ABSTRACT
The search for economic development has been a difficult one for Sri Lanka. The Mahaweli lands produce 22 percent of Sri Lanka's rice crop, 13 percent of its chilies, 31 percent of its Bombay onions, and 17 percent of its electrical power. The defeat of the Liberation Tigers of Tamil Eelam led many to believe that Sri Lanka would finally be able to focus on economic development. While the economic damage inflicted by the tsunami appears to have been relatively limited, the coastal fishing communities were devastated by the destruction of their infrastructure. The 2002 cease-fire agreement gave the economic-development reforms an opportunity to foster economic growth in the economy. The gross domestic product growth rate was -2.5 percent in 2001. The creation of the first free trade zone at Katunayake and ten additional export promotion zones reflects the desire of the government to increase both domestic and foreign investment.
