.760 7,987 76 94 76 76 81 88

A/ Based on data provided by major private sector firms and State Industrial Corporations.h/ Excluding the Investment Promotion Zone.

U.S. * not available.

Sotes 1. Due to rounding off, components may not add up to totals.2. Figures in pareuthese-i ara percentage distributions.

oMsjs Central Bank of Ceylon.

, t вRe 1 о! 2 Рв{вв

х. л1. !. о], есlrol имс! Or нм0автлтs lмооепиьсоl гоипоав, 1977-ез

Cereee вeiee 9в1ив еЕ lredueeiea (! в ML111ee) ввt }rolie (! в Mi11( ее) 1967 / ве lceHt вв 2 е!s

i4IZ 3SZa iSZ � . 1P4.Q SY� 1 i$ � i � 1 1/ )4.� . � 141i 14i.4 1PL4 � � iSl1 1}!Z � 3 � . JI 13 � . 1I I авввеи вt j/ aPi� 1вв

Св}1 ое Рвt соlвw к:,16s п,169 � ,) � s е, з9: 1 о, оез 11. обб е,)]9 n... -1) е.9 -])+.1 19:. о 9о.] - � . т - ыи .s 9о).] s/ 1,) о7. о 1о7 6tвеl о..1 т.: ец . � ]ц 6s9 бse ]so s/ sse б)е е:1 .... -е.1 -: б.) - б). з -1 эе. б -1os.: -е1. б -s.6 а... -: -1 �ее. е. поигиц ll ве ц ) 1е2 :ы ]1s ]91 о... - - -1s.] � s.s 1о.г е.1 - � 1.7 .. в. - - - -eci t.au�. с... ее 16 а : о9 :9 з 7s6 6n ) я 9а 766 -z6.1 1s.6 7. а 1w.9 7.6 s.) ie.) ..,. � бcqto � еее.1 1з: :19 н 9 � )е 4:9 26: ц) хое 1.s us п .7 гд.] ss л . б - б:. я - ы . о -ц -19er1 woka т7тв 91 161 1s: :о9 sп1 z:1 : ео г97 :.+ � :.9 з:.9 s:.a 17. е s1. � о.] о.1 - -�вll оо,l r.p.c 111 2об s1o и9 зss з)] ] аа аи 1:. а и .0 - о.9 1.1 --1 е.б Ь. б s.e 1 1Со71 ое Свгвв i ев 64 79 1l! 170 1S0 1!0 161 1е1 !. б I � .6 26.] 41.9 ]4.1 10. б 0. � -1].S - 3

Cq1ou Р17v оодв 61 68 87 160 111 l64 161 100 -13.0 -].1 ).0 ]0.7 9.l 7.7 0.1 а.в. - - С�С�5

eri lвоkв тоывго зs � а бо ьб ц ь - - 11. о �о. б эз.з 1 о. � 19.6 s.] - - - - 'ввсiоевl e� te е t: 11 а: бб тб и о... s.6 б.7 е,] ц .т ул 19.6 х].9 to.e зi з9Всвсо ввгдr вге 32 18 37 � b Ч 14 ]9 1в -9.4 -1.] -O.i 7.1 -3.0 -2� .) -1б.� -27.! -]S � б

с.71 оа1. овеь. гтгоаоге. ц so s4 ]: ] о �о зв s9 о.) ]. б б. е � .: :. е :. � г. е 1 л б бРасааtлаа СЬвв i еаl в _,-- � 1] __1 е � г � � ]7 � � � ]. б ].9 6 �2 7.6 1 � 1 1.6 1.S о .в . 3 ,,, �

готбь/ вv авсе ] з, н) ], ебз 9, ео] 11,п1: 1],1 е7 1з,19о 1, ы: д/ :,197 - аоа.1 -: о1.1 s7]. е : ы . б -s1.e - б)6.s : � ee б.s 1,6]:. б т� а9вseludio! гвдгоl еи 11,1 е: 1,69а i,06e s,eao з,1 аа п,1 гд з,1 а б/ а... -:9.: 1)].о ы.е 19 з.1 -: е.б -н . о -2 о.е -) б. б -1 -

Table 8.03Tage 2 of 2 pages

Employment (Non.) 1963Production Capital Investment Capacity

Corporation 1981 1982 A/ iper, Worker per Worker b/ utilization(go '000) Us '000)

Ceylon Petroleum 5,190 5,809 5,944 6,186 6,232 1,413 136 56

National Textiles 6,573 6,842 8,647 9,128 n.a. 90 36 58

State Flour Milling 665 617 600 U.A. - - -

Sri Lanka Cement 5,959 7,507 5,152 4,875 n.a. 185 164 60

Ceylon steel 2,243 2,214 2,305 2,230 1,749 115 lie 25

Sri Lanka Tyre 1,921 1,888 1,904 1,874 a.&. 153 95 60

National Paper 4,604 4,383 4,562 4,340 n.a. 88 211 se

Ceylon Ceramics 5,819 6,136 7,234 7,255 n0a. 23 29 86

Ceylon Plywoods 3,684 3,519 3,547 3,700 43 41 55

Sri Lanka Tobacco 956 959 939

National Salt 1,008 1,055 1,778 1,939 7 39 -

State Hardware 1,578 1,439 1,385 1,327 1,286 30 35 30

Ceylon Leather Products 1,087 1,062 1,070 1,155 1,179 33 38 72

Paranthan Chemicals - 424 435 __M 541 _LJ03 _U -a _n

TOTAL/AVERAGE 43,711 45,865 45,820 44,550 10,949 266 88

Excluding Petroleum 38,!21 40,056 39,876 38.364 4,717 81 so

j/ Provisional.Capital investment is defined as capital reserves and long-term liabilities accumulated losses.Estimates.Excludes National Textiles Corporation and State Flour Milling Corporation. For Textile Corporation complete data arenot available. State Flour Milling Corporation ceased milling activities from and-August, 1982.Excludes State Flour Milling.

Ij Physical production as percent of nominal physical capacity, main products only (where appropriate, weighted) accordingto their contribution to turnover.

a.&. - not available.

sources: Central Bank of Ceylon; and Ministry of Industries and scientific Affairs.

ТвЫ � д.01: д1 г11Wе. 9tl9l3CJL GMCITY dJfD OOTNfT Ор ее#�10t fT � lS6 31lDO3T336l, 1l76-l1 � /

- --- hyl еlев- -- ---- --- - а еоое - ...т� . is гa � ' шп ш s isen � iяsк �sa� и i я.� . и isгa. � sгг lттп � и � isii ' ци � и �sr. иСу 1ео 9веr еl виа ('000 t еев) о.в. е.в. а. в. 1,490 1,749 3,]00 t,3S0 3,430 3,430 1,396 1,330 1,3i6 1,369 1,713 1,fOl 1,7f! 1,3 � 3 1,717tгвеl оы l t оееиов ( вlllioe вгевгв) 1os 1о1 1оь 13 о о... о... ео е: е1 se sг s: ]ь 3г � s 4 г и s9Су 1 ед ie..1 с�оооеоо.) ы ы ы 107 и1 109 1 о9 109 д... 3ь ] о 43 ss ss и :7 :7 иcq1e. с... ое r000 ееев) w3 во3 7 я1 еи е1о ац ие ие д... 4 я 3s ь sn s9: еп 7оь 974 907 ....tri !ваl в /t вt в 11 оиг

