The Sri Lanka story

Many people still think of it as Ceylon, where the tea comes from. Many have failed to notice its success story under the name of Sri Lanka and as a republic for the past decade. To resume that success in the face of recent setbacks this island off India needs recognition and support as a nation clinging to hard-won democratic procedures in the quest for fruitful change. There is much to be noted besides the inevitably stressed reports of scattered violence surrounding Junius Richard Jayewardene's victory this week as the republic's first directly elected president.

Evidence of unrest is not surprising in a land of hotly opposed political factions and with an unresolved problem of equal rights for minority Tamils and majority Sinhalese. But the news is or should be that here is a small country whose people achieved PQL (physical quality of life) rankings high on the international scale despite low per capita income. And here is a government seeking to preserve free education, free health care, and other expected attributes of a constitutionally designated ''democratic socialist republic'' - while reaching out toward free-enterprise means of rescuing an economy staggered by oil prices and other vicissitudes.

The vote for Mr. Jayewardene suggests a continued effort away from centralized economic control. He has become a symbol of a less ''socialistic'' approach as the prime minister who, in 1978, was given the new office of executive president to which he has now been elected. He has sought to expand development and exports with international assistance. He has tried at the same time to make welfare state savings through such means as limiting food and fuel subsidies to those in need and excluding the more affluent who were also found to be receiving them.

Robert McNamara when head of the World Bank noted that social justice was an aid to economic progress, as exemplified in Sri Lanka. Last year the country's finance minister warned against greed by members of the private sector that has benefited from the present government's open economic policies. He said they must contribute from their ''terrific profits'' to the mobilization of local revenue and local resources necessary for Sri Lankan advancement.

Social justice and free enterprise. The twain are meeting in Sri Lanka, and the outcome could be an example to lands that act as if you can't have one if you have the other.

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