<Abstract>
Sri Lanka is one of the lower-middle income countries in the South Asian region, yet
it has simultaneously experienced ‘High Human Development’. This is all the more
remarkable given the 1983-2009 civil war. This paper has two objectives. First, it
reviews the reasons for Sri Lanka’s considerable human development achievements
while still being a low middle income country by synthesizing the existing body of
literature on Sri Lanka’s socioeconomic development. Second, it provides an
assessment of contemporary human developments. How has Sri Lanka fared in the last two decades? We pay special attention to the country’s health and education
policies. Based on a review of secondary sources we conclude that since the end of
the civil war, Sri Lanka has experienced a substantial peace dividend. The task for Sri
Lanka is to build on this peace dividend, to provide employment in the northern and
eastern areas as well as to foster inclusive development throughout the country. The
fact that Sri Lanka is classified as a high-human development should be no reason
for complacency, given the remaining socio-economic and socio-spatial challenges.
Promising industries are medical tourism, maritime logistics and agri-business.

Keywords: Sri Lanka, Human Developmemt, Welfare Policy, Subsidy Policy, South Asia