International Business - Sri Lanka - Country Assignment

Country Assignment
Sri Lanka
DINESH SHAMNANI
International Business Assignment
INDEX
Sr. No.
Topic
Page No.
Introduction Overview of Sri Lanka
23
Key Rankings Indexes
4 15
Cultural Environment of Sri Lanka
16 27
Political Environment of Sri Lanka
28 34
Legal Environment of Sri Lanka
35
Economic Environment of Sri Lanka
36 - 61
Trading Environment
62 66
Free Trade Agreement
67
Other Aspects of Environment
68 75
10
International HRM
76 85
11
International Logistics
86
12
Membership
87
13
Multinational companies in Sri Lanka
88
14
Trading Relations with India
89 96
15
Bibliography
97
1|P a ge
Overview of Sri Lanka

Sri Lanka is focusing on long-term strategic and structural development challenges as it strives to
transition to an upper middle-income country. Key challenges include boosting investment,
including in human capital, realigning public spending and policy with the needs of a middleincome country, enhancing the role of the private sector, including the provision of an appropriate
environment for increasing productivity and exports, and ensuring that growth is inclusive.
Economic growth in Sri Lanka has been among the fastest in South Asia in recent years. Growth
averaged 6.3 percent between 2002 and 2013, with Gross Domestic Product (GDP) per capita
rising from US$859 in 2000 to US$3,256 in 2013. Preliminary indications are that GDP further
increased by 7.8 percent in 2014.
For most of the past decade, growth has been pro-poor, with consumption per capita of the bottom
40 percent growing at 3.3 percent a year, compared to 2.8 percent for the total population. Other
human development indicators are also impressive by regional and lower middle income
standards. Sri Lanka has surpassed most of the Millennium Development Goal (MDG) targets set
for 2015, outperforming nearby country comparators on most MDGs.
Notwithstanding declining poverty, 13 districts comprising 36 percent of the total population
remain below the national poverty headcount. In four conflict-affected border districts, poverty
rates are at or above 20 percent. While the national unemployment level is low at 4.4 percent, 14
districts report unemployment rates higher than the national average. According to Department of
Census and Statistics survey data of 2011, 76 percent of total unemployed are below 29 years of
age.
Growth during the past five years has been in form of a peace dividend resulting from
reconstruction efforts and increased consumption. Sustaining broad-based economic growth into
the future will require determined structural reforms that stimulate productivity growth and
economic diversification across sectors, driven by technology and innovation, and new market
development domestically and internationally. As part of Sri Lankas structural economic
transformation, employment in primary agriculture will likely continue to decline from its present
share of 30 percent of the labor force as other sectors of higher productivity absorb rural surplus
2|P a ge
labor. At the same, along with productivity increases, agriculture is likely to become more capital
intensive and technology-driven as labor shortages emerge.
Improving the quality of human capital through effective education and skills development is
central to Sri Lankas economic growth and competitiveness. Continued growth will also depend
largely on fostering private sector development and private investment, especially increased
foreign direct investment (FDI). Sri Lankas economy depends on FDI to bring in innovation. The
import of FDI is further underscored by the countrys limited domestic savings rate, brought
about largely by its demographic trends. Contrary to most economies in South Asia, Sri Lanka
does not have a demographic dividend: by 2036, more than 22 percent of the population will be
over 60, and there will be 61 dependents per 100 adults. Increases in the labor force, employment
rates and productivity will be central to growth. Against the background of an aging society,
efficient and well-targeted social assistance will also become more important.
Against this backdrop, Sri Lanka is in the midst of fundamental political change, following the
election of Maithripala Sirisena as President of the country in January 2015. President Sirisena
and his Government have committed to a rapid 100 day program focused largely on restructuring
government after which Parliament is to be dissolved and general elections held. The winning
coalition in these elections would be expected to form a long-term government with a
corresponding economic policy direction.
3|P a ge
Key Ranking
1) Global Innovation Index of Central and South Asia Countries
4|P a ge
2) Competitiveness Index
5|P a ge
3) Ease of Ranking doing business