ии 1l от с�000 еоsв) 1:в и9 93 1о1 и3 1: е о... ел . о... и 1 101 ее 1 оо n ы ss - -ltвtleul h рве с'000 t оев) 3э 3� л ]е ]е ]в ]s ]е о... 1е :0 3s 3: :1 37 :3 st � ...9rt wo� . т7 гг с�ооо) 3 и и 1 е3 г9: 1яе 3 а 2и :ы 3ео ол. ие 97 1 п иа : оо 109 1 ы 1и ....Мвеi оеаl Ml1k b вгд ( вllllee lleeu) 16 36 36 11 37 2] 31 ]] s. в. l3 16 17 l9 30 30 33 l!f � .в.esi e� ota ги� вг (' ООо еоев) 44 44 40 92 � 9 е.в. 41 ]7 s. в. 34 37 ц 30 37 33 3S ]! а .а.Cq1oa Сеги l св ('000 t еов) 11 1S 1S 34 36 37 31 31 37 6 10 12 36 3S 1] 23 37 цCq1ee 011 в вад t вев ('000 еаав) 99 99 б0 10 9l 9l 91 92 ' 3д � 9 44 43 Ч � 3 SO 93 i3 S4с. � 1 оогlr оод с�оао .q. .. нг.s э.зю б,9 в9 s, яея е, и 7 е,е77 e,ea е, зз9 s,ee] о... � ,4 п 3,s7� ], о94 7,1s4 ],47s ],4ss � ,497 � ,3l � ....и вее оi веi п п гвв(егии~в> с'ооо и ег.в) 3,7 з0 :,903 :,so3 :,so3 д. � . и.в. о... д... о.в. :,o7s t,9o1 :,ses ь,s61 .. в. я .99е д7,3 и 39su � ...

t евl е f1rD п ('000 еи. восегв) о.в. о.в. о. в. 93 t>S l93 117 1S7 1Ч � 3 df 70 103 l9S 3S9 1SS 17i 131рвгвдеьвдсье.i евl в ( ееав) s,oso ], вео 7,9 ео б,eso 7,: оо 7,4 оо 7,300 s,0оь е,90 е 3, е� е 3,7]9 ],9 н 4,sss 4,7 еь � ,s4s ], ц1 ]s3] ],1 тА

�!/ 1д tho евге о3 tЬове iadu вtrie в eyeuf вeturi п{ гю гг th вa оаа ргодиоt, еврвеit7 вед output двtв вге pr. вeeted G

ia и вр сt о[ oaJet ргедиеt в ов1� .и frov[вlоы l.� ,/ Сврвгi е7 b ввгд ад веводвr д еl гев.

д. в. - дое n вll вЫ в.

� !: Сгеегвl 7воt о! СвТ1ае.

т. ее. e.OS, t воавл га иnиптпl ипоvт двоwerмclw 1 тОt ытв cowlao 1 а0rоиlст l аииаУ, t лl я- еьб/

� j1j0=Y еи евг ot O.it в геи l ав I ввввеи е t ( вв N) твевl iп и еи вt U� М) Ьnl ел ввt те tввt евl ( еев.1

1f.I.L Ll д4 L!ц ц ц 1!!l ц !!. l!L! ll04 L}.IL i! Н It4: 114! 1l1:. I:IO 1l11 1i ц U)l L1.1! 1l1L 1%I4 1!!L 1!!i iS11 1!8Ы i Ь4Т1k!

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(i аеl вдl ц гвnl еигв� 1 1 - 1 - 1 1 1 - 1S - 2 l ! - 26 - � 44 2f0 - !00 - 1t!fвОвг вд lq вг hodutв l ' ' ' 1 ' 7 ' ' ' ty � S � - - 31 - 1 Ч ' ^ � Sf -С1t вп( еа1 в, h егаl ви , Са 1,

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( и еqе гвегеl ев вед Совl1 6 6 1 1 ) - е1 иб 1 е 17 г . 101 :а 7s г1 7 - 1,sц 1, н1 н1 1s1 ио -1в� гi евеЧ Mtвi hodвeb аы

тгвовр ее у вl рвм е : ь : 7 t 7 » 1ц ц 1о) 1+ 1 е 77 1 е: 1о цо яо n д!1 1,16s � и sf7 1о= 7s1lи и t все� гвд hедоеев (д.в. в.1 1 и 6 1 1 д 11 е 776 s1v 1 о ы ги и1 1 ая 1,11: ио 1s я: :, би 1, ьы д, яо 1, Ч 1 1.1» ц sр п l еи 1 1 � . 1 _ 1 -1 11ц _-114 � !. 1 � _:1 3..5i1 - LO1S. 1! _ii _!4 .Llр1 _ 1 ь491 ...1!! � !1

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� �

tood, М вп ц в, и д tett � eeo - - - � � _ _ � � . � � - - - - - - - � � � � �Tuelln, Уи гi ц вррвевi, вв11..we rso+.u. е r ! 7 1 1 116 цо и1 1 об бб 71 w 6s1 1s7 ие 11 107 l,11: s,a! к,1 и :sa 1ьу 1,tnУоо1 вМ Уаед holret в

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iOLL 17 tS ! 12 10 17 S17 М 7 11! 1,1/t М 1 7i/ 676 1,t66 117 !,fl б 1,71! Sf) д,l1 е 11,O7i е,117 1,ff1 1,1l0 6,077

6J lnieвd.

)� dt Ceueat Саt авбо t еат вl с Савв i веl ае.

i. ы. б.аь, lпоиблиьгеvитхит6rnovu.6 п гоигбемеwг��1. lгvипаетддnбобтсоаеlrnы, иео- ы

Geвi° г* еивЬве е[ Ов 1t в tвев (вв Ievue вв et (! в в 111f ев ) теев l fвr ввtввве (t в в ill евв ) � в lел вве lееввееЛ_ ( М в_J1l.44 1.441 L443 14�3 144 � . !/ 1У� 4 1441 144Е 1441 14SS. !/ 14.4.4 13.41 14 а1 i9.Qi Ii4S 1l/ iL44 1iAL LZ4I � 11Q�. !/

Тоц {,qL �вппиятввпбобтqq� {п и cruc)iooa, бг.. с. и , вод гоевеев s б s б ) иь 1 а9 ит г: ) вэз 1и цб as s9 бь1 ио �11 аое атТваtil вв, Ун гiаб бррвгвl, rod

G и Ьп реадоеы е е !г 16 и и �о вя so :!: n �s )бх )бо su 1,s1o :,ip1 � ,: и 6,1 я t,asУт д вод Ут д ргедиеt в (

([seludle6 puceitaq) (: б / е : 1 ьs s :е s ь 1so ) 1� и si sи l,о:б s6: 16s?врвг аод Рврвг h одиеев (Сl ввl а l в, h еееl еи , Севl, �

lиЬЬег виаr1. веl сгrоеиеев го 1) 1о � б и 1 1оь 41 ц б s г� ii г fs1 ы s я :,drs r/ б f,oto t те :ор11оо- ввев111 е Mloeul Tcodecte

(neepe hero). � . оасо.1> ь ь 1 ь б : о1 ы я ее :{s i66 и ) о 1ы 1/) 1,w: / оо s бv / ц s4sI вЬгlевt вд Neu) ргодвесв, МвеЫ овгТ

.ватгввгрвгегтиlр,вввг я ): s ! г е /! :� бб )б б) )) ) э1 иб : д: ! е1 ы1 1,s эо )бэ 1su 6seМвво[вееогвд heduet в (в.в. в.) � f � 1 � ,� , � � � , � � , � ,j _j1 � � � � t ]]7 16) ]76 2,j � ( f16

татдь ss �1 � s s ь .1 яо1 61> >и � ss1 s/i 1, � об l,os) ео1 1, ол 1,: и б, пб s,/ м т,)n е,тl6 6,T6s �елг� ь еп anvuoпеааепбеиис)I оид, Фвввеабt, вад l еЬвею 10 !7 17 70 76 - - - - - ц )/ 1� бб 76 SЧ 1.717 � 91 606 Ч 7lн еil и . Уи гi аб 6pp вsai, вод

и. еЬ. гIrWueee 1ье )е � ) 4) s)s - - - - - s1 :! ьо � : кТб � ,Тба i, яб � ,oss б,н� ) �eos6Мао1 вsд Уоед ргодаеt в i

