Two weeks ago, we were in the Eastern Province, where we attended two seminars — one at Eastern University and the other at Southeastern University. Both focused on Sri Lanka’s transformative growth and the role of regions in shaping it. We also spent a few days exploring Batticaloa, Passikudah, Arugambay, and the Kumana National Park. [...]
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Our discussions with Vice Chancellors, faculty members, and students gave us valuable insights into the provincial economy. These perspectives were further deepened by our own observations and experiences along the Eastern coastal belt.
‘Pada Yathra’ from the North to Kataragama.
I was reminded that the university students we interacted with will one day have to face the realities of the world of work. Some of them, especially female students, may end up confined to household responsibilities, leaving behind the knowledge and skills they gained through higher studies. Labour force data shows that only 3 out of 10 working-age women are employed, even though nearly 3 out of 4 university students are female.
Even when they wish to work, many must be located where their knowledge and skills can be productively applied, allowing them to pursue social aspirations and share in the benefits of growth to which they contribute. Yet, I remain doubtful about how far the Eastern economy—still rooted in agriculture, fisheries, and tourism in their traditional forms—can meet this need.
The journey was a reminder that development is not only measured by national averages, but also by how regions contribute, how local strengths are harnessed, and how growth spreads across space. Where growth accelerates, people with knowledge and skills gather — and in turn, they drive growth forward while sharing in its benefits.
In Sri Lanka, this is where the real challenge begins: we have often spoken about growth, but not always about whether that growth is transformative, inclusive, and spatially balanced.
About 15 years ago, the World Bank published a report on Sri Lanka’s spatial growth inequality analysed within the subject area of economic geography – how growth has concentrated across space. The report titled, “Sri Lanka: Reshaping Economic Geography – Connecting People to Prosperity” showcased an impressive picture of the country.
The World Bank report turned Sri Lanka’s economic activity into an impressive landscape map. In this graphical map, a smaller area of Colombo is seen like a steep mountain because its “GDP per square km” is far higher than anywhere else in the country.
In contrast, most of the island stretches out like a wide, flat plain, showing that economic value creation outside Colombo is much smaller. This sharp difference in “economic height” highlights how prosperity is concentrated in one area, while the rest of the country remains relatively low in density.
Provincial GDP data shows that over 42 per cent of the country’s GDP is generated in the Western Province, mainly in Colombo and Gampaha districts. The North Western and Central provinces each contribute just over 10 per cent, while the remaining six provinces together account for little more than one-third of national output. Alongside this, 28 per cent of the country’s population also resides in the Western Province, both driving growth and sharing in its benefits.
The Eastern Province, stretching along the coastal belt, is no exception. Despite its natural beauty, ports and lagoons, fertile vegetation, vast paddy fields, and rich social and cultural diversity, all these assets remain largely untapped rather than transformed into economic reality.
The contrast is striking. The Western Province economy is defined by industries and services, finance and business, modern infrastructure, and strong national and international connectivity — all hallmarks of modernity. By comparison, the Eastern Province economy is still identified mainly with agriculture, fisheries, and a modest level of tourism.
Its ports and lagoons have created little usable value, even though they face one of the world’s major economic hubs across the ocean — East and Southeast Asia.
Internal connectivity is also weaker. The potential Colombo–Trincomalee Economic Corridor, once a promising physical planning concept, was abandoned due to political decisions and lobbying pressures. Meanwhile, the lagoons and lakes too remain in “sleep mode,” with little active economic use.
The tourism industry that expanded in the post-conflict years has remained narrow, focused mainly on “tourist hotels” and seasonal peaks. In the Eastern Province, hotspots such as Nilaveli and Passikudah operate largely in isolation, with limited linkages to the local economy or community.
Arugambay, however, tells a different story. Without significant government intervention, it has grown into a community-based tourism hub, driven by a surfing culture and the active participation of tourists, local businesses, and residents.
On the surface, Arugambay appears vibrant, with crowds of tourists enjoying the beach and roadside cafés, and hundreds of businesses catering to their needs. Yet beneath this energy lies fragility.
The area risks becoming unmanageable without the presence of security forces. Of more than 300 tourism-related businesses, fewer than one-third are formally registered, leaving taxation and regulation largely absent. This highlights the government’s weak capacity to integrate tourism into the formal system and ensure accountability.
Regional tourism growth must go beyond attracting visitors to seasonal hotspots. It should be built as an integral part of the local economy, enabling communities to benefit meaningfully from the growth they help sustain.
The journey from Batticaloa to Arugambay was more than a road trip; it was a passage through some of the most distinctive landscapes and livelihoods of Sri Lanka’s Eastern Province.
As we moved away from Batticaloa, the scenery gradually shifted from the rhythm of an urban lagoon town to open stretches of coastal road, paddy fields, and quiet inland settlements. The journey itself reminded us that the East is not a single place, but a chain of economic and social spaces, each with its own character, opportunities, and constraints.
Along the way, the road revealed the everyday face of the region — fishing villages, small shops, roadside stalls, and communities living close to the sea and the land. There was a sense of calm, but also of untapped potential. In many ways, the route between Batticaloa and Arugambay captures the broader development question of the East: how to connect natural beauty, local enterprise, and infrastructure in a way that creates lasting value for the people who live there.
Trash on either side of the road was an ugly scene. Despite the “Clean Sri Lanka” initiative, roadsides of the highway have become a dumping ground for trash – polythene, empty water bottles, cans, snack wrappings and many more. And trash issue seems extended towards the Kumana National Park as well.
It was also the season of “Pada yathra” – foot pilgrimage – when thousands of Hindu devotees journeyed on foot from the North to the Kataragama temple, passing through the Kumana and Yala National Parks. On the very first day, the Wildlife Office at the entrance reported more than 15,000 devotees entering the park.
Economic growth is uneven across the country, with some places advancing while others lag behind. This is not simply about resources or opportunities being unused — there are deeper economic forces at play.
Many would see resources and opportunities as the underlying factors of growth; then, they wonder why such resources and opportunities are being under-utilised or not utilised at all.
To understand why competitive businesses and skilled people gather in places like Colombo but not in other regions, we need to look at the drivers of spatial growth. Growth tends to concentrate where firms and people benefit from clustering together; where connectivity through transport and communication make it easier to connect to markets, both national and international; where talents can move freely to opportunity, and where markets are large enough to sustain expansion. Apparently, there is something that governments have to do – make the markets work.
(The writer is Emeritus Professor at the University of Colombo and Executive Director of the Centre for Poverty Analysis (CEPA) and can be reached at [email protected] and follow on Twitter @SirimalAshoka).
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