<P> Sri Lanka has met the Millennium Development Goal (MDG) target of halving extreme poverty and is on track to meet most of the other MDGs, outperforming other South Asian countries . Sri Lanka experienced a major decline in poverty between 2002 and 2009--from 23 percent to 9 percent of the population . Despite this pockets of poverty continue to exist . An estimated 9 percent of Sri Lankans who are no longer classified as poor live within 20 percent of the poverty line and are, thus, vulnerable to shocks which could cause them to fall back into poverty . </P> <P> Sri Lanka has one of the lowest tax - to - GDP ratios in the world, and creating jobs for the bottom 40% has become a challenge . Sri Lanka also faces a challenges in social inclusion, governance and sustainability . </P> <P> According to government policies and economic reforms stated by Prime Minister and Minister of National Policy and economic affairs Ranil Wickremesinghe, Sri Lanka plans to create a knowledge - based social market economy and an export - oriented economy as well as the Western Region Megapolis a Megapolis in the western province to promote economic growth . The creation of several business and technology development areas island - wide specialised in various sectors, as well as tourism zones are also being planned . </P> <P> Since becoming independent from Britain in February 1948, the economy of the country has been affected by natural disasters such as the 2004 Indian Ocean earthquake and a number of insurrections, such as the 1971, the 1987--89 and the 1983--2009 civil war . Between 1977 and 1994 the country came under UNP rule in which under President J.R Jayawardana Sri Lanka began to shift away from a socialist orientation in 1977 . Since then, the government has been deregulating, privatizing, and opening the economy to international competition . In 2001, Sri Lanka faced bankruptcy, with debt reaching 101% of GDP . The impending currency crisis was averted after the country reached a hasty ceasefire agreement with the LTTE and brokered substantial foreign loans . After 2004 the UPFA government has concentrated on mass production of goods for domestic consumption such as rice, grain and other agricultural products . however twenty five years of civil war slowed economic growth, diversification and liberalisation, and the political group Janatha Vimukthi Peramuna (JVP) uprisings, especially the second in the early 1980s, also caused extensive upheavals . </P>

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