(Ioelydl ц prce(eur в) (S6 !1 )1 � б 69 - - - - - l6 16 ! 7) !1 1, � 75 660 446 � б! !01h рвг вод h рве ргодиеЧ (СЬв i ы l в, рвеееl еьв , Сеа),

weac ведлвпt еггодвеи 16 а 11) п )s se - - - - - )os еб и иь и� 1,1 ьs :, оо 1, боб ),ni t,uo1b е- ввевlll е Мl авr вl ргодоеее ,

(вsевре рвеееl еиа вед Ceal) бб � 7 )t 9t 1р - - - - - Ч t7 1) 7 11 !,lqS 1,!] о ), о6! ),10) 371p.ectc.ud кве.t ггмиеев, м.еЫо.гТввд iue вpoct eqoip ввet 1)1 1и s ь бе S1 - - - - - 61 N St бб � f t,9 л ts59 ),00) t.3 ь1 Ч �

Мвои[ веt огвд hoduat в ( о. в. в.) � ,( J¢ � � , � - _ _ _ _ Jj � � " � ... у уц 1гб � jj, � 4 � 1

тота ь9s 6s6 tэ) и 9 6to - - . - . ю ) iц и 1 би sы и , еп lо,ы ! б, бл t6,o� � я ,s тб

� / Гtовl вlоавl.

бЪ ев, 1. Dив to rwodie б еlt, гевреого ев ввр mt вдд ир ео tоевl в io еЬв ри С t вЫ в.L ТЬв / и С двt в и еl иди e1r11 � e бleurle б ввд eeertraetlee uetee.

J руц ц � ler вl6n евви tввве дdvi вoq Совв i еt ввт Lаев1 )arutuo! бдвi воs/ Совsi еt и в: вид Сваегвl ц а� о! СеТ1ов.

jable 9,01t PITROUUK WORTS, 1970-64

1977 im 1982 LM A/

YAJU 0 million)

Crude Oil 22.0 132.6 135.9 139,2 143*7 20loG 435.8 448.4 488.9 332.9 372.4Gasoline 006 - - 0,3 0.6 1.2 - - - 4.4 -Avtur - 0.5 - 3.3 8.2 2293 22o5 16.4 108 3.2laroxece 3.2 - 1.3 4.9 3.6 1291 - - 15.2 M$ 2:5Automotive Diesel 1.6 1.1 2.6 10.7 51.9 14.8 35.5 56.6 102.0 33.7Other 3.7 -W -LA __U 14.9 11,4 m 6

TOTAL 31.1 141.7 144.1 156.9 175.2 297.7 493.4 515.2 573.9 468.5 408.6

Volume ('000 tons)

Crude Oil 1,819.5 1,464.6 1,447.1 1,529.6 1,443.9 1,444.0 1,861.1 1,710.5 1,940.3 1,492.0 1,733.2Gasoline 32o9 - - 2,2 3.7 6.5 - - - 15.0 -Avtur - 4.2 - 15.8 55.7 65,3 58.4 45.0 5.4 10.9 -Kerosene 99.0 - 9.8 32.2 23.4 41.9 - - 43.4 55.8 6.5Automotive Diesel 69.8 9*2 26.7 82.7 198.6 42.6 110.9 183.9 405.9 140.6

IL/ Provisional.

Now 1. Totals may not add up due to roundinS.2. Date may differ with Customs data used elsewhere in this report.

"cat 0syloo Petroleum Corporation.

Table 9,02: IMPORTS OF CRUDE OIL BY COUNTRY OF ORIGIN, 1970-84('000 tons)

1970 1976 1977 1978 M 1980 1981 1982 1983 1j.4 a/

Saudi Arabia - 1,145.3 796.6 849.0 939.1 787.0 950.0 1,248.8 866.3 346.0 1,387.9

Iran 1,819.5 319.3 650.5 680.7 504.8 293.4 629.7 432.2 838.7 969.1 126.2

Iraq - - - - - 304.7 281.5 - - - -

Libya - - - - - 58.9 - - - - -

Malaysia - - - - - - - 29.4 235.5 177.0 94.4

Qatar - - - - - - - - - - 124.7

A/ Provisional.

8ource: Ceylon Petroleum Corporation.

Table 9.03; PETROLEUM PRODUCT EXPORTS, 1970-84

1975 1976 1911 191 1911 120 U1L 19I 122 11R8&/

AVIATION AND MARINE SALES

Value ( million)Avtur - 7.8 7.5 12.5 14.6 27.5 43,0 47.7 41.9 31.1 28.6Marine Gas - 1.8 1.8 2.9 3.7 7.7 7.7 6.8 7.9 6.0 5.1Marine Diesel - 3.4 3.2 7.1 6.1 10.9 12.3 7.3 8.9 7.2 9.7Furnace Oil - 12.8 12.3 27.2 20.9 42.9 55.8 42.1 39.4 35.0 51.3Other - 0.3 0.3 1.0 0.1 0.6 0.8 0.8 0.8 LA 0.4

TOTAL 6.4 b] 26.1 25.1 50.7 45.3 89.6 119.6 104.7 98.9 80.1 95.1

Volaume ('000 tons)Avtur - 84.7 68.2 68.1 81.1 73.8 193.0 104.0 91.7 74.1 72.3Marine Gas - 24.5 20.2 22.1 25.3 26.2 19.1 17.8 20.8 16.8 16.6Marine Diesel - 45.2 47.9 52.3 43.0 33.5 30.7 19.0 24.2 21.4 32.6Furnace Oil - 340.9 316.4 359.7 263.2 316.6 306.9 203.3 219.0 194.6 294.7

DIRECT EXPORTS

YLal (0 million)Naphtha 1.9 7.2 7.5 10.6 9.2 28.1 38.2 28.4 20.7 14.2 17.4Gasoline - neg. 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.4Furnace Oil 1.4 - 3.3 4.4 5.8 8.0 30.1 41.2 34.9 11.2 15.7Other -0.i 0.3 .. ng. Ut. nel .1 0 ,i 1

TOTAL 3.3 7.3 11.2 15.2 15.1 36.3 68.5 69.9 55.9 26.4 34.2

Volume ('000 tons)Naphtha 115.0 127.7 108.8 101.0 75.0 99.3 130.3 91.2 75.6 54.6 71.6Gasoline - 0.1 0.3 0.3 0.4 0.3 0.3 0.4 0.4 0.7 1.0Furnace Oil 161.0 - 92.5 59.1 87.5 55.5 182.9 236.5 212.1 121.5 92.5

TOTAL xPORTS ( million) 242 111 ALL 21d AL 1"2..jd 111d 1_A_2AL6 11L 1 122a

L/ Provisional.h/ Details not available.

Note: 1. Individual columns may not add up due to rounding.2. Data may differ from Customs figures used elsewhere in this report.

Source Ceylon Petroleum Corporation.

