BY EDWARD THEOPHILUS

Before the European invasion, the economic policy of Sri Lanka was believed to be maintaining a production economy to endure people and make savings for the future. The definition of production is a dynamic aspect that product creation related to agriculture, industry, construction and services. It is an assumption based on historical views as interpreted by historians that Sri Lanka had a production economy and such policy was not written in any document, but many written literature books endeavoured to explain Sri Lanka was a prosperous economy based on many productions. The production economy in history gave priority to absorbing grains and related industrial products such as mamoty, knives, plough equipment and many others. The policymakers of historical administration were not economic scholars, and they used traditional knowledge for policy determination based on the general conduct of people.  The existing society gave directions for economic activities based on traditional knowledge of products and services.

The production policy was not officially declared by the government that existed at that time. This focus has been changed during the foreign controls of the country, the foreign control means the European controllers and various factors may have contributed to the change in the policy focus from time to time. It is quite difficult to appraise the policy directions of invaders as the purpose of invaders concerned with many aims, which were not disclosed and were a secret to the public who were not too much concerned about politics like today. The colonial policy did not concern with the economic prosperity of people. Invaders did not express policy concerns about the economy and it can imagine that they had hidden motives for the invading activities. For example, the Portuguese aimed to introduce Catholicism. 

According to historical analysts, the major reason to invade the country was to promote trade between invading countries and Sri Lanka, now it is easy to assume that the invaders were concerned with a hidden policy focus that was not disclosed to people, but it was a secret administration strategy of invaders. This assessment has been made by me assessing the closed economic activities in the colonial period.

Under the leadership of domestic kings and Indian rulers, the concept of production economy was generally accepted and gave priority to the concept as it was supporting the prosperity of the public. The priority of Indian invaders on the available information disclosed that they were also traders and they had no declared reasons to stop domestic agriculture and related industrial work. In terms of historical literature, the policy of Indian invaders was not concerned to work against the aspect of the production economy.

The promoting trade between Sri Lanka and European invaders gave new elucidation to the concept of production economy, which meant that producers could have earned profits than hoarding production in material format and the opportunities to participate in international trade was a vital opportunity for domestic producers, however, the concept of production economy has been diversified under the European invaders because they too had diversified aims of invasion.

The application of the concept of welfare economy by European invaders especially the British rulers had potential to disadvantaged people because the welfare economic policy of them encouraged promoting domestic producers.  Invaders generally focus to promote between Sri Lanka and in their countries, and they were forced to apply the concept of welfare economy in Sri Lanka as democratic aspects of invading countries discouraged imposition of the use of domestic labour and increase domestic production to gain profits. The negative effect was local producers animated to depend on welfare payments despite hanging in the concept of production economy, this nature appeared in Western countries after 1980s.  

There has not been accomplished to radical changed in the fundamental policy aspect of the Western invaders as the any activities of them were subject to critical evaluation of the policy development and implementation.

Since the era of Donor more system which introduced certain feature of Western democratic administration the concept of production economy has gradually been locked by the welfare concept of especially the British rulers. Recent negotiation with the International Monetary Fund and the outcomes of such negotiations highlighted in media it is not clear whether IMF has focused on the tradition concept of production economy.