Tremendous growth potential

  • 4 Jan 2010 01:26:53 GMT

    Open Doors

    Sri Lanka East safe for tourists: Britain

    [Britain said it is no longer advising its citizens against travel to Sri Lanka`s East, but the north continued to be out of bounds though a 30-year war in the area ended last May.

    Britain`s foreign and commonwealth office (FCO) said it had removed an `all but essential travel` tag to the key eastern districts of Batticaloa, Trincomalee and Ampara.

    But Britons were still advised against travelling to Kilinochchi, Mannar, Mullativu and Vavuniya.

    `For the purposes of this Travel Advice, this means no travel north of the boundary line from Mullikkulam on the north west coast to Kokkilai on the north east coast,` the FCO said.

    `Travel to Jaffna District is possible but only by approved means. All foreign nationals are required to seek prior approval from the Sri Lankan Ministry of Defence before attempting to travel to Jaffna.`

    The website advised Britons to avoid public rallies ahead of presidential elections on January 26.

    Britain is a key tourism generator for Sri Lanka.]

  • 31 Jan 2010 10:56:25 GMT

    Sri Lanka`s wildlife sanctuary sites reopened for tourism.

    [Two of Sri Lanka`s renowned wildlife sanctuary sites were reopened on Saturday after years of closure because of the conflict between the government troops and Tamil Tiger rebels, a government official said.

    Ananda Wijesuriya, director of the Wildlife Conservation Department said the two sites were opened to the public on Saturday were located at southeastern and eastern parts of the island.

    Kumana, a bird sanctuary and a main eco-tourism attraction, is 312 km southeast of the Colombo while Lahugala, a wildlife park/ sanctuary reserve, is 318 km east of the capital.

    They have been shut for tourists since 2005 when the fighting between the two sides escalated.

    Both areas were under security clouds due to clashes until May last year when the rebels were defeated.

    `After the end of the war we received security clearance,` Wijesuriya said.

    The end to the civil conflict has made Sri Lanka a major tourism attraction, the tourism authority said.]

  • 31 Jan 2010 10:58:38 GMT

    Swedish tourists set to storm Sri Lanka -

    [Sweden is yet another new market for the already growing list of inbound tourist markets for Sri Lanka with around 7,000 Swedish charter tourists expected to visit the island during the forthcoming winter season.

    According to the Sri Lanka Tourism Promotion Bureau (SLTPB), Swedish charter tour groups have already prioritized to include the Sri Lankan market for winter 2010. Three of the largest charter tour operators in the Scandinavian country will start flying their customers Sri Lanka by the 28th of November 2010. The major tour groups in Sweden, Apollo, Fritidsresor and Ving will transport tourists twice a week to Sri Lanka.

    Chairman of the SLTPB Bernard Goonetilleke has identified the Scandanavian market as a growth market for the future with enormous potential. They have shown tremendous interest in Sri Lanka over the last year, he said in the press release. We see the potential for this market to be a strong contender for the top spot in inbound tourism to Sri Lanka.

    The main attraction for the Swedes are the pristine beaches, nature and national parks. The SLTPB estimates that each package will costs between SEK 10,000 to SEK 11,300 (between US$1,350 to US$1,500) per person for two weeks at half-board for a double room.

    The SLTPB stated that currently Swedish production house Meter Film and Television are in the island on invitation from the SLTPB and are now in Koggala shooting for internationally acclaimed reality show High School Reunion .

    The reality programme will showcase the unique facets of the country and down south in particular.

    High School Reunion will be aired on Kanal 5 rated amongst the top five most watched TV channels in Sweden with an 85% viewer ship rate.]

  • 31 Jan 2010 11:01:57 GMT

    Welcome to Sri Lanka s bird-friendly hotel.

    Hotel Sigiriya - where priority is on the environment.

    Sigiriya - The next time you walk into Hotel Sigiriya at the foot of the famous rock in Dambulla don t be surprised to find Kalu Gona , the bull grazing in the garden and munching away. To the hotel this is the live lawn mover that keeps the grass in check, saving on fuel costs and thus protecting the environment from obnoxious fumes (however small it may be).