Table 9.041 DOMESTIC PRODUCTION OF PETROLEUx PRODUCTS, 1970-84(tons)

HZ 2 MAs.1 I HSi2A n tn tn li s/

Gasoline 143,441 86,788 99,448 103,348 120,623 97,843 109,371 99,553 113, 927 94,800 115,865Diesel, Automotive 266,636 255,178 276,336 276,620 242,200 246,002 384,311 309,583 336,232 175,528 358,727Diesel, Other 158,331 87,259 88,318 91,708 117,243 90,196 95,758 107.186 135,104 213,130 107,572Furnace Oil 698,461 537,473 513,678 545,349 547,377 534,756 744,877 701,419 715,302 492,549 657,776Ierosene 266,990 195,470 188,311 185,447 211,318 186,936 179,341 148,811 155.233 132,473 148,233Naphtha 113,263 107,391 103,484 102,197 82,372 90,237 150,850 137,653 157,616 119,638 144,337Bitumen 30 467 20,721 26,921 25,202 24. 872 24,100 26,174 15,516 24, 871 23,022 35,21110 32 1,030 2,130 3,101 5,355 6,199 7,477 6,425 8,197 7,074 8,631Avtur - 54,879 76,884 71,482 34,465 31,325 62,171 83,772 114,985 65,450 115,717Solvents - 1,700 1,863 2,130 2,565 3,374 2,350 3,386 2,549 2,983 4,238Fuel Cas - - -- - ----- --

Total 1,677,621 1,347,889 1,377,373 1,406,584 1,388,390 1,310,968 1,762,680 1,626,565 1,785,479 1,345,422 1,696,818

Memorandum Items

Energy Products 1,533,891 1,218,077 1,245,105 1,277,055 1,278,581 1,193,287 1,583,306 1,457,067 1,600,443 1,199,779 1,513,032Non-Energy Products 143,730 129,812 132,268 129,529 109,809 117,681 179,374 169,498 185,036 145,643 183,786

Light Distillates 256,736 196,051 205,968 209,782 209,629 195,954 268,986 258,292 302,279 241,529 273,582Middle Distillates 691,957 593,644 630,806 626,251 606,512 556,158 722,643 651,338 743,027 588,322 692,987Beavy Ends 728,928 558,194 540,599 570,551 572,249 558,856 771,051 716,935 740,173 515,571 730,249

A/ Provisional.

iuis Ceylon Petroleum Corporation.

Table 9.051 LOCAL BALES VOLUME OF PETROLEUM Ph 'UCTS, 1970-84(tons)

1A75 1I 1i I E 12A 191 199 .3 s/LPG h/ 35 582 807 3,108 2,432 6,404 7,110 6,663 8,197 7,150 8,718

Gaeoline 148,411 95,057 101,065 111,491 129,994 115,146 107,691 109,028 114,217 117,477 118,814

Ierosene 272,514 209,764 206,593 212,886 244,832 229,918 188,288 168,266 174,098 159,146 150,229

Diesel, Automotive 254,530 245,515 257,557 261,988 308,792 349,404 397,710 420,912 464,594 464,268 481,902

Diesel, Marine g/ - 5,232 5,183 5,497 5,869 3,726 3,027 2,585 5,515 7,829 3,859

Diesel, Industrial 87,831 37,314 35,663 46,245 62,015 64,188 63,953 105,000 143,121 295,885 78,552

Furnace Oil, Domestic 208,810 143,664 125,578 135,530 162,556 183,539 259,731 240,326 247,138 253,098 211,560

Furnace Oil, Marine - 20,108 20,088 18,762 21,233 16,099 12,887 22,884 26,974 26,881 8,577

Avtur - 13,571 8,614 16,499 6,749 8,169 22,843 30,967 31,415 34,262 43,806

Lubricants !/ 16,128 15,648 19,696 14,933 17,345 18,899 21,312 20,430 20,614 20,715 20,294

Bitumen 30,924 22,444 26,023 25,152 26,190 24,265 10,259 16,477 21,116 24,423 33,212

Naphtha - - - - - - 33,642 66,063 98,021 75,044 78,428

A/ Provisional.h/ Since March 1977, reflects transfers to Colombo Gas & Water Company.

Inclutes Marine Gas Oil, Marine Diesel Oil and Heavy Diesel.Other than marine and aviation lubricants.

Sourest Ceylon Petroleum Corporation.

Table .06: PRODUCTION, TRADE, AND APPARENT COINSUMION O LEERGY PETROLEUM PRODUCTS, 1970-84('000 tons)

11 l lit l 1i i m 1Ml5 191 i Im 1980 .9 1913. 1.9.1 1

Production 1,534 1,334 1,519 1,489 1,304 1,218 1,245 1,277 1,279 1,193 1,583 1,470 1,600 1,200 1,513

Imports 321 208 46 33 20 6 20 78 168 312 102 156 270 488 150

Exports 276 121 223 184 120 129 203 160 163 155 314 328 288 179 96.

Bunkers 565 510 410 462 358 412 385 435 332 377 357 241 264 233 344

Aviation 12 105 84 95 74 85 69 68 81 74 93 104 92 74 72

Apparent consumption 1,002 806 848 781 772 598 608 692 871 899 921 953 1,226 1,202 1,098

Per Capita consumptionk/ 80.07 63.51 65.94 59.66 58.12 44.31 44.32 49.63 61.38 62.12 62.41 63.58 80.72 77.97 70.39I-

J/ Provisional.k/ In kilograms.

Boure.i Ceylon Petroleum Corporation.

7вЫ в 9.07t PeftCLNM РАОООСТ PRICe СвА110{8, 1970- б4 � /� (еа р� г L1cer; ! в рег Iвретiвl Ов11оn 1n ТвгаоtЬе�ев) ¢J

� �О ввоli пв Autorotiw I едивt тl а l 'rie вel Рnкn вев Oi1

Виоет g{ � цj,{ � q/ � ¢ ц Д } � L Lor ¢у l оЬиг j/ Нi еЪ lulebnr S00 двееодв б00 евееадв 1.000 евееодв

Ревvвili об Реi ев.7 в. и. � 1, 197 о: о.7 е с3.s ы о.7 о с3.1 ы о.1 е ro.eo) о.37 и . бы - - о.22 с1. оо) - - o.1s ( о.7 о) - -

бЧb Ч аиед [ СЬвА{l1i

1970 - Oeeobes 26 0.84 (3. В1) 0.73 (3.41) - - - - - - - - - - - - - -

1971 - ltare6 1 0.90 (4.10) 0.82 (3.73) 0.20 (0.92) 0.40 (l. бl) - - 0.25 (1.15) - - 0.19 (О. б3) - -- о�саьвг2 е 1.1 о cs.oo) 1. ао c4.ss) - - - - - - - - - - - - - -1972 - 1еЪгивеr 22 1.15 (S.2S) 1.06 (4.80) 0.24 (1.0 В) - - 0.29 (1.30) 0.26 (1.II0) 0.21 (0.93) 0.20 (0.40) 0.14 (0.65)- ов�в. ьвгз1 1.26 cs.75) 1.17 с5. зо) о.29 с1. а2) о.47 (2.14) о. зь с1. бз) о. з4 с1.s з) о.2 е c1.se) о. г7 с1.: з) о.26 с1.1 е)14» - Аибиве2а 1. аа ( ь,s5) 1. за сб.1 о) о.а2 с1.42) о.бо с2.7 а) о, а4 с2.23) ол7 с2.13? о.41 (1. ее> о.4 о с1. еэ) о. э4 (I.7n1974 - .lвоиат7 9 2.75 (12.50) 2.64 (12.00) - - - - - - - - - - - - О.е4 ( Э. еы

- а. оивг� 1 о - - - - о.79 с3. бо) 1. об с+. ео) 1. ов (4.9о) 1. о1 (4. бо) о.ее с4. оо) о. еб сз.4 о) - -1973 - ОесоЬег 3 2.93 (13.70) 2. е2 (12.80) 0.90 (4.08) 1.17 (3.30) 1.19 (3.40) 1.12 (5.10) 0.99 (4.50) 0.97 (4.40) 0.93 (4.30) �1477 - м. гвь 1s - - - - о.77 сэ.+ е) - - - - - - - - _ - - - - �197 в- де�е, ьеец а.аос2о. оо) а. о7 cle.so> - - - - - - - - - - - - - -1979 - J иов 13 6.60 (30.00) - - - - 2.31 (10.5 ы 2.64 (12.00) 2.27 (10.30) 2.13 (9.70) 2.09 (9.50) 1.98 (4.00)

- Вврt а Ьвг 1 - - - - 2.35 (10. бВ) - - - - - - - - - - - -

19 ео-.7. ви. г� 26 e.2s сз7.s о) - - э. о1 (1 з.ье) 2.97 c13.so) 3.+1 cls.so> 2.4зс13. зо) :.79 с12. то) 2.73 и2.5о) :.64 (I:.oo)- ди. е 2о е. ао с+о.оо) - - з.за cls.te) 4.62 и 1. оо) 5. об (2s.oo) +.se (2 о.ю ) +. м с: о.2 о) +.+ ос2о.оо> +.2 я(1 я.5 о)

