Sri Lanka ancient economy may have been hit by monetary debasement: economist

Feb 10, 2009 (LBO) - A period of prosperity based on international trade, under an ancient Sri Lankan king may have declined following monetary debasement, as well as a decline in external trade, a top economist in the island said.
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Central Bank deputy governor W A Wijewardene says, during the reign of king Parakramabahu the Great (1153-1186) Sri Lanka may have been the most prosperous nation in the world, when he ruled from Polonnaruwa.

This was estimated by historians, by taking into account the vast amount of capital projects carried out during his time, which was estimated to have been greater than in China which was the most developed nation in that time.

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The economic activity, or gross domestic product, needed to support such activity would be a multiple of that expenditure.

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Sri Lanka's prosperity had been brought by King Parakramabahu by building irrigation works and developing agriculture, boosting international trade and having a foreign policy that made the island an important centre.

According to Culawamsa, a historical narrative, King Parakramabahu had studied the writings of Chanakya or Kautilya, probably the world's first economist, Wijewardene said, delivering the Independence Day anniversary lectu

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