The Sri Lankan economy, at present, is under constant review, as the rupee (local currency) continuously fluctuates with the varying global economical structure. High inflation rates of goods and services in the country present many problems to the middle and lower income earners. The civil war that raged for over 20 years was one major reason for the downfall of the economy in Sri Lanka. The once promising tourist attractions are currently destructed and desolate areas and the tourism industry suffered immensely over five years ago. Reasonably robust in performance, the Sri Lankan economy of the past five years has managed to average annual growth of between 3% and 6% (4% in 2002), while inflation rates were reduced to 9.7%. The unemployment rate has also reduced to 9.2%, as a result of the previous five years' efforts to stabilise the local economy.
Contributing approximately 20% of GDP, agriculture employs about one third of working population in Sri Lanka. The main export-oriented crops are tea, rubber and coconut, providing over 75% of the export income of the country. Rice is also a main crop in Sri Lanka, but it mostly grown for domestic consumption, as rice is the main food source of the locals. The forestry and fishing industries are also beneficial to the economy.
Mining (gems stones and graphite) and manufacturing (textile, cement, steel, plastic, coir etc) are the most important in Sri Lanka's industrial sector. Limestone, clay, iron ore and uranium ore are also available in quantities of commercial value. The main source of power in Sri Lanka is hydroelectricity, supplemented by fuel / oil imported from Middle East region.
Considering the service sector of Sri Lanka, the economic contribution by banks and insurance companies has been significant. Market-oriented policies such as privatisation and deregulation have been imposed on several occasions, to boost the economical standard of the country. The search for potential export-oriented industries was a slow process to ensure results, but has gained considerable growth at present.
Reducing Sri Lanka's chronic shortage of investment capital of the past few years, the ceasefire and peace discussions have brought in many foreign traders and investors. Further deregulation, fiscal reform and privatization will undoubtedly gain many benefits to economy. The state still owns 90 percent of Sri Lanka's land and the bulk of its utilities, although it has more or less pulled out of the manufacturing industry because of foreign share holders.
India, Japan, the Unites States and the United Kingdom are Sri Lanka's major trading partners.
Rebuilding of the Tsunami devastated areas in Sri Lanka have begun, and although progress is very slow, the foreign aid presented to the country has lessened the burden on the current economic crisis in Sri Lanka.
Business
Sri Lanka's business attire is casual, because of the warm climate. English is widely spoken and used in the business society. Any business is done on appointments and punctual arrival is expected. Exchanging business cards on the first visit is encouraged.
Office hours: Monday to Friday from 8:00 am to 4:30 pm (government offices)
Commercial Information
Advice on commercial issues can be obtained from the following local organisations.
Federation of Chambers of Commerce and Industry of Sri Lanka
Level 3, 53 Vauxhall Lane, Colombo 2
Tel: +94 11 230 4253
Fax: +94 11 230 4254 / 5
E-mail: mailto:fccisl@sltnet.lk
Ceylon Chamber of Commerce (Sri Lanka Tourist Hotels Association)
50 Navam Mawatha, Colombo 2
Tel: +94 11 245 2183 / 242 1745 / 232 9143
Fax: +94 11 243 7477 / 244 9352
E-mail: info@chamber.lk
Conferences / Conventions
Sri Lanka Convention Bureau
Hotel School Building, 4th Floor,
80 Galle Road, Colombo 3
Tel: +94 11 471 3500 / 1
+94 11 244 0002
Fax: +94 11 2472 985
Email: slcb@sri.lanka.net