ECONOMY OVERVIEW
REGION
South Asia
INCOME CATEGORY
Lower middle income
POPULATION
20,483,000
GNI PER CAPITA (US$)
3,170
CITY COVERED
Colombo
DOING BUSINESS
2015 RANK
DOING BUSINESS 2014

RANK***
99
DOING BUSINESS 2015 DTF**

(% POINTS)
CHANGE IN
RANK
105
DOING BUSINESS 2014 DTF**

(% POINTS)
61.36
60.01
CHANGE IN DTF** (%
POINTS)
1.35
Rankings
TOPICS
DB 2015 Rank
DB 2014 Rank
Change in Rank
Starting a Business
104
101
Dealing with Construction Permits
60
60
No change
Getting Electricity
100
100
No change
Registering Property
131
124
-7
Getting Credit
89
86
-3
Protecting Minority Investors
51
50
-1
Paying Taxes
158
167
Trading Across Borders
69
85
16
Enforcing Contracts
165
165
Resolving Insolvency
72
68
=Doing Business reform making it easier to do business.
-3
No change
-4
=Change making it more difficult to do business
6|P a ge
Comparison with some economies
Economy
Starting a
Business
Rank
Starting a Procedures
Business
(numbers)
DTF
Time
(Days)
Cost (%
income per
capita)
Pain-in min
capital (% of
income per
capita)
Sri Lanka
India
Pakistan
Bangladesh
Nepal
Bhutan
Russia
USA
China
Zinbabwe
104
158
116
115
104
92
34
46
128
180
83.01
68.42
80.92
81.36
83.01
85.01
92.17
91.22
77.43
51.42
11.0
28.4
19.0
19.5
17.0
17.0
11.2
5.6
31.4
90.0
20.7
12.2
9.6
16.8
32.2
4.4
1.2
1.2
0.9
114.6
0.0
111.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9.0
11.9
10.0
9.0
7.0
8.0
4.4
6.0
11.0
9.0
7|P a ge
4) Freedom house index

Freedom house index is U.S. based and funded non-governmental organization (NGO) that
conducts research and advocacy on democracy, political freedom and human rights.
Freedom House was founded in October 1941. Wendell Willkie and Eleanor Roosevelt served as
its first honorary chairpersons.
Freedom in the World 2014 & 2015
RATINGS CHANGE:
Sri Lankas civil liberties rating declined from 4 to 5 due to increased pressure on freedom of
expression and association, including curbs on traditional media and internet-based news and
opinion, and surveillance and harassment of civil society activists.
8|P a ge
Freedom on the Net 2014

2014 Scores
Status Partly Free
Freedom on the net total (0 = Best, 100 = Worst) 58
Obstacle to access (0 = Best, 100 = Worst) 15
Limits on Content (0 = Best, 100 = Worst) 20
Violations of user rights (0 = Best, 100 = Worst) 23
Population
Internet penetration
Social Media/ ICT Apps Blocked:
Political/Social Content Blocked:
Bloggers/ICT Users arrested:
Press freedom status:
2014 on the net total
20.5 Million
22%
NO
YES
NO
Not Free
58
KEY DEVELOPMENTS:
May 2013 - May 2014
In March 2014, the information ministry formed a committee to regulate social media, shortly after
President Rajapaksa dubbed them a disease; the scope of its activities remains unclear.
The Colombo Telegraph website was repeatedly inaccessible, continuing a trend of pressure on online
news outlets.
Incidents of violence and harassment against internet users declined, though traditional journalists met
with increased intimidation.
Freedom of the Press 2015

