Sri Lanka was operating well below potential, she told the annual sessions of the Sri Lanka Economic Association on Saturday in a presentation on the causes and consequences of regional inequalities.
"We're naturally endowed with a varied, nutritious diet - yet we have malnutrition," she said.
"We're busy killing each other when we could work together in unity in diversity," she added, referring to the quarter-century long war for a separate Tamil state in the island's north and east by the Tamil Tigers.
Free Lunch
Dias Bandaranaike decried the widespread attitude among Sri Lankan of a 'free lunch' – that the state was able to freely subsidise goods and services and bore resp