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SRI LANKA

Sri Lanka at a Glance


    

Capital: Colombo Area: 65,606 sq. kms. Population: 21,128,772 Languages: Sinhala, Tamil & English. Sinhala is official & national language spoken by 74% Sri Lankans. English is widely used & understood in tourist areas. Currency: Sri Lankan Rupee (KLR) Climate: Warm & Sunny, year-round, with an average of 27 C in Colombo. year27 Religion: Buddhism - 69% Hinduism 16% Islam 8% Christianity 7%

  

Sri Lanka at a Glance (Contd.)




Literacy: Age 15 and over can read and write. (Education Chart) (Education Chart) -Total population: 90.7% -Male: 92.3% -Female: 89.1% International Airport: Bandaranaike International Airport, Katunayake (34km to north of Colombo) Transport: Island-wide, inexpensive railway & public and private bus Islandservice. Luxury vehicles, radio-controlled cabs, & auto rickshaws also radioavailable. Medical Services: State-owned hospitals in all parts of country provide Statefree medical & surgical attention. Sri Lanka has the highest per capita income in South Asia with an income per head of $1,350.

Political Overview


Democratic Country Structure of Government: Mixture of Presidential & Parliamentary Government: System. Head of state: President Presidents Deputy: Prime Minister Ruling Party: Coalition of Left wing & Right wing President: Mr. Mahinda Rajapaksa

Current Economic Overview


  

GDP at current market prices: Rs. 4,411 Billion Real GDP Growth of 6 % in 2008. Banks: The Banks have very low Penetration  Total no. of Commercial Banks 22  Banking density 10.2 per 1 lakh people Inflation: Lowest 2.9% in April 09 Highest 28.2% in June08 Exchange Rate: 1 Dollar = 110 KLR (Avg) The highest contribution to the GDP is that of the Services industry in Sri Lanka. The major industries are:  Transportation  Manufacturing  Agriculture

 

Legal Overview
 

Board of Investment (BOI) is the Apex body for all Investments. The agreement with the BOI entitles the specific incentives granted to an eligible company and it remains valid for the entire life of the enterprise. Bilateral investment agreements supported by a constitutional guarantee, provides strong protection for foreign investment for Sri Lanka. Bilateral Investment Protection Agreements exist between Sri Lanka and India, China, France, Germany, Malaysia, to name a few. Corporate Laws: Sri Lanka is also a founder member of the Multilateral Investment Guarantee Agency (MIGA). This provides further safeguards against non-commercial risk. non-

Demographics


Population:  Total Population: 21,324,791  Population Growth Rate: 0.904%  Birth Rate: 16.26 births/1,000 population  Death Rate: 6.07 deaths/1,000 population Age Structure:  0-14 years: 23.9%  15-64 years: 68% 15 65 years and over: 8.1% Median Age:  Total: 30.9 years Urbanization: 15% of the total population Life Expectancy:  Total population: 75.14 years  Male: 73.08 years  Female: 77.28 years Sex Ratio:  Under 15 years: 1.04 male(s)/female  15-64 years: 0.96 male(s)/female 15 65 years and over: 0.87 male(s)/female  Total population: 0.97 male(s)/female

 

Largest Cities
Name 1 2 3 4 5 6 7 8 9 10 Population Colombo, Western Galkissa, Western Moratuwa, Western Jaffna, North Eastern Negombo, Western Pita Kotte, Western Sri Jayewardenepura Kotte, Western Kandy, Central Trincomalee, North Eastern Kalmunai, North Eastern

Workforce
 

The Sri Lankan work force accounts for 35% of the total population. population. Foreigners can be employed in Sri Lanka but only with the approval of the Govt. Authorities. Usually such approvals are given for companies formed with the approval of the Board of Investment of Sri Lanka.

IT / ITES


Sri Lankan IT industry has witnessed a remarkable growth in the last ten years. The Sri Lankan IT/Software Industry can be divided into 3 main areas/segments:  1. Application product market  2. Software services  3. Off-shore development services OffDue to the experience gained in the Software Services area, the country has a good talented pool of system integrators and application support personnel. There are currently 75 Software companies in Operation.

Infrastructure
Roads: Roads:


As of 2007

In Sq. kms.

National roads carry over 70 percent of the traffic in Sri Lanka. 65% of total population stays in Rural areas and they use roads for traveling to schools, colleges, markets as they are quite far-off. farAlthough Sri Lanka enjoys a higher road density than in many developing countries, the conditions and standards of the roads are inadequate to meet rapidly growing freight and passenger traffic. More than 50% of the national roads have poor or very poor surface condition and many are seriously congested.