Status Not Free
Press Freedom Score (0 = Best, 100 = Worst) 76
Legal Environment (0 = Best, 100 = Worst) 23
Political Environment (0 = Best, 100 = Worst) 33
Economic Environment (0 = Best, 100 = Worst) 20
Media freedom remained restricted in Sri Lanka in 2014. The regime of President Mahinda Rajapaksa
continued to intimidate journalists through a variety of legal and extralegal means. As the presidential
election approached at the end of the year, pressure on the media increased.
9|P a ge
5) Mercer Index
Cost of Living Reports Key Features
Based on an international basket of goods and services reflecting realistic spending habits
established through years of extensive expatriate research.
Accurate, current, frequently updated data.
Distinct cost of living (COL) indices and price information for different types of expatriate
shoppers.
Full list of stores and sources where prices are collected ensures transparency.
Accommodation and Education costs included in the reports.
Business Travel Expenses are included to provide guidance for per diems.
Estimate allowances instantly using our Cost of Living Allowance Calculators.
Additional calculators that allow you to use data for your specific needs.
Special cities surveyed upon request.
Methodology that lets you determine competitive purchasing power for all your assignees,
wherever they come from.
Mercer Cost of Living Survey Worldwide Rankings 2015
(Mercer international basket, including rental accommodation costs)
Rank as of March
City
Country
2014
2015
Luanda
Angola
Hong Kong
Hong Kong
Zurich
Switzerland
Singapore
Singapore
Geneva
Switzerland
10
Shanghai
China
16
16
New York City
United States
92
50
Washington, D.C.
United States
140
74
Mumbai
India
164
129
Colombo
Sri Lanka
157
132
New Delhi
India
211
205
Karachi
Pakistan
Source: Mercers 2015 Cost of Living Survey
10 | P a g e
6) IPRI
Sri Lankas IPRI score remained unchanged with a score of 5.0. Sri Lankas IPRI score has not
changed since 2012 and in 2014 Sri Lanka ranks 59th worldwide and 11th in Asia and Oceania.
The Compounded Annual Growth Rates from 2010 through 2014 for the various components are
as follows: Legal and Political Environment (+1.1 percent), Physical Property Rights (-0.8
percent), Intellectual Property Rights (+2.4 percent), and the IPRI score (+0.5 percent).
While Sri Lankas Intellectual Property Rights score has remained steady at 4.5 since 2012, the
countrys Legal and Political Environment declined marginally from 2013 to 2014 as a result of a
decline in the countrys Judicial Independence by 0.3 points and Rule of Law by 0.1 points.
However, it is worth noting that Sri Lankas Control of Corruption improved by 0.2 points.
Though Sri Lankas Legal and Political Environment weakened from 2013 to 2014, the countrys
Physical Property Rights score improved by 0.1 points due an equal improvement in the countrys
Access to Loans.
IPRI Overall
Year
Score
2007
2008
Score
Globally
Regionally
Overall
5.0
59 of 97
11 of 16
4.5
Legal and Political
4.6
51 of 96
8 of 16
2009
4.7
Physical
5.9
56 of 97
12 of 16
2010
4.6
Intellectual
4.5
71 of 97
11 of 16
2011
2012
2013
2014
11 | P a g e
Legal and Political Environmental

Year
Score
2007
2008
Score
Globally
Regionally
Overall
4.6
51 of 96
8 of 16
3.9
Judicial Independence
5.6
44 of 97
11 of 16
2009
Rule of Law
4.8
47 of 97
8 of 15
2010
Political Stability
3.6
73 of 96
11 of 15
2011
4.5
Control of Corruption
4.5
46 of 97
8 of 16
2012
4.6
2013
4.7
2014
4.6
Physical Property Rights

Year
Score
2007
5.9
Overall
2008
Score
Globally
Regionally
5.9
56 of 97
12 of 16
5.9
Protection of Physical Property 6.2
44 of 97
10 of 15
2009
Registering Property
77 of 96
14 of 15
2010
2011
6.1
2012
2013
5.8
2014
5.9
7.7
12 | P a g e
Intellectual Property Rights

Year
Score
2007
5.1
Overall
2008
Score
Globally
Regionally
4.5
71 of 97
11 of 16
3.7
Protection of Individual Property Rights 5.4
44 of 97
10 of 16
2009
Patent Protection
6.5
59 of 97
11 of 16
2010
3.9
Copyright Protection
1.6
73 of 80
12 of 15
2011
4.4
2012
4.5
2013
4.4
2014
4.5
13 | P a g e
7) Index of economic freedom, Overall Score (score (100 represents

the maximum freedom))
Economic freedom is the fundamental right of every human to control his or her own labor and
property. In an economically free society, individuals are free to work, produce, consume, and
invest in any way they please, with that freedom both protected by the state and unconstrained by
the state. In economically free societies, governments allow labor, capital and goods to move
freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect
and maintain liberty itself.
14 | P a g e
Comparison with India
15 | P a g e
PEST ANALYSIS OF SRI LANKA
Cultural environment of Sri Lanka