    We have re-positioned the 80-room property to an exclusive green hotel, says Abbas Esufally, Group Director at Hemas Group handling hotels and leisure. We wanted to make it unique and brought in environmental specialist Dr Sriyani Miththapala to come up with a plan to make it environmental friendly, using a lot of clean energy in the process, he told the Business Times in Colombo.

    Indeed the hotel, 150 km north of Colombo, is developing systems where ultimately all its energy or the most part of it would come non-fossil fuels or renewable sources. At the hotel, its Manager Lakshita Wegodapola takes a Business Times reporter around the property, proudly showing the various ways the hotel has contributed in its own, small effort to reduce the carbon footprint and minimise greenhouse gases.

    Guests walking along the airy and open corridors of the lobby will notice the colour-coded switches or energy-savings bulbs that contribute to this effort. Solar energy is used for heating water in the toilets while hotel stewards serve straw-less drinks.

    No plastic

    Every attempt has been made to reduce plastic use and waste. The laundry cart is colour coded, fresh flowers and natural oils are used as air freshener and margosa oil as a natural pesticide.

    The hotel shop doesn t sell products from endangered species. Guests can have a fresh meal while strolling through the organic garden where vegetables and greens are instally plucked and cooked or served fresh.

  • 31 Jan 2010 11:02:33 GMT

    Says Mr Esufally, We changed the hardware and the software at the hotel. The latter is most difficult as hardware is easy: you invest and change the structure. But software means changing staff attitudes think green which (in today s context) makes more commercial sense.

    Water is recycled for use in the garden. Mr Wegodapola walks towards a boiler in the 7-acre, nicely landscaped property, saying that the diesel-fuelled boiler was transformed into a gassifier, bringing down costs by 50 %, with the use of fuelwood.

    He said the waste in the kitchen is sent to the piggery. Glass bottles are used as the hotel shuns plastic bottles again to minimize the use of plastics. Just past the lobby and the public lounge is the Eco Centre where guests can relax on the ground filled with comfortable cushions, read a book on birds, animals or nature, listen to some music or listen to an expert talk on eco issues. This is the first bird friendly hotel certified by the Field Ornithology Group, Mr Wegodapola says, walking around the well-lit, circular room. The hotel has won many local and international environmental awards and its Corporate Social Responsibility initiatives extend to helping a nearby village and two schools.

    Helping children

    British folk singer Astrid Brook, who was hosted by the hotel during her frequent visits to Sri Lanka to play at the Country Roads charity concerts for needy children, visited kids at the hotel-supported, Diyakepilla village school and was enthralled by the children and the efforts by the hotel to help in their education.

    Ms Brook is returning to Sri Lanka again for this year s Country Roads concert on February 21.

    Mr Wegodapitiya says the hotel is also examining the possibility of producing biogas from waste and rainwater harvesting.

    With biogas we could use the energy for the kitchen and considerably save on gas cylinders, he said.

    In Colombo, Mr Esufally said brand positioning of the property is to promote its eco-friendly and environmental sustenance initiatives. We want to show visitors and outside world that we have an unique, unmatched green product, he said.

  • 31 Jan 2010 11:09:07 GMT

    JKH expanding leisure sector

    John Keells Holdings (JKH), Sri Lanka s biggest conglomerate, showed profit gains in several sectors including leisure, transportation, financial services and information technology for the third quarter ended December 31, 2009, including plans to expand in the leisure sector with new projects and refurbishing existing hotels.

    According to the interim report released this week, net profit for the period under review was Rs.863 million, a 21% decrease compared to the Rs.1.09 billion in the corresponding period of the previous year. Similarly, the net profit for the nine months ended 31 December 2009 stood at Rs.2.83 billion, a 29% fall compared to Rs.3.96 billion in the corresponding period of 2008 which included the capital profit of Rs.1.21 billion on the sale of the investment in Associated Motorways (AMW).