19 е1 - J вn ивг7 19 9.35 u:.so) - - з. еяс17. бы 5. яас27. о0) б. босзо.оо> s. бa ca.eo) - - - - - -Apri1 4 10.00 (43.50) - - - - - - - - - - - - - - - -

198 Э - Маге6 2 12.00 (54.38) - - 3.20 (2 Э.бе) 6.75 (]0.69) 7.90 (Э5.91) 6.43 (29.32) - - - - - -аи1� 22 1 з.s0 сб1.4о) - - е.3 ас29.9» е. и (зб.9 е) 9.2 ес4:. го) 7. ы с33. би 4. е9 с22.22) +. е4 с2:. оо) +.72 с:1.+3)

19 еа - - - - - - - - - - - - s.:: с2э.7 з) 4. е7 c:2.1s) - -

� / Ргi еев вге Соl овЬо вроt ртi еев{ в и тбl с to еоvве егвивроеt еовt в i в вддвд to out- вt вtioo priee в tor в11 produet � e:eept бввоlt пв,vAic б вв о[ Арг11 19 е1, вв11 в вt в ие1l ол ргi ев i вl вndwlde.

� / Аltb оибЪ ег1 Lвпkд Ьвв otliei вllp бодв ввегi е, ргi авв for рвt гоl вив ргодиаев aootiou в, tor ебв [i вв Ьв1ов, ео Ь� врвеl[i вд iai врвгi аl баll овв евл в. li свт ргi евв Ьвvв bввд оbевiдвд Ьу diridlag l врвsi вl бвll оо ркiевв Ь7 4.5461.

J Мвгkвti ц о[ гебиl вт бгвдв бавоli пв r вв di вeoncinu вd io ввг1� 1979.� / Ieduetri вl дi евеl i в о[ сео кв[вггвд to а. Ьввvу дi вввl= еЬв м о t вл в вге иввд i6[ вгеЬвебввЫ р ie бг1 Lвata. lrior ео 1972,

1ov виl рЬит indu вtri вl дi вввl v в� доt и гt всвд.� / Dt[f вгв.[l вевд [ игм е� oi1 vвв аое и гkвt вд ргi ог ео 1972.fJ Ав о[ J вowr � 19 е1, lw виl рЬиг iodu вtri вl дi вввl i в и кkвt вд вв 8ираг дi вввl.

и вг Cq1ee Рп тоl еиа Coepoe вtion{ вед Свосгаl Daak о1 Св71 оо. �

Xq_IjL9" : CEB ELECTRICITY GENERATION, 1970-84

Generation C02AC111 (MV), ----------------------------- Energy Generated (GWh) -----------------------------

Thelmal Ineral CgMRougggsInstalled Effective ftin Th2MAJ DIU Relanitiess Gas

Steam Turbines Otbgr &I SgRugaskAWL&

1970 262 243 740.3 41.6 781.9 2.0 - 39,61971 262 243 825.2 23.8 649.0 17.9 - 5.91972 262 243 648.3 93.7 942.0 87.5 - 10.21973 262 243 698.3 281.9 980,2 260.9 - 21,01974 362 339 997,9 14.3 1,012.2 12,5 - 1.81975 362 339 1,077.8 1.2 1,079.0 1.2 - 0.11976 402 377 1,108.5 24.3 1,132.8 23.9 - 0.41977 402 365 1,214.5 2,1 1,216.6 1.7 - 0.31978 402 365 1j365.7 19.3 1,385.0 14.0 - 5.21979 402 363 1,461.2 64.0 1,525.2 58.0 - 6.01980 422 399 1,479.4 188.8 1,668.2 140.1 18.4 30,31981 522 519 1,571.3 300.3 1,871.6 98.0 182.7 19.61982 562 539 1,608.1 457.6 2,065.7 89.1 352.6 16.01983 592 569 1,217.2 897,2 2,114.4 147.1 734.5 15.51984 h/ 882 850 2,088.0 169.0 2,257.0 11.0 117.0 2,5 38.5

IL/ Primarily Chunnakam (14.0 MW) and Pettah (6.0 MW) diesel plant and Sapugaskanda diesel (80 KW)from May 1984.

bj Estimates.

Notes Capacity figures are end-year,

&MIggs: Ceylon Electricity Board; and Central Bank of Ceylon.

-123-

Table 9.09: CEB ELECTRICITY SALES, 1970-84(in Ggh)

StreetDomestic Industrial Commercial Authorities Lighting a/ Total

1970 62.5 343.0 88.0 167.5 10.5 671.5

1971 64.6 373.2 92.8 180.5 11.0 722.1

1972 72.5 436.4 96.8 193.1 11.5 810.3

1973 81.5 466.6 107.6 198.4 12.0 866.1

1974 82.6 477.2 118.1 201.9 12.5 892.3

1975 84.9 522.6 122.5 222.2 13.0 965.2

1976 95.2 516.3 137.4 237.3 13.5 999.7

1977 106.5 519.4 147.9 252.8 14.0 1,040.6

1978 119.2 592.0 158.9 275.9 15.0 1,161.0

1979 153.2 629.9 203.0 296.3 16.0 1,298.3

1980 190.8 625.6 223.2 335.5 16.5 1,391.6

1981 216.6 647.5 219.9 380.6 8.5 1,503.1

1982 258.3 739.2 262.5 417.5 8.6 1,686.1

1983 304.3 752.0 291.8 433.0 9.0 1,790.6

1984 g/ 312.0 780.0 292.0 444.0 12.' 1,840.0

a/ Estimated.

Source Ceylon Electricity Board.

-124-

Table 10.01: MINIMUM WAGE RATE, 1968-84(December 1978 - 100)

Year Private PublicMoney Real a/ Money Real aI

1968 30 60 55 1091969 30 56 57 1051970 31 53 62 1081971 31 53 62 1051972 34 52 62 991973 36 53 65 951974 46 59 74 951975 52 63 82 981976 54 64 86 1031977 66 78 87 1031978 95 99 100 1051979 120 113 117 1111980 147 111 129 971981 152 97 146 931982 176 101 188 1081983 188 96 216 1091984 212 92 247 107

1981 1st Qtr. 148 100 143 972nd Qtr. 150 97 143 933rd Qtr. 155 97 143 904th Qtr. 157 94 155 93




a/ Money vage deflated by Colombo Consumer Price Indez.


-125-

Table 10.02: COLOMBO CONSUMER PRICE INDEX NUMBERS, 1976-84(By Commodity Group)

All Items Food Clothing Fuel Rent a/ Misc.

Weights 100.0 - 61.9 9.4 4.3 5.7 18.7

Index (1978 - 100)

1976 88.1 85.1 93.6 101.1 100.0 90.71977 89.2 85.6 98.9 98.3 100.0 92.71978 100.0 100.0 100.0 100.0 100.0 100.01979 110.8 153.0 102.2 125.3 100.0 112.31980 139.7 143.0 106.1 215.1 100.0 130.71981 164.8 168.3 114.0 293.0 100.0 153.81982 182.6 189.7 121.0 311.4 100.0 167.81983 208.2 213.2 128.7 414.9 100.0 192.91984 242.9 251.8 136.0 489.6 100.0 220.1

1983 January 188.9 196.5 126.1 325.1 100.0 170.8February 190.4 197.3 126.2 325.1 100.0 177.0March 197.6 201.4 127.8 381.7 100.0 186.0April 202.0 207.4 128.3 381.7 100.0 188.6May 204.9 210.4 128.7 397.2 100.0 189.7June 207.5 213.9 128.9 397.2 100.0 191.0July 209.5 215.3 128.9 .415.5 100.0 191.7August 212.0 214.7 129.0 466.0 100.0 1S4.8September 214.6 216.4 129.0 469.1 100.0 203.0October 219.7 223.2 130.2 471.3 100.0 204.8November 223.7 228.6 130.3 471.3 100.0 207.6December 227.3 232.S 130.9 478.0 100.0 209.5

1984 January 229.9 236.8 131.3 478.0 100.0 209.4February 234.3 243.1 131.7 478.0 100.0 209.6March 238.0 248.3 131.9 478.0 100.0 210.9April 241.0 251.2 132.1 478.0 100.0 217.4May 243.2 253.3 135.8 478.0 100.0 220.1June 245.3 255.4 137.7 486.6 100.0 221.3July 246.3 255.7 138.0 497.1 100.0 223.0August 246.8 256.0 138.0 498.6 100.0 225.2September 246.0 254.1 138.6 498.6 100.0 227.6October 246.7 254.9 138.7 500.0 100.0 227.6November 247.2 255.3 138.9 500.0 100.0 229.5December 248.9 257.5 138.9 500.0 100.0 230.9

a/ Movement of this index reflects controlled rents.