Paved Roads Access to All-SeasonRoads Total No. of Ports

81

65

Total No. of Airports

International

Infrastructure (Contd.)
Railways: Railways:

The rail network is not strong. The passenger & Freight Transportation is 8% and 5% respectively. The railways continue to face serious competition from road transportation. Since 1989, security threats have led to the suspension of services on the only two profitable lines: the Northern Line beyond Vavunia, and the Talaimannar Line.

Infrastructure (Contd.)
Ports: Ports:


Sri Lanka has several large ports such as Colombo, Galle, Trincomalee, and Kankasanthurai, as well as harbours.

The Port of Colombo, the countrys premier commercial port, is one of the better performing ports in Asia. It handles both conventional cargo as well as containers, and has been acknowledged as one of the most economical ports in the region. The Colombo Port handled 277,268 twenty-foot equivalent units (teu) in twentyMay 2009.

Colombo Port


According to the Lloyds Register the Colombo Port ranks as No. 1 port of South Asia and the 26th in the World. Features:  Throughput has grown at a compound annual rate of 20.3% over the last seven years.  Transhipment cargo accounts for 72% of throughput.  23 major shipping lines and 7 feeder services operate out of Colombo.  The Colombo Port is computerized and linked to all major freight stations. Key Activities of Colombo Freeport: -Multi-country consolidation Multi-Regional distribution -Transhipment -Import/export and value addition

Colombo Port (Contd.)


The Colombo Port offers:
   

An ideal geographical location with minimum deviation from shipping lines. Excellent feeder network. Fast turnaround and round the clock service. EDI facilities with two modern container terminals, with state of the art technology and control systems. The most competitive rates in the region. Multi country consolidation and entrepot cargo. Flexibility to meet customer needs. Work is also in progress to develop and upgrade the port of Galle located in the south and the port of Trincomalee on the north east coast of Sri Lanka.

  

Telecom
 

Telephone Density: 71.87 phones per 100 people (including cellular). Operations by multiple public and private telephone service providers, including three basic, four cellular and six payphone services, making the industry one of the most competitive in Asia. Global telecom giants such as NTT, Ericsson, Telstra, Hutchison Wampoa NTT, and Malaysia Telecom are other major operators in the Sri Lankan telecommunications industry. Deregulation has resulted in the country's largest ever privatisation initiative, with NTT of Japan purchasing 35% of Sri Lanka Telecom for US$ 225 million. The availability of satellite bandwidth through several private operators such as Electroks and Ceycom Global Communications.

Tourism


Sri Lanka A land like no other known as an attractive destination for travel and tourism industry has become a major contributor to the national economy. The tourism industry has emerged as the 6th highest foreign exchange earner in Sri Lanka. (Foreign Exchange Earners) (Foreign Earners) The commercial cities,Colombo, Kurunegala and Kandy offer business travellers an array of business opportunities and trade options.

The Sri Lankan government together with the Sri Lanka Tourism Development Authority (SLTDA) are committed to the development and growth of the local Tourism industry. For growth of Tourism Sector, Government has made provisions for the same in Mahinda Chintana Policy Framework.

The Mahinda Chintana Policy Framework




The programme hopes to move the tourism industry from mass tourism to concentrated marketing, particularly on high income earners. The programmes vision for the tourism sector is to make Sri Lanka the foremost leisure destination in the South Asian Region. Key objectives include  Achieve 2.0mn tourist arrivals by 2016.  Target up scale Free Independent Travellers (FITS), who are comparatively high spenders.  Make tourism Sri Lankas third largest foreign exchange earner  Transform tourism to be the fastest job creator and help reduce unemployment numbers.

Performance of Sri-Lanka SriTourism




The civil war in 1983 had affected the tourism industry of Sri-Lanka in a Srinegative way but now after the end of LTTE war, the tourism market is set to revive with a bang ! In June 2009, a total of 30,234 tourists arrived in Sri Lanka, which shows an increase of 8.1% compared to the corresponding month in 2008. Despite the global economic downturn, the international tourist arrivals continued to increase by 1.7 per cent, from 908 million arrivals in 2007 to 924 million arrivals in 2008. In 2008, Tourism sector provided direct employment to 51,587 people.

   

Arrivals for year 2007: 4,94,008 Arrivals for year 2008: 4,38,475 Majority of the tourists visited Sri Lanka for Holiday Purpose. This shows that there is lot of scope for development of Hotels, Resorts, etc.

 Most of the tourists stay for an average period of 8-14 nights.  This shows that the attraction factor of Sri Lanka as a tourism destination is very high.  Efforts on improving Tourism market of Sri Lanka will bring in lot of revenues for the country and the main beneficiaries will be the Hospitality Sector.

Resort Region 2007

2008 35.2%

21.6% 34.2%

46.1%

52.6%

57.1%

 Colombo & Greater Colombo, the commercial capital is the tourist hot-spot with highest occupancy rates.  South Coast of Sri Lanka has the second highest occupancy after Colombo.