    The consolidated income statement shows that revenue increased by 9% in the nine months ended 31 December 2009 to Rs.34 billion from Rs.31.1 billion the previous year. Gross profit also increased by 9% to Rs.7.3 billion from Rs.6.7 billion the previous year.

    Other operating income increased by 55% during the same period to Rs.3.2 billion but there were increases in distribution and administrative expenses as well as other operating expenses.

    In a statement, JKH Chairman Susantha Ratnayake said the improved performance in the third quarter under review is only an early indication of the potential the Group offers in a new environment. The leisure sector saw a significant improvement in the third quarter compared to the corresponding period of the previous year with profits before tax increasing by 174% to Rs.333 million from Rs.122 million in 2008.

    Mr. Ratnayake said this improvement in performance was mainly from the Sri Lankan city hotels and resort hotels. During the quarter, JKH acquired four acres of land next to the former Hotel Bayroo which gives a contiguous block of 10 acres on the prime Beruwala beach front to construct a 190 room hotel. Mr. Ratnayake added that the South Wing of the Cinnamon Grand Hotel in Colombo, comprising of 254 rooms will be refurbished during the next few months.

  • 31 Jan 2010 11:12:41 GMT

    Second only to China:

    Sri Lanka ranked eighth fastest growing economy - EIU

    [Sri Lanka received major world recognition when it was ranked as the eighth fastest growing economy in the world by the Economist Intelligence Unit (EIU) of the United States.

    The EIU said that Sri Lanka s economic growth would be second only to China.

    The report states that the global economy would recover from the recession. It is envisaged that Sri Lanka would record a 6.3 percent GDP growth rate that is second only to China, which will record 8.6 percent in the Asian region.

    This is the second honour Sri Lanka received recently. Early this month Sri Lanka was elevated to a Middle Income Emerging Market status country by the International Monetary Fund (IMF). Central Bank Governor, Ajith Nivard Cabraal said that Sri Lanka s economy grew by over 6 percent during the 2006-2008 period.

    This is a commendable achievement given the fact that many countries recorded a negative or very low economic growth in 2009.

    There are signs that our economy is gradually recovering from the impact that we had due to the global recession. This year is very promising as we are now on a completely different platform with the end of the nearly three-decade long conflict, he told the Sunday Observer.

    Economic analysts said that the two rankings clearly proves that the economy has grown by leaps and bounds in the past few years.

    The end of the war, sound economic management and political stability have contributed for Sri Lanka to achieve this landmark accolade.

    The world s economy will recover from recession and the post crisis economic landscape. This will pave the way to achieve a higher growth of about seven to nine percent in the medium term, according to a spokesman for the Ministry of Finance and Planning, quoting the EIU report.

    It is estimated that oil prices will average around US $ 74-80 per barrel for the period 2010-2012. Sri Lanka s stock market has been ranked the second-best in the world.

    With these positive signs coupled with political stability and higher inflow of capital it will be a leap forward in the sphere of economic prosperity. However, the challenges of maintaining price stability and rehabilitation of the Northern and Eastern provinces are ahead.

    Sri Lanka also recorded over $850 million in Foreign Direct Investments (FDIs) last year, which is an all-time record.

    The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.

    As the world s leading provider of country intelligence, the Economist Intelligence Unit helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.]

  • 31 Jan 2010 11:17:43 GMT

    Envisioning A Robust Post-War Economy

    On the morning after the election result was announced I woke up to a stale old day. The winning margin of the election was too big to believe. The hope for believable change has turned into an unbelievable status quo. If it is the destiny of Sri Lanka, I humbly accept that. Now that the Sri Lankan people have chosen the President of the country for the next six years or eight years (depending on the interpretation of the Constitution by the Supreme Court), it is time to strategise a robust post-war economy.

    The election manifestos of the two main contenders were grounded on the future of the economy of Sri Lanka, in the aftermath of the end of the civil war in May 2009. Thus, Brighter Future and Believable Change became the main campaign slogans of the incumbent and the common opposition candidate respectively. The people of Sri Lanka have placed their trust on Brighter Future. The incumbent and re-elected President promised to make Sri Lanka the economic hub of Asia and take the country from Third World to First World status, though he did not give any specific time frame to achieve the same.

