 Sri Lanka is at the threshold of an economic revival. The situation promises to play out well for the country's future. By all accounts, Sri Lanka is truly an economic wonder. Long a victim of internal strife caused by the bloody civil war waged by the Tamils (LTTE forces) carrying out hundreds of suicide attacks against Government forces in the last 26 years, the country has not only recovered but amazingly has managed to maintain steady economic growth despite the conflict.
It is safe to say that particularly from the standpoint of a partly war ravaged country, Sri Lanka has made enviable progress in some quarters. Indeed, experts are marveling over its quick recovery. While its GDP growth rate has fallen from 5.4 percent (2004) to between 3.5 and 4.5 percent (2009), hardly any South Asian economy has fared any better. The trade deficit has fallen appreciably from US$3.66 billion in 2007 to US$1.84 billion in 2009, supported by steady exports despite the internal strife. With a positive trade balance of US$3.36 billion, savings rate of 14.1 percent and unemployment at a commendable 5.2 percent over its 20.2 million population at last count, Sri Lanka looks none the worse for wear than its more peaceful neighbors. (Source for Economic Data: Central Bank of Sri Lanka.)
This is nothing short of an economic miracle and must be commended. Few countries can shrug off nearly three decades of war and resume their economic stride without so much as a pause. Ever since the announcement of the end of conflict in May 2009, Sri Lanka has lost no time repairing and reshaping its battered economy.
What could be the reasons behind this economic miracle, and how has Sri Lanka managed to recover so swiftly? Tourism remains the country's most valuable foreign exchange earner and continues to attract people from all over the world. Its famous beaches in the south and east, ancient heritage sites in the interior of the country and lush green resorts in the mountainous regions continue to be a source of pleasure and wonder for visitors. Elephant parks, national parks and the gemstone industry are other major attractions. Despite the war, Sri Lanka received over half a million tourists in 2006, most of them from the USA, UK, India, China, Canada and Australia. Thankfully for the world and the local economy, its lush greenery, pristine beaches and idyllic waterfront remain largely unaffected by war and the damage caused by the 2004 tsunami is nowhere to be seen. By all counts, Sri Lanka still remains a tourist paradise.
Secondly, the largely export-oriented policy of the Government was kept stable in terms of both goods and services. The country continued to export its share of world tea, textiles, foodstuffs and apparel, while foreign exchange inflows continued to come from overseas workers' remittances. By concentrating on providing its local population with staple supplies of home grown rice, grain and other agricultural products, Sri Lanka averted a food crisis and also saved valuable foreign exchange which could have been used up in importing these commodities in the wake of the food and economic crises that have affected most parts of the world. Amazingly, after all it has gone through, the inflation rate in Sri Lanka is just between 5 to 6 percent.
With Presidential elections in the process, the stakes are high, and the political atmosphere in Sri Lanka could not be more charged than at the present time. The two main opponents are doing everything they can to gain political mileage by maligning each other's campaigns and interests. On the one side, we have President Mahinda Rajapaksa who has been in power since November 2005. On the other side, we have the hero of the war, former military chief Sarath Fonseka who has just recently forayed into politics, buoyed by the rising popularity he has enjoyed since the final victory over the LTTE last year.
It's all up to the winning candidate to make the best of the present situation. 
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