Demographic Profile of the Country
Population (source: countrymeters.info/en/Sri Lanka)
21 045 383
Current population
10 383 447 Current male population (49.3%)

10 661 937 Current female population (50.7%)
265 693 Births this year
835 Births today
90 293 Deaths this year
284 Deaths today
-32 945 Net migration this year
-104 Net migration today
142 455 Population growth this year
448 Population growth today
During 2015 Sri Lanka population is estimated to be increased by 195 233 people and reach 21
098 161 in the beginning of 2016. The natural increase is expected to be positive, as the number
of births will exceed the number of deaths by 240 384. If external migration will remain on the
previous year level, the population will be declined by 45 150 due to the migration reasons. It
means that amount of people who leaves Sri Lanka to settle permanently in another country
16 | P a g e
(emigrants) will prevail over the amount of people who moves into the country (to which they are
not native) in order to settle there as permanent residents (immigrants).
According to estimations, daily change rates of Sri Lanka population in 2015 will be the
following:
998 live births average per day (41.57 in a hour)
339 deaths average per day (14.13 in a hour)
-124 emigrants average per day (-5.15 in a hour)
The population of Sri Lanka will be increased by 535 persons daily in 2015.
Sri Lanka population density
Sri Lanka population density is 318.6 people per square kilometer as of October 2015. Density of
population is calculated as permanently settled population of Sri Lanka divided by total area of
the country. Total area is the sum of land and water areas within international boundaries and
coastlines of Sri Lanka. The total area of Sri Lanka is 65 610 km2 according to the United Nations
Statistics Division
Sri Lanka age structure
As of the beginning of 2015 according to our estimations Sri Lanka had the following population
age distribution:
24.9
67.2
7.9
- percentage of population under 15 years old

- percentage of population between 15 and 64 years old
- percentage of population above 64 years old
In absolute figures (estimation):
5 210 682 young people under 15 years old ( 2 657 598 males / 2 553 084 females)
14 050 948 persons between 15 and 64 years old ( 6 868 493 males / 7 182 455 females)
1 641 298 persons above 64 years old ( 707 355 males / 933 943 females)
We prepared a simplified model of the population distribution pyramid which is broken down
into 3 main age groups. The groups are the same as we used above: population under 15,
between 15 and 64 and population which is over 65 year old.
17 | P a g e
65+
15-64
0-14
male
female
As we can see the Sri Lanka population pyramid has an expanding type. This type of pyramid is
common for developing countries with high birth and death rates. Relatively short life
expectancy, as well as low level of education and poor health care are also describe such kind of
population age distribution model.
Sri Lanka age dependency ratio
Dependency ratio of population is a ratio of people who are generally not in the labor force (the
dependents) to workforce of a country (the productive part of population). The dependent part
includes the population under 15 years old and people aged 65 and over. The productive part of
population accordingly consists of population between 15 and 64 years.
This ratio shows the pressure on productive population produced by the dependent part of
population.
The total dependency ratio of population in Sri Lanka is 48.8 %.
The value of 48.8 % is relatively low. It shows that the dependent part of population is less than a
half of the working part. In other words the working population (labor force) in Sri Lanka must
provide goods for itself and cover expenditure on children and aged persons. And this part of
population is less than 50% of working population.
18 | P a g e
Culture, Hofstedes Cultural Dimensions

