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Transport Sector Driving Economic Activity in Sri Lanka: Opportunities and Challenges

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  • T. Lalithasiri Gunaruwan

    (T. Lalithasiri Gunaruwan, Senior Lecturer in Economics, Department of Economics, University of Colombo, Colombo 03, Sri Lanka. Email: tlgun@econ.cmb.ac.lk)

  • D. Harshanee W. Jayasekera

Abstract

An expectation to double the per capita income in five years through a sustained GDP growth rate of 9 per cent could only hold ground under very favourable economic conditions. On the one hand, this projected acceleration of economic activity, if practically realized, would demand a substantial amount of investment expenditure which could cause a widening of resource gap leading the economy into a debt trap. On the other hand, if the service sector including the transport sector could not augment to meet up the investments and expected output expansions, the targeted growth itself could be at risk. Neither scenario would be favourable. A way out of this apparent impasse is to increase investment productivity—by way of being observant in capital spending and improving the trickle-down effect of investment expenditure against mere capital accumulation.

Suggested Citation

  • T. Lalithasiri Gunaruwan & D. Harshanee W. Jayasekera, 2012. "Transport Sector Driving Economic Activity in Sri Lanka: Opportunities and Challenges," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 13(2), pages 291-311, September.
    • Handle: RePEc:sae:soueco:v:13:y:2012:i:2:p:291-311
    DOI: 10.1177/1391561412457279
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    References listed on IDEAS

    as
    1. Joyce Dargay & Dermot Gately & Martin Sommer, 2007. "Vehicle Ownership and Income Growth, Worldwide: 1960-2030," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 143-170.
    2. Ms. Anita Tuladhar & Markus Bruckner, 2010. "Public Investment as a Fiscal Stimulus: Evidence from Japan’s Regional Spending During the 1990s," IMF Working Papers 2010/110, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Transport; planning; public investment productivity; economic development; sustainability; Sri Lanka; E2; H54; L91; O18; Q56; R4;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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