?вbl е 10. ОЗк MBOLEBALB PYICB Il сDЕЛ� 1977-84(1974 � 100)

13j,Z jBi, � ],y,j � i � $Q iq, � ,� г� $i jQ$ � j2$¢ 1983 ,,,i9841вс 2дд зтд 4t Ь 1ее 2nd 3гд 4е6

Mei кht � 4l к,. 4.Li� 4Э.[,. 9Sк,. 4LL. 4tf� 4.t кL 4 � к+.А11 Item 100.0 133.3 156.7 171.6 229.6 268.5 283.3 334.1 444.7 315.0 341.8 355. В 40].8 458.4 443,1 433.4 443.7

8r еоеет д; е� грооа 67.в 1 а0. в 155.5 1ы ,3 21 а,2 249.s sьз.7 з42.9 4ss.9 зоs. ь зz8.s зз8. о 4о2. б 478,9 ass.a азе.е 4so.6А1аоЬоli с dri дke 4.9 125,8 136.2 156.4 202.1 252.9 267.6 281.2 310.1 274.6 281.9 274.4 294.0 а06. б 305. В 30f.2 320.9 .i вseile , дд l ооеw вт а.0 16а.б 23 е.4 2as.6 249. о 279.3 эое.9 29о.б 29s.e 293. о 291. в 2в9.4 2ве.1 289.6 294,4 297.8 301.5ререт ртодиеl е 1.4 117.6 152.8 194.1 279.0 288.3 289.1 340.7 40i.0 293.2 302,5 368. б 39 В.5 401.1 403.1 403.1 412.5СЬеwi евl в вод еЬвwi ееl

prcduat � S.1 62.7 80.5 91.5 108.5 173.2 183.2 213.4 246.2 186.4 207.3 223.5 236.3 240.2 246.2 249.2 249.2раетоl вио ртодиеев б.4 109.4 109.4 183.1 355.6 467.3 473.3 608.8 685.1 506.1 5BS.3 658.9 685.1 645.1 685.1 685.1 685.111од-к ееlli с рсодиеее 1.8 172.7 254.1 2В2.2 407,4 412.6 444.6 517.4 633.3 490.1 501.3 510.1 567.2 597.1 612.4 662.4 бб1.3Mete1 ртодиее� о.9 9s.1 11 б.9 151.5 17 а,о 2об. о 229.9 2аь.1 э1 о.2 : зо. з : зо.в : зб. а 286.9 29а. з 299. о 323.е э:3. е?еедерое[ еqиlрк де 0.8 127.4 141.6 148.1 171.0 193.9 200.6 279.5 295.0 218.3 232.4 273.6 279.5 285.8 488.0 300.1 306.2Blectriasl вррli вдсав.де . �ррце. 1. о 117.3 1: э.б 138.з 15 а.а 185.3 232.а 26s.s 275.9 247. а 249.1 2s з.3 26s:5 271. б 274.6 278.4 :79.оКаеЬiаат� 1.3 102.6 109.2 124.2 139.2 161.7 167.6 192.4 197.5 172.0 184.3 190.3 193.4 146.9 196.9 196.9 199.3Рие1 едд light 1.8 179.s 253.8 319.5 388.9 402.5 409.2 419.6 511.7 432.1 441.2 418.7 419.6 478.3 489.4 539.5 539.5Мi еовll адаоив 4.8 150. В 222.9 2б0, е 328,7 337.9 359.5 452.0 451.8 ]98.4 442.8 467.3 432.0 459.6 450.4 431.6 4б5.4

ео�" оФ:ii 5 о. э 115.а 13 з.9 1аа.5 17 т. о 217.о 239.6 25 э.7 282.4 247. а 25 ь.5 2so.9 2ьо.1 абе.9 z в2.3 287.4 291.1 �Ie �parte 27.2 93.0 138.8 l64.9 2Э7.б 301.4 295.2 325.4 346.9 298.2 318.7 340.6 ц 4.0 344.5 ц б.3 ц S.1 ц 7. бBspore � 22.s 229.9 229,1 241.э s37.o за3.7 зьs. е б12.9 9z б. а аеб. з 5s9. в бОе. а 797.1 1 � 019. б 919.1 e6s.a 9оо.9

8 в евсеогс ,Содеик т 75. Э 140.7 157.2 1б7. б 227.1 252.8 268.3 345.8 453.5 306.8 372.4 ц 1.9 402.1 472.9 451.2 479.3 450.6Iocarmediate 20.3 116.7 152.4 184.1 249.5 318.4 329.8 381.9 420.4 337.8 371.8 402.6 415.5 420.7 421.1 415.7 424.2Ioa вrt к дt 4.2 13D. б 169.2 195.2 264.7 303.1 325.1 367.0 � 99.0 349.5 363.1 375.3 3В0.2 3В3.б 385.9 413.0 413.4

Ваите� t Свnетвl Bank оЕ Се� 1од.

Table 10,04: COST INDICES FOR SELECTED BUILDING MATERIALS AND DIFFERENT CONSTRUCTION ACTWITIES, 1972-84(1969 - 100)

Item 1972 1973 1974 1977 MI UR IM IM 1963 19 94 Aj

Cement 100 111 164 164 164 164 ;99 292 636 713 $14 624 924

steel (N.G. BarO 139 161 279 261 261 255 274 458 504 572 573 632 $17

Bricks (Hand molded) 89 124 156 156 156 156 268 285 393 388 442 461 540

Asbestos Shoot (Corrugated) Ill 1" 213 254 295 286 327 411 607 627 706 799 R31

Timber (Sava) 100 100 129 129 129 129 217 376 634 814 814 833 63B

Metal (314") 100 100 120 124 148 Ifis 338 533 617 551 557 632 '698

P.V.C. Pipes (3/4") 153 227 267 237 237 264 362 459 520 520 520 $62 619

Housing Construction 110 123 149 160 163 173 252 347 519 617 645 691 767

Non-Residential Buildings 117 134 174 181 186 199 254 320 463 548 386 631 708

Other Construction Vorks 115 130 166 169 175 187 220 278 366 457 493 534 599

All Construction Activities 114 129 164 171 175 186 247 327 469 558 592 637 717

Al Estimates.

So-uxjce: Ministry of Local Government, Housing and Construction.

