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SRI LANKA
! SERENDIPITY Post Tsunami & Civil War
A Globetrotters View
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Issue No 12

This stunning island nation of 63,000 sq km is replete with legends of kings, concubines, and medieval merchants who described this land with the Sanskrit word Swarnadip or Serendipity upon discovery of the islands vast wealth in spices, gems, and surrounding beauty. The starting point in this pear-shaped island is with the buzz of capital city Colombo, then travels round long, clean coastal beaches; up to the highlands - rich in tea, rubber, and palm oil - and seven fantastical UNESCO world heritage sites; then east to deep tropical jungles ... home to the worlds largest population of leopards and sloth bear, teeming birdlife, larger-than-life lizards, elephants, and more.

Known as British Ceylon for centuries, the British, Dutch, and Portuguese came in search of the deep water port, rubber, tea, and spices. British Admiral Horatio Nelson described Trincomalee harbor (now a surng paradise) as the nest deep harbor in the world (evidently he and Sir Stamford Rafes, who exclaimed the same of Singapore just to the east at about the same time in the 18th century, had not yet met to compare notes?). Yet before this, there were far richer kings, like King Kasapa who ruled Sigiriya (Lion Rock) in the 5th century CE. Having killed his father to inherit the throne he moved his palace atop an extinct volcano. Entering this fantastical lion rock (left) aptly named, as the gigantic entrance is carved disney-style in the shape of a lion mouth and claws. The climb up the 3 mile summit is no disney ride but it takes you to the palace carved entirely out of volcanic rock with beautifully painted ladies (frescos) on all sides and an extensive network of gardens, reservoirs, rooftop ballroom, and bathing network, once the respite of the King and his 500 concubines. With stunning views of Sri Lanka from rooms for several thousand attendants.... it is no wonder he rarely left this rooftop mansion! Nowadays, serendipitous Sri Lanka has taken the best of its colonial heritage, risen above the Tsunami of 2004 (which destroyed half its coastline and nearly 1mm people) and left behind its 30-year struggle with the LTTE ( better known as the Tamil Tigers).

You will be welcomed at the airport with a sign saying Welcome to Sri Lanka where (blank) miracles happen. President Rajapaksa has ordered the word small be taken out of all signs ... decreeing that whats happening now is more than a small miracle. With 92% literacy, capital savings rate of 22%, a democratic republic, a collaborative climate, and a proud population that exudes buddhist civility accompanied by profound drive to regain their place as one of Asias economic elite; well believe it.

There are hyper-motivated clusters of business, academic, economic development, and government leaders working in sync to return Sri Lanka to its pre-civil war glory as THE toprated economy in Asia his smallish but motivated country, with population the size of Australia (20MM), With world-leading economic growth of 8% and recent ranking by Newsweek as the 4th best country in Asia for investment ( behind Thailand, China and the Philippines), Sri Lanka is gearing up. Foreign Direct Investment in railroads, airports, and schools is owing from India into the Tamil NORTH.... crucial to maintaining stability in that area, and important to trade .... now that a FREE TRADE AGREEMENT exists between these two border-sharing countries. Fishing (on stilts above) and tourism (up +64% this year to 800,000 visitors) is being developed in the EAST -- now freed from Pirates -- with Special Economic Zones and port development. The new port is partially funded by the Chinese (who in exchange will park their navy there). The SOUTH is seeing more land freed from land mines for leopard safaris and birdwatching ... virgin territory. Agriculture and Dairy are being developed in the CENTRAL highlands, with processing plants for wheat, palm oil, and milk going up to take advantage of bumper harvests that will appear among previously uncultivated (military) areas around Jaffna. We interviewed Mr. Suriyapperuma (Suri, at left ), Director General of Pyramid Lanka, who has garnered 56% marketshare in Sri Lankas cake, bakery, and ice cream sectors and recently bought a plant from UNILEVER to export hydrogenated palm oil . He believes the market for sugar is wide open with only 35% of needed capacity made internally.

Sorely needed road construction across the country is happening at a dizzying pace which will improve distribution and tourism and enable job skills to travel to cities. Mr. DeSilva, pictured above, with the 6000 employee MAGA Construction rm, indicates construction is happening, but could happen faster if bureaucracy were slightly more organized (i.e. one minister vs. three handling the same project). Nevertheless 80% of MAGAs billions in revenue is due to road construction. Today, youll see women like this one at left carrying 50 lb. bags of tea on their head to the nearest bus station to deliver their tea to town.

