This report traces the causes of poverty in Sri Lanka and provides policy recommendations, especially for areas of conflict. It argues that agriculture suffers from low productivity and competitiveness.

This report traces the causes of poverty in Sri Lanka and provides policy recommendations, especially for areas of conflict. It argues that agriculture suffers from low productivity and competitiveness. Nonfarm sectors face infrastructure and other constraints, such as expensive electricity. Education and training are not geared to the labor market. Certain groups are particularly vulnerable to poverty, including those with poor health or little education, and those whose parents are of low social status or have few social contacts. Location-specific factors hold the key to progress against poverty. An integrated development policy framework is needed that emphasizes infrastructure to reduce regional inequalities and help poor localities link up with growth centers.