Sri Lanka country

Assessing the FDI Opportunities in Sri Lanka

Located at the heart of Indian Ocean , Sri Lanka is a country that has a potential to be a tourist destination because of its numerous beaches and rich culture . However , the long-standing civil war and ethnic conflict has marred its chances to obtain several foreign direct investments (FDI

As Encyclopzhdia Britannica (2007 ) described , it was in 1948 , after nearly 150 years of British rule , that Sri Lanka became an independent country and was also admitted to the United Nations seven years later The country

is a member of the Commonwealth and the South Asian Association for Regional Cooperation . Its main urban area is Colombo the capital of Sri Lanka . For administrative purposes , the country has been divided into nine provinces and subdivided into 25 districts . As a densely populated nation , majority of its people are poor , live in rural areas , and depend on agriculture for their livelihood . Gifted with the geophysical environment of wide-ranging diversity makes Sri Lanka one of the world 's most scenic countries . However , this diversity has been also reflected in several ethnic groups , each with its own cultural heritage This is why Sri Lanka also has a highly varied cultural landscape and its inevitable political conflict emerge from here

In the late 1970s , Sri Lankan government had envisioned the transformation from an inward-looking socialist system to a market economy based on liberalized trade , foreign exchange and investment Despite a devastating 20-year civil war started in 1983 , healthy economic growth has been maintained , with GDP growing at around five percent annually for over two decades even during the conflict years During the past years , however , excessive emphasis on social welfare measures , deterioration of terms of trade , and closing of the economy through import-substituting industrialization contributed significantly to the retardation of economic growth from 1960 to 1977 (Kelagama 1998 . Despite this performance , most commentators on the Sri Lankan economy , including the World Bank , saw Sri Lanka as a success story in terms of social welfare achievements and growth performance compared to other low-income countries (World Bank 1980 ,

. 90 . A radical departure from social welfare-oriented and inward-looking policies occurred in 1977 , when the government initiated economic liberalization and various new policy measures to increase economic growth . Key features of the new policy regime included promotion of export-led industrialization by offering incentives to domestic entrepreneurs , and encouragement of foreign direct investment in the newly established export processing zone

Fortunately , the new liberal policy environment in the 1980s encouraged some large multinational companies to invest in Sri Lanka . The international media soon dubbed Sri Lanka the new investment center of Asia ' Tourism picked up and tourist arrivals exceeded 400 ,000 in 1982 . Export growth accelerated , with the garment sector accounting for much of the momentum . In fact , the only five-year period since independence in which Sri Lanka 's average growth rate exceeded 6 percent was from 1977 to 1982 . All economic indicators during the 1977-82 period showed that , even though Sri Lanka had...