The paper examines the evidence for Sri Lanka's economic growth in many sectors, over the past two decades, notwithstanding the setbacks witnessed during the period. This economic growth is, by and large confined to the urban sector, and within it, the western province. In the rural sector, poverty, accompanied by the alienation of the educated rural youth from the economic mainstream, the expanding private sector, presents the "flip side" of the economy. These trends are reflected socially in the emergence of a new urban middle class, which champions a consumerist ideology and a western ethos. The rest of the country, though influenced by the ideology, is unable to embrace it, given the lack of resources and access to the domain of the NUMC. The paper also argues that the formal private sector has, in the main, failed to go beyond its narrow urban focus and bias which has alienated the educated rural youth from the economic mainstream. Their social alienation or exclusion is likely to have far-reaching implications.