Hofstede's cultural dimensions theory is a framework for cross-cultural communication,
developed by Geert Hofstede. It describes the effects of a society's culture on the values of its
members, and how these values relate to behavior, using a structure derived from factor analysis.
If we explore Sri Lankas culture through the lens of the 6-D Model, we can get a good
overview of the deep drivers of Sri Lankas culture relative to other world cultures.
Power Distance
This dimension deals with the fact that all individuals in societies are not equal it expresses the
attitude of the culture towards these inequalities amongst us. Power Distance is defined as the
extent to which the less powerful members of institutions and organisations within a country
expect and accept that power is distributed unequally.
With a slightly high score of 80, Sri Lanka is a relatively hierarchical society. This means that
people accept a hierarchical order in which everybody has a place and which needs no further
justification. Hierarchy in an organisation is seen as reflecting inherent inequalities, centralisation
is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat.
19 | P a g e
Individualism
The fundamental issue addressed by this dimension is the degree of interdependence a society
maintains among its members. It has to do with whether peoples self-image is defined in terms
of I or We. In Individualist societies people are supposed to look after themselves and their
direct family only. In Collectivist societies people belong to in groups that take care of them in
exchange for loyalty.
A low score of 35 in this dimension means that Sri Lanka is considered a collectivistic society.
This is evident in a close, long-term commitment to the member 'group', be that a family,
extended family, or extended relationships. Loyalty in a collectivist culture is paramount and
overrides most other societal rules and regulations. The society fosters strong relationships where
everyone takes responsibility for fellow members of their group. In collectivist societies: offence
leads to shame and the loss of face, employer/employee relationships are perceived in moral terms
(like a family link), hiring and promotion decisions take account of the employees in-group and
management is the management of groups.
Masculinity
A high score (Masculine) on this dimension indicates that the society will be driven by competition,
achievement and success, with success being defined by the winner / best in field a value system
that starts in school and continues throughout organisational life.
A low score (Feminine) on the dimension means that the dominant values in society are caring for
others and quality of life. A Feminine society is one where quality of life is the sign of success and
standing out from the crowd is not admirable. The fundamental issue here is what motivates
people, wanting to be the best (Masculine) or liking what you do (Feminine).
Sri Lanka, with a very low score of 10, is thus considered a Feminine society. In Feminine countries
the focus is on working in order to live, managers strive for consensus, people value equality,
solidarity and quality in their working lives. Conflicts are resolved by compromise and negotiation.
Incentives such as free time and flexibility are favoured. Focus is on well-being and status is not
shown or emphasized.
Uncertainty Avoidance
This dimension, Uncertainty Avoidance, has to do with the way that a society deals with the fact
that the future can never be known: should we try to control the future or just let it happen? This
ambiguity brings anxiety with it, and different cultures have learnt to deal with this anxiety in
different ways. The extent to which the members of a culture feel threatened by ambiguous
or unknown situations and have created beliefs and institutions that try to avoid these is
reflected in the score on Uncertainty Avoidance.
The relatively intermediate score of 45 indicates that Sri Lanka does not indicate a strong
preference.
20 | P a g e
Long Term Orientation

This dimension describes how every society has to maintain some links with its own past while
dealing with the challenges of the present and future, and societies prioritise these two existential
goals differently. Normative societies. which score low on this dimension, for example, prefer to
maintain time-honoured traditions and norms while viewing societal change with suspicion. Those
with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage
thrift and efforts in modern education as a way to prepare for the future.
With an intermediate score of 45, Sri Lanka does not indicate a strong preference in this dimension.
Indulgence
One challenge that confronts humanity, now and in the past, is the degree to which small children
are socialised. Without socialisation we do not become human. This dimension is defined as the
extent to which people try to control their desires and impulses, based on the way they were raised.
A tendency toward a relatively weak control over their impulses is called Indulgence, whereas a
relatively strong control over their urges is called Restraint. Cultures can be described as
Indulgent or Restrained.
There is currently no score for Sri Lanka in this dimension.
21 | P a g e
Sri Lankan Cuisine
Foods in Sri Lanka can be hot or very