Table 10.05: ADMINISTERED PRICES OF BASIC CONSUMER GOODS, 1977-84(Re)

Dec. Dec. Dec. Dec. June Dec. June Dec. June Dec. June Dec.i 111 M2A 9 1981 982 1W M 1984 198

Rice for Food Stamps kg 2.15 2.15 3.48 4.48 6.15 6.15 6.15 6.15 6.16 6.25 6.72 6.72

Rice (Open Market) kg 3.70 4.24 5.13 6.72 6.07 8.60 7.69 7.87 7.74 8.94 8.65 8.89

Flour kg 1.32 2.47 3.00 5.23 5.50 6.65 6.65 5.95 6.82 6.82 7.75 7.75

Bread kg 1.32 2.21 2.76 4.52 5.06 5.95 5.95 5.51 6.17 6.17 6.78 6.78

Kerosene liter 0.76 0.76 2.35 3.34 3.89 3.89 3.89 3.89 5.20 6.58 6.58 6.58

Electricity unit 0.12 0.31 0.31 0.35 0.35 0.35 0.40 0.40 0.40 0.40 0.40 0.40

Bus Fare journey 0.50 0.60 0.60 1.60 1.60 1.60 1.60 1.60 2.00 2.50 2.50 2.50

Coconuts each 1.42 1.00 1.82 2.48 2.02 2.58 2.41 2.47 2.54 4.13 3.89 3.98

Coconut Oil bottle 4.58 4.24 7.06 8.38 8.43 8.50 8.23 8.07 10.00 20.80 23.70 19.75

Milk Powder kg 12.13 12.13 18.74 26.28 32.50 31.25 34.47 35.88 52.00 52.00 52.00 58.20

Sugar (Open Market) kg 6.62 6.62 6.62 14.55 16.50 13.50 12.63 11.90 12.50 13.00 12.38 12.50 W

Souraei Central Bank of Ceylon.

т. ы . 11.oi, еа sст�а �осш . квакг� т вt, 19аб- еь

1 �5lе 1Я� .� � 34� 191А 1911 141i 3l1� 1l1� 1�1� 1.Pi. � J3ll 391.4 131! ll � 4 1!!1 а!!,i в/ 1!!Z д 3!!! д

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хв::. та А«о оnlасалрвч

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Iat вoe Moeealie � (рег '000) 141 11 56 4! 4S 1б 46 51 � S � � А2 77 ,36 42 S4 о.в. ' а. в. а. в.

сгие. еl геь евсо ср.г�ооо� з1�4 ае.1 а4. � :9 л so.4 �о.о аа.0 :1s :1. а г1. е х1.9 :e.s : е.9 : � � : а.0 � .е � .: . л.

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Lt � о! Nвеигвl Popul вtion �l еегви в fi) 1.1 :. в п. б 1. а 1. � :.Z s.o 1.9 1.9 I.o а .1 г. а :. х 2.t г.! а/ :.! !. о .... р

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АrвевRе А{в � е Маггi в� в:И.1 е а1. о г1. п а1.9 - яа.,, s1.9 п1. д п1. а :1. з г1. б s1.s я1. б :1. е :1. е о.в. .... .. в. � ...ree � 1. : о.1 то.9 :п.� - ц .s � . о х:.1 Т:.1 гг. е хэ.а хз.4 гз.4 и .1 ц .б А. � . ол. �л . � .� .

ИивЪвг of Nev 1л i1 рl вооi оа"Аееереогв" с�ооо� - - - ss +9 11 9б 1 п 11 еа 1s 1б 9: 1s � 11 о ta 11 з 1�

1ем 1е � Стидв) Lrbo т роr ев �l вrtieip вeloo l все ( в11 ц ев, 3) - - IS �S 19.5 19.1 - � - 20.7 20.6 - - - - 21.5 19.i а. в. � �в�

� / Tro в i вio м l.

игеввl Aepr тtaeet оЕ Седвив ввд бcati вtie в (Ьагвд ое t Ъв 10 х ввr рl е рориl веi ое евевив 19l1)i l ееi еагве Gепегвl' в Dep вrt вenc;впд Гаа11r Bealth � иееаи.

�l . �

� таыа 11. о2: wttOH вОСкеь еттвМ�гтvt еекМпв.лтl0 Мтотоl ы , соиаитеохвти ! прогдl тОt авлМи Тосое, lябя/70- м

S of lotal Cuereet Rкeandilure в Adluated __ У оЕ CD! (enrr вse ввгkеt екi ев)l оСа1 8осi вl l осаl доеi вl

Tota1 Ситтеде iocal 8erviea в вод l оеаl Ваквi еаа вадEspenditure Soei вl Net food МеС lood 8 аа1[ Ь Едиевtl оо Воеi вl 1 ве l оод iat l еед

l ввг Ад wted � f Н а � бdue вtion J 8 е в � 8ub вidie � J BubaLdi в!- ¢/ lotal � f l оt вl � / $ � j � ,: bf 8иЪв; д; ав � f l оЬвi дi и � /8в rillioa

1969/7о :,577 9.1s 1 е.33 2 в.4 а 12.66 а1.1 о 2. оо 4. о1 б.:: 2.77 е.991970/71 ],019 1.84 16.01 24.14 17.76 42.49 1.99 4.07 6.21 4.48 10.71

1971/72 4,02] 6.71 16.1] 19.88 16.34 41.20 2.47 5.06 7.80 5.13 12.9 �

1 я7э з, 777 6.94 1а.9 о 22.69 17.9в з9. еs 1, а2 3. об 4.4 а а. бя е.171974 4,sьs б. ао 12.n 19.9 е 2о.вб ао.о: 1.2] 2.45 з. бе 4. ао 7. и1975 5,265 6.15 12.43 19.39 2Э.37 41.95 1.23 2.48 3.11 4. бб 8.37

1976 s,6o2 б.в9 1а. о7 21. в] 16.7з ]7.7о 1.29 2. бэ ].92 ].1 э 7.os1977 6,55] 6.94 13.13 20.86 21.73 41.79 1.26 2,39 3. бS 3.95 7. б0 :

у�СМ�1978 10,491 4.95 9.37 14.89 20.33 35.21 1.22 2.31 3.66 5.00 В.бб Г

1979 10,887 5. В1 10.40 16.87 21.36 38.24 1.21 2.16 3.51 4.44 7.l5

1 яе0 12,7]о 5. в1 1 о.9 о 17. а2 2.4 о 19. е2 1.11 2. о9 з. зз о.46 ].791981 1s,o2s 5. п 1о. ба 17. а х.об 17.59 1. оо 1. е7 з. оо о.1 о а.о9198z � / 19.11г 4.99 1 о.s э 16.:1 о.49 16.7о o.9s 2. о1 3. о9 о.о9 3.1е19 е3 J 24, а99 5. оа 9. В5 1s.61 о. а1 16. о2 1. о2 2. оо . 3.16 о.ое з.:41984 J 27,61] 5.49 9.68 15.84 0.] б 16.20 1.09 1.92 � .15 0.07 3.22

f,/ l оt вl еигтвдt асрвддi ситв adJuatad � tot вl eureent e:paodituee - 8товв food виЬаi д� � деt food виЪвl д� .� / бspaoditur вв оа еигтвдt аееоидt оо1у.g/ Ia 19 б8/69, 8ri Laoka introdueed а диаl ехеЪво8а твеа. 8оv вv вг, food iapoet в, rhi¢ Ь dat вл ina виеЬ о[

of с!к еовt of tha Еоод виЬвi ду, vвте valuad at tЬв offiei вl акеЬво8е гаев аод аое ае t бa >!` ЕС гаевehua иадвгвевеing !Ьа erue совt ео ehe budg вt. 1Ъ� 8товв Еоод виЬвi дr � ввl иед ае the aw la 16 екеhао8етаев, vould и оипt to 6,4 Х оЕ ODp in 1977.

� ,/ 1bc eoo вi вteot viC Ь fi8ure � вЬом iu сЬе bud8et tаЪl ев (5.03-5.04).

8 оиеее: Саl сиl асад froa Bcaci вcieal Appeadi: SвЫ ев 2.01, 5.03, аад 5.04.

t. ы . и . о� ь t и ьте fтбтпп ее, 1 м 91 � о̀ е1

I.4alL.L4 1324L.i1 1!ц 1.l2,i ]!1! 1l11: 1.l2l ь J Я11 ].!i! 1!]3 J.ilQ 1.l ц 1! ц !!!3 1!!i

torpica ц fprulietoe Яеп �тп� гбiein в) б/ 4» 4�9 4s� 4s6 4s � вsе 46 о 46 � 4 м 4ы ьео 4ее 49: м 3 ....И гwав рп t оврi евl 2i, �os 2� ,ы I 2е, и1 � бв�ое 19, обе 29,462 2l, и9 :9,eso :l, зоб 29,l и зо,I а 3o,IU 3o.n2 31,2� о � ...l втвевв рвт eN 320 310 31S 319 332 331 334 736 341 341 3� 0 ц 0 3S0 ц ! в. а.