    Although there may be different definitions of Third World and First World, one of the widely accepted benchmarks is the classification of economies in the World Development Indicators (WDI) of the World Bank as follows (latest data available pertains to the calendar year 2007):

  • 31 Jan 2010 11:19:42 GMT

    Low-income economy $935 or less GNI (gross national income) per capita in 2007

    Lower middle-income economy $936 $3,704 GNI per capita in 2007

    Upper middle-income economy $3,705 $11,455 GNI per capita in 2007

    High-income economy $11,456 or more GNI per capita income in 2007

    Hence, while low-income economies could be classified as Third World economies, high-income economies could be classified as First World economies. Lower and upper middle-income economies would fall in-between the First and Third World. The foregoing figures are upwardly revised annually and therefore flow variables.

    Sri Lanka was already a lower middle-income economy when the incumbent President was first elected to office in late-2005, i.e. per capita income of little over $1,000 in 2005. According to WDI, in 2006 Sri Lanka s per capita income was $1,310 and ranked 144 out of 207 countries. In 2008, the latest year for which data is available, Sri Lanka s per capita income was $2,014 according to the national estimation. The per capita income is likely to have risen to nearly $2,200 in 2009 though the official data is yet to be released. Therefore, aiming to become a First World country during his second and last term of office is a mirage.

    Nevertheless, the President could and should aim for the Sri Lankan economy to graduate into an upper middle-income economy at the end of his second term of office. Remember that, by the time of the end of his second term the threshold for upper middle-income economy would have risen to at least $4,000 per capita GNI. In order to realise this feat, the Sri Lankan economy should grow at double-digit rates uninterruptedly during this second decade of the century or beyond.

    Sri Lankan economy was stuck in low-level equilibrium growth rate (i.e. less than 5% annual average growth) between 1951 and 1977. After 1977, the Sri Lankan economy has graduated into medium-level equilibrium growth rate (i.e. more than 5% but less than 10%), in spite of the high-intensity armed conflicts both in the north and east and the south. Unfortunately, in the past three decades, the economy was stuck in medium-level equilibrium growth rate. Although the medium-level equilibrium growth rate was quite remarkable and resilient amidst the high-intensity armed conflicts, it was not sufficient to diffuse economic growth to the periphery and make substantial and sustainable reduction in poverty.

  • 31 Jan 2010 11:20:34 GMT

    With the conclusion of the protracted civil war in May 2009, it is time to take-off into a high-level equilibrium growth trajectory (i.e. sustained double-digit growth rate) in the next decade or longer in order to graduate into upper middle-income economy and reduce the share of the poor in the population to single-digit level. Thus, sustained double-digit economic growth rate and sustainable single-digit poverty rate should become the twin objective of the economic strategy for the second decade of this century and second-term of office of the incumbent President. There are at least five prerequisites for achieving the foregoing twin goal.

    Induction of competent economic advisers

    Restoring good governance

    Right-sizing the public sector

    Inculcating meritocracy

    Enterprising the education sector.

    First of all, the President should induct a group of young, open-minded, innovative and modernist advisers who could provide sound policy options to lift the Sri Lankan economy from medium-level equilibrium to high-level equilibrium (sustained double-digit growth rate) economy.

    Secondly, restoring good governance is sine qua non to achieve sustained double-digit economic growth and sustainable single-digit poverty. Some of the urgent measures to be taken to restore good governance are clamping down on corruption, ensuring freedom of information (particularly on financial and economic information) and media freedom, instilling transparency and accountability in economic management and policy-making, and improvement in protection of human rights and enhancing human security.

    Thirdly, the President should take concrete action to wind-down the bloated bureaucracy that has become a huge burden on about 80% of the population that is not part of the public sector employees (roughly one million) and their immediate families (roughly four million). Right-sizing the bureaucracy is indispensable for providing cost-effective and efficient public goods and services to the citizens.