A new model city (Hambantota) is being built as an eco-friendly Dubai with port, airport, Shangri-la hotels, high-tech parks, modern schools, billion dollar apartment complexes, six-lane roads, entertainment, and high mobility ber optic cable networks (!! carrying1.3 terrabytes per second!!). The idea is to shift population from crowded Colombo to Hambantota with the allure of the above, and create jobs in aviation, ports, and service sectors. Working closely with the Presidents son (in charge of the Hambantota development) are business leaders like Harshe Subasinghe (right), an Articial Intelligence PhD from City University London, and CEO of CodeGEN, a software company that provides end-to-end solutions (called TRAVELBOX) to manage tour operations. Harshe was a victim of the civil war when Sri Lanka was forced to close universities in 1987. Finding his way to the UK, he garnered odd jobs to work his way through college. He started his own business on the side while working in a travel agency and wrote the EXPEDIA booking engine which led to the widely used GDS system for all tour operators and the Worldspan ight booking system! Today his 150 employee company of math geniuses thrives, with some of the largest worldwide tour operators as clients.

Sri Lanka

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Although Sri Lanka enjoys a 94% literacy rate with all education paid for by the government (except uniforms, books, supplies and shoes... which we purchased for these kids as christmas gifts), its ratio of skilled to unskilled labor is 20:80. Therefore, Mr. Soysa, the Deputy Minister of Education (pictured below), has issued open invitations (with incentives) to foreign universities to set up shop in Sri Lanka to ll the labor gap. Needs for construction management, entrepreneurship, export management, power management, and agriculture, are top on the list. Sri Lankans tell us they have accounting and math/engineering in their blood with a strong pool of talent in those areas that enable them to excel in business process outsourcing, but are poorly equipped in other areas to meet job requirements. The country plans to introduce a scheme to reverse the brain drain and obtain knowledge and services of some 1.5 MM Sri Lankans living abroad (mostly in Oman) who remit the vast majority of foreign reserves to this country. The issue is making it easier to reissue Sri Lankan citizenship, as many have become foreign nationals, or allow dual citizenship, similar to Europe and America. Despite only one medical university, the healthcare system is quite strong with most surgeons schooled abroad. Notably, imports of high-tech medical equipment is good business and we were impressed that Sri Lanka is now becoming wheelchair compliant with all public buildings.

We met with a number of American Chamber of Commerce members (left) who have invested in Sri Lanka and asked their opinion about the downside to doing business in Sri Lanka or mistakes foreign companies might make when they enter the country. They indicated labor laws are difcult to understand and largely focused on the worker ... one cannot hire and re at will, but can contract. The government owns 80% of the land, and provides a land-lease arrangement for only 30 years. Government corruption can be an issue but is openly discussed and gradually disappearing. Cultural aspects are often overlooked by foreigners; Sri Lankans are an indirect bunch, and offended by the direct American approach. Lunch is sacred and only social, so business lunch is non-existent. Importantly, one needs to tolerate weddings, festivals, and funerals as a priority whereby the entire town and company may be invited requiring a loss of 7 days of your entire workforce for each of these events. Additionally, the entire country shuts down for their New Year for 2 weeks in April. We witnessed several weddings, usually held in hotels (e), often happening early in the morning on a weekday! Sri Lanka claims a democratic political environment ---- albeit some argue it is ruled from the dinner table with top ministerial posts appointed to family members. Nevertheless, youll nd this country an agreeable place to do business, with a clean private sector accompanied by the often-heard bribery among police and licensing among government ofcials (but getting better). Despite this, the Rajapaksa family is popular. President Rajapaksa hails from a humble (vs. royal) background, and is a savvy political leader who gains support from key inuencers among the all-important buddhists, businesses, and backstreet villagers. He is pictured below atop a van barreling through the village with buddhist monks on loudspeaker proclaiming blessings for his leadership. One could not ask for better PR. ...as a parallel, picture Italys Silvio Berlusconi being paraded among the streets of Tuscany with the Pope proclaiming his benets... not likely,but its a parody. Rajapaksa is indeed credited with overcoming the LTTE or Tamil Tiger rebellion. Despite horrid civilian losses, Sri Lankans are quick to remind us the LTTE were among the largest and most notorious of human trafckers, drug trafckers, pirates with large pirate vessels perusing the Indian Ocean between Africa and India, and arms suppliers to Iran/ Pakistan/Somalia. With the help of U.S., U.K, and Chinese anti-terrorist groups, Sri Lanka was nally able to obliterate (and they mean obliterate) all of the LTTE leadership. They note even the Tamils will NOT MISS these Tigers as for the rst time in 30 years 800,000 child refugees forced into army camps at age 5 are for the rst time experiencing a real education in new technical training colleges (including a Fredric Liebert leadership training program), healthcare, mobile phones, videogames, movies, television, shopping malls, and public transport. At the same time their provincial government have earned two (out of 9) signicant seats in national government and all farmers in the North receive subsidized fertilizers and seed. Go Figure... which world would you prefer? Serendipity to be sure.

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