Investment Oppurtunities
Following are Sri Lankas Tourism zones that are available for investment purposes: Kalpitiya - Beach Resort and islands in lagoon Marawila - Beach Resort with lagoon. Waikkal - Beach Resort with Gin Oya Negombo - Beach Resort with fishing community Colombo - Commercial city with entertainment Mt. Lavinia - Beach Resort in close proximity to Colombo Wadduwa - Beach Resort with fishing community Kalutara - Beach Resort in close proximity to Colombo Beruwala - Beach Resort with local community Bentota - National holiday resort in the west coast Dedduwa - Lake Resort with five Islands Madu Ganga - Lake Resort with 16 islands Balapitiya - Beach Resort Ahungalla - Beach Resort in close proximity to Madu Ganga Hikkaduwa - Beach Resort with ocean based activities Galle - World heritage site Unawatuna - Beach Resort with local community Koggala - Beach Resort and Koggala lagoon Weligama - Beach Resort with stilt fishing Mirissa - Beach Resort with fishing community Tangalle - Beach Resort with lagoons Hambantota - Beach Resort and sand dune

Investment Oppurtunities (Contd.)


                      

Tissamaharama - Sacred city in close proximity to wild life park Yala - Wild life Resort Arugambay - Beach Resort for surfing activities Passekudah - National holiday Resort in the east coast Trincomalee - Ocean based city Nilaweli - Beach Resort in close proximity to Trincomalee Pinnawala - Nature Park Resort Kandy - Heritage Resort with temples Nuwara Eliya - Hill Country Resort in cool climate Bandarawela - Hill Country Resort with water falls Maskeliya - Hill Country Resort with tea gardens Polonnaruwa - Heritage Resort with ruins of 11 and12 AD Habarana - Urban city in close proximity to the heritage sites Anuradhapura - Heritage Resort with ruins of 3BC to 11 AD Victoria - Hill Country Resort with a reservoir Matale - Hill country with spice gardens Dambulla - Sacred Buddhist City Sigiriya - Heritage resort of Rock Fortress Giritale - Heritage Resort bordering a Lake Udawalawa - Wild life park with a reservoir Wasgamuwa - Wild life park Ratnapura - Gem City Matara - Beach Resort with Heritage

Focus


A new tourism zone under development in Kalpitiya a coastal region and archipelago of 14 islands in the country's north-west. north-

According to Sri Lanka's tourist promotion office the Kalpitiya Integrated Tourism Development Project (KITRP), and nearby islets in the Puttalam area will be built as a premium destination and will host to a string of eco-friendly resorts. eco-

The project is expected to generate four times the current US$79-a-day spend of an US$79average tourist and a number of top international branded hotels are being courted for the development.

In total, the Kalpitiya area and islands contain 4,000 acres for development, most of which is currently geared towards agriculture and fishing.

The Kalpitiya premium zone when fully developed is expected to attract one million tourists, and official say is the largest single tourism project promoted so far. The unspoiled area around Kalpitiya has some of the finest beaches anywhere in Asia as well as some premier dive sites.

Real Estate Overview




The investment potential from real estate in Sri Lanka is significant but the property market is immature and suffers from having a government that cannot commit to attracting foreign direct investment. Property Tax: 100% Either a non-resident property investor can purchase a leasehold property nonwith a 99 year lease and acquire the right to buy the freehold title to the property if the 100% taxation rule is ever rescinded. Alternatively, those who buy property in Sri Lanka through a local company structure should ensure that they are the 99% shareholder of the corporation. Either of the way adopted will reduce their taxation liability from 100% to 7%! According to Sri Lanka's tourist promotion office the Kalpitiya Integrated Tourism Development Project (KITRP), and nearby islets in the Puttalam area will be built as a premium destination and will host to a string of ecoecofriendly resorts.

 

Inferences
      

The country has a good literacy rate. Owing to low population, the per capita income is High. The Banks have Low Penetration. The service sector is the major contributor to GDP. GDP. The major part of Sri Lanka is Rural. On an average, the population is in the working age-group. ageIt has poor infrastructure with entire transportation pressure on Roads.

Inferences (Contd.)


The condition of the roads is very poor and most of them are congested. This calls for huge infrastructure investment. Ports are the main focal point for all the international trade carried out. \ Development of the ports is the key to the growth of the transportation industry which contributes close to 11% of GDP. GDP. Property tax on 100% makes it an unattractive investment destination. But there are ways to waive it off. The natural beauty of Sri Lanka makes it a very attractive tourist destination. The end of war against LTTE has paved the way for immense potential in Tourism Industry. There are large number of tourist spots which are yet to be developed and this is a great opportunity for Real Estate industry & Hospitality industry.

 

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