INTRODUCTION

Of all the developing countries, Sri Lanka is often cited as a country exceedingly advanced in social development. Low-cost education, medical service, food aid to broad sections of the population, various public charges reduced to low levels, agricultural aid policy, and other measures continued until the start of economic liberalization in 1977. Because of this, the economic space for non-governmental organizations (NGOs) in the areas of medical service and education had been limited. However, social welfare budgets were substantially cut after 1977, while the government promoted the privatization of medical service and education. The deterioration in the political and economic environments due to the falls in prices of plantation crops, the activities of anti-government guerrillas, and other reasons, had begun early in the 1970s, and it may be said that the economic liberalization of 1977 provided momentum to the expansion of the scope of economic activities of the NGOs. According to a survey of the NGOs which had been established in the country by 1990 (IRED 1991), 60 per cent had been set up after 1978.

The purpose of this chapter is to describe how the NGOs acted and what role they played between the government and residents in Sri Lanka, where the government had a clear intention to provide services widely and at low prices. What was wanted of NGOs by the state, which was the main provider of resources, and the inhabitants, who were their recipients?

Even before 1977, the activities of NGOs were indispensable where government welfare policy was lacking, although the areas of their activities were circumscribed. In the following sections the writer will clarify the relations of NGOs with the government and the inhabitants by studying on a period-by-period basis the welfare policy of the government and the changes in its development policy, together with the development of NGO activities.