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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 average annual growth of between three and six per cent while both inflation and unemployment have been reduced to single figures.
Agriculture sustains most of the working population. 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 and manufacturing. In the former case, gemstones and graphite are the principal minerals. 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. During the 1990s, successive governments followed the usual prescription of market-oriented policies – privatisation and deregulation – while seeking to build up potential export-earning industries. However, longer term development has been hampered by a shortage of domestic capital and the reluctance of foreign capital to invest in the island (again, this is a consequence of the civil war: the recent peace talks between government and rebels have boosted business confidence). The tight monetary policies followed by the government during the 1990s have been relaxed, although it seems powerless to prevent the remorseless decline in value of the Sri Lankan rupee. The other major recurrent problem is the climate, especially drought in recent years, which has undermined the agricultural sector. 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: Federation of Chambers of Commerce and Industry of Sri Lanka, Level Three, 53 Vauxhall Lane, Colombo 2 (tel: (1) 304 253 or 698 225; fax: (1) 304 255; e-mail: fccisl@sltnet.lk; website: www.fccisl.org); or Ceylon Chamber of Commerce (Sri Lanka Tourist Hotels Association), 50 Navam Mawatha, Colombo 2 (tel: (1) 421 745; fax: (1) 449 352; e-mail: infordiv@chamber.lk; website: www.chamber.lk).
Conferences/Conventions: For further information, contact the Sri Lanka Convention Bureau, Hotel School Building, Fourth Floor, 80 Galle Road, Colombo 3 (tel: (74) 713 500 or (1) 440 002; fax: (1) 472 985; e-mail: slcb@sri.lanka.lk).
Copyright © 2003 Columbus Publishing Ltd.
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