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Country Guide > Indian Subcontinent > Sri Lanka | |
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Business Profile Economy Although some parts of the economy have suffered severe dislocation as a result of the civil war – especially the once promising tourist industry – Sri Lanka has managed to accommodate the conflict to the extent that the economy performed reasonably well during the last five years. This is reflected in the GDP growth of 5 per cent in 2004. However, inflation rose slightly to 7 per cent in 2004 and unemployment also increased statistically. Agriculture sustains about one-third of the working population and directly contributes around 20 per cent of GDP. The main cash crops are tea, rubber and coconuts, which provide over 75 per cent of export earnings; rice is grown mainly for domestic consumption. Forestry and fishing are also important. The main industrial sectors are mining (gemstones and graphite being the principal minerals), and manufacturing. Iron ore, limestone, clay and uranium ore are also present in commercially exploitable quantities. Hydroelectricity is the main source of power, supplemented by imported oil. Important manufacturing industries include cement and textiles, both of which are valuable export earners. In the service sector, the growth of tourism has been stunted by the civil war, but banking and insurance have both been performing well. Since the mid-1990s, successive governments have followed the usual prescription of market-oriented policies – privatisation and deregulation – while seeking to build up potential export-earning industries. This strategy was slow to show results at first, but the government persevered and some benefits are now beginning to materialise. The recent peace talks and ceasefire between government and rebels has boosted business confidence both at home and abroad, and alleviated Sri Lanka’s chronic shortage of investment capital. The government is now hoping to consolidate its progress by further deregulation, fiscal reform, and privatisation: although it has all but pulled out of manufacturing, the state still owns 90 per cent of the island’s land and the bulk of its utilities. India, Japan, the USA and the UK are Sri Lanka’s major trading partners. Business Business attire is casual. English is widely spoken in business circles. Appointments are necessary and it is considered polite to arrive punctually. It is usual to exchange visiting cards on first introduction. Office hours: Mon-Fri 0800-1630. Commercial Information The following organisation can offer advice: National Chamber of Commerce of Sri Lanka, 450 DR Wijewardena Mawatha, Colombo 10 (tel: (5) 374 801-4; fax: (1) 268 9596; e-mail: sg@nccsl.lk; website: www.nccsl.lk); or Ceylon Chamber of Commerce (Sri Lanka Tourist Hotels Association), 50 Navam Mawatha, Colombo 2 (tel: (1) 245 2183 or 232 9143; fax: (1) 243 7477 or 244 9352; e-mail: info@chamber.lk; website: www.chamber.lk). Conferences/Conventions For further information, contact the Sri Lanka Convention Bureau, Hotel School Building, 4th Floor, 80 Galle Road, Colombo 3 (tel: (74) 713 500/1 or (1) 244 0002; fax: (1) 247 2985; e-mail: slcb@sri.lanka.net). |