Ceetnl DUpвeuHu 772 776 7б] 749 756 355 331 756 77! 367 717 ц о 77! 7S7 в.е.

рт еев р. гоl вр.. в. и 3 � , бяг 3е, ооо з�,н s 3г,s1 о 3�,31s 3e,o1I 3я, оео и ,1sl sl,4ss и.:12 ь:, и3 м ,ое: 44,9) е и .а1 ....м е. те! Оеееем 1,93: 1, бя3 2, о3е :, ое9 :,1: � :, ие 1,:4 е :,16 е 2,2se 2.2 и 2. оп 2,:33 :, оц 1,9я ....т. т. оо. р. тОекеет б, ыг е, г44 а,71о 6,2aI 6,2so а,31: б,l о: .,429 6,2 е: 6,794 I,1e6 б, п: 2.46 о г.9 а: +...ыи. ьето[ Аи т. Мвдi евl Гтвееi еl ооетв 1,22s 1,н s 1,:os 1,1a 1,111 1, отs 1,os! 1,o1s 1, пе 931 1, аое 9a евб I,osт . л.f втводо рвт 1 ввt, Medie вl pr вeeieioe вs 1о,213 10,42t 10,613 1l, бц l1,966 12,SS4 1.� 9S] 1� ,733 12,041 11,266 14,611 l6,203 l2.1 ег 16,SeS r. в.

во. �ь. тогr итввв s,s4: s,s4: s,oo7 б, э2s s,:ee s,69s ;, �7: s, бto 6,169 б. еье 6,:n б,eos �,sI4 I,:16 в... ьМ

lвевеав pas мтв. :,2 ы т, зоз 1,s г1 1, е9о 1,s14 :,369 :, зя3 2, и : :,299 :. и3 2.3sт t,1a 1.aos :,ul .... �виьевто! l ервеiи Ч t' оооl 1,os4 1,COI 2,os1 2,о3е 1, иб 1,1 и 2,: е1 1,1 ее 1,II4 2.42s 2,3s4 :,:n 2, м s 1,so2 ....иь. л.те[ аер�тi витв t �аоо� :9, бяо 14,и 3 :1, о19 16,:м :о,316 r,,a4 31, ыя а , тб4 : е.419 :9.4 оо u.e9l 3о.1 и ц. б96 3о. по ....Rвr � ееврt огв о! рввill pl вaeie6 МвеЬодв 3S � 169 И .31] jj, � 95.9l1 7l.927 7l � 30{ ee.als 76.6f0 Z¢,1l � � LiS4 ]1) л).i4 JIl,S.11 111 ы ы . 11l.7.71 f/ I].L3iL f/

1� ер. 1s,I я9 1I,u6 16,s9я 1г,s1е 19, и3 3:,1 и :1, о3о 1 е,311 23, ов 2о,I ет и ,13: u,us 1s, бте Is.63s jI I1,u3 е/tu тtlis.elee 4,9п :4s 9,s26 2о,246 42,174 »,164 3s,see и ,oss :1,9м 3s,6u 112,пб и ,9 п боди Ioe,I63 д � LS3те/ �оеь. ти. елодв цв4яя 3I,63: 42,еь! 4e,1ss - - 2s,slг 2I,s14 31,1и 36,326 39,оо2 36, Ч : зs, м3 4r,3r д/ 3 о.4 т4 s/

еи аеевве e:p вodlenre (ев aillioe) 236 13f 2S4 262 292 324 3еб 4SS S1e i32 140 t3] !37 l,733 j/ 1,] М j/

Сврl евl евреодlln ее U в вlllieal � ¢ 7¢ � ¢ � ¢ ,,, �,г ,4¢ ]!4 � 1I! � � lL .,.l43 1!! _i1� . _I!1 J..4! s/

тое.1 (1 � � i11l ое) 2�4 166 2ео 29е s19 41о soo 4! е иi 1. о13 I, ц1 !94 1,12I 1,a1t 1,2м j/6 рувд[еите Рвг рвтвоо ( ео) Q/ 1е.о 1е.о 2г.: :1.е 14.t 3о. � s6.4 3s.I и.3 Io.a l1.I 66.9 3� .г 112.6 и .I s/t отвl t:peodlt игев ав 1 ot oDp 2.1 1.9 1.! 1.f 1.4 1.6 1.е !.4 1.7 2.0 2.2 1.2 1.2 1.S 1.о

� 1аеlидвв в t вrsit! боввв.� / I аеlадвв евр{! в1 о рвадlturu, екввt в вед eooteibutio � в.j/ 1го� l вi еи l.

� рg теевь CqвrWet о! t евlt Ъ / етьlевв аад Oqвrt ы et е[ Свт и� аед iutluie в.

7 в� f � 1l. М к t01К � t1011 6TA7I/TiC/ � !l7 Р�М

1�1II и 21 � 41i 1lLi 1lLi 1 �i1 1lL �. 1! ц 1lLl 1lZL 1� 1lJ1 ц i! I! � 1!!3 N

Теl в1 ta+ бer е! tebele � вliJ, } ы ,tL L,1}Z !ьl1,Q � а4� L4if L� l..1I1 l.111 l.S1E :+Il4 L11L Ll4L }вbL l':` �

u...ee.R б,ие 7.l я 6,s4f е. �и 7. ьы 7, иь 7, и7 7,6�6 4, о:б �,п� 7.1 и �ли 4, и> >лn ь,еоо

й ееедвq 1. Ч б l.S77 l.1 б1 7.10! I.[0! l.770 1,7i7 l.777 l.4 Ч S.S1! 1.7[t 3.i01 4,f11 S.Sf! 3.3Si

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Table IlLai TOURIBM: ARRIVALS BY REGION, 1975-84(Number)

im im 12L2 1984

Western Europe 60,187 72,624 103,807 125,664 160,664 213,482 245,785 232,290 176,310 185,413

Asia 24,604 25,417 27,447 38,560 56,975 74,676 88,744 135,0" 124,620 91,826

North Apterics 6,823 6,279 8,907 10,729 11,701 12,878 13,946 15,528 14,686 15,353

Eastern Europe 4,957 5,825 4,480 6,102 5,496 4,906 5,311 4,160 4,488 3,264

Australia 3,683 4,199 5,415 6,629 7,374 8,724 9,584 12,634 10,554 11,655

Others 2,950 4,627 3,602 4,906 - 5J54 7,114 7,372 7,330 6JZ2 12,489

TOTAL 103,204 118,971 153,665 192,592 250,164 321,780 370,742 407,230 337,530 320,000

Memorandum I&M:

Tourist Night@ (1000) 1,015 1,194 1,645 2,061 2,777 3,548 3,907 4,048 3,179 3,200

Guest Might@ JI/ (.000) 656 847 1,109 1,350 1,637 2,008 2,097 2,056 1,652 1,766loops in GradedAcc dation 3,632 4,581 4,851 5,347 51599 6,042 6,691 7,539 8,698 8,979

Tourist Receipts S/0 Million) 22.4 28.2 40.0 55.5 77.7 110.7 132.4 146.6 I26s9 11S.0

JL/ Estimtes.JL/ Tourist eight@ In Graded Acememindation.

Data not consistent with the foreign travel receipts date presented in Table 3.01 which are based an Central Back ofCeylon date.

Source: Ceylon Tourist Board.

public disclosure authorized sri lanka: recent economic ......balance of payments mercrandise...

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