mild or can be combination being very
much a question of individual
preference. Sri Lankan food is unique for
their Culture. Many Sinhala food items are
derived from Chena cultivation.Sri Lankan
cuisine plays a vital role in the islanders
life from the most auspicious Sinhala/
Hindu New Year to normal day-to-day
practices. They make milk rice and special sweets with coconut milk, floor and Honey at cultural
festivals. It is recognized as one of the sixty- four types of art, Siu Seta kalawa. The curries
come in many verities of colors and flavors blended in Sri Lankan Hot Spices has a great
ayurvedic value when used in curries.
Most of the Sri Lankans eat vegetables. With a large community of farmers the Rice and curry is
the main food in Sri Lanka. Sri Lanka curries are known for their fiery hot spicy flavors and
coconut milk is very distinct feature of Sri Lankan cuisine that different regions of country
specialize in different types of dishes. The specialty in Sri Lankan food is that same food is
differently made in different regions. Dishes from the North region of Sri Lanka have distinct
south Indian flavors.
Dishes from the South region of Sri Lanka can be Spicy, Hot or Mild. The meals of the southern
region of Sri Lanka are known for their variety and fishing village though the coastal strip.
Ambulthiyal a unique spicy fish preparation with thick gamboges Goraka paste.
Certain types of fish Balaya , Kelawalla are native to Southern seas. Lunu dehi (lime pickle)
and jaadi (Pikled fish) are food items made from methods of preserving since they could dry them
in sun during rainless days. Western region of Sri Lanka has foreign influence much more than
other regions. Many items made using wheat flour always had made Sri Lankan dishes foreign.
22 | P a g e
Since upper western coastal region is dry, fish is dried with salt as a preservative. This is called
Karawala (dry fish).
Spices such as Cloves, Cardamoms, nutmeg and pepper are found in abundance throughout
Kandy and Matale District in Central region of Sri Lanka. Eastern province constitutes three
major ethnic groups. Sinhala, Muslim and Tamil, Chena cultivation, Game meat from nearby
forests and dry Weather have influenced many food items. Staple diet of Sri Lanka is Rice and
curry the word curry convering a multitude of dishes which are made according to different
methods of cooking from Soups, meat, Sea food, Lentils, Vegetables, Sambols, Mallums, Phies to
Achcharus. Curd and Treacle and Sweetmeats made from Rice flour and palm treacle, jiggery
along with various types of fruits are additions to the meal as the dessert. The Palm, Coconut,
Kithul, Palmyra from which the treacle is made will vary accordingly. Sri Lankans also like
several juicy sweetmeats like Kavum, kokis, Halape, Thalaguli and Wattalapam etc. Sri Lankans
also like to have drinks like tea and coffee.
Foods Highlights
Milk Rice (Kiri Bath)
Milk rice or Kiribath is a traditional Sri Lankan dish
made from rice. It is a popular festive dish or any
auspicious moment.The dish is prepared by cooking rice
with coconut milk, hence this name. The recipe for
Kiribath is fairly simple.
Rice and Curry in Sri Lanka

Rice is the staple food of the Sri Lankans. Almost
every household in Sri Lanka takes rice and curry as
its main meal. Meat, fish and vegetables are prepared
as curries. Sliced onions, green chilies, black pepper,
cinnamon, cardamom, cloves, nutmeg and saffron are
used to add flavors. A basic rice and curry requires one
fish (or beef or chicken) curry, two different
vegetables, one portion of fried crispy stuff.
23 | P a g e
Sour fish curry (Malu Ambul thiyal)

Malu Ambulthiyal a unique spicy fish preparation with thick
gamboges Goraka paste. This is a very popular dish of a
fish steak (usually an oily fish like kingfish) in a sour curry
sauce. Sri Lanka has a great selection of delicious fish. Best
accompaniment if you want to bring down a few blocks of
milk rice or a few hoppers and pittu as well.
Potato Curry (Ala Hodi)

Boiled potatoes well cooked on thick coconut milk is the
basic recipe of this particular food item. Selected as one of
the favorite curries among the local citizens, Potato curry
can be accompanied with almost any main course and
nutritious wise the curry itself stands on a stable stage.
Achcharu
Made with green chili, onions and mustered cream.
Hoppers (Appa)
There are various types of Hoppers in Sri Lanka.
Plain hoppers, egg hoppers, milk hoppers, honey
hoppers and string hoppers.
* Plain hoppers are bowl-shaped thin pancakes made
from fermented rice flour.
* Egg hoppers are the same as plain hoppers, but an
egg is broken into the pancake as it cooks.
* Milk hoppers have a spoonful of thick coconut milk/coconut cream added to the doughy center.
When cooked, the center is firm to the touch but remains soft inside and is sweeter as a result of
the coconut milk.
24 | P a g e
Dos & Donts

The DO's
1) Show courtesy and respect to the clergy. From which ever religion. For example, if you're
travelling in the front seat of a bus and at the next stop a Bhuddist monk gets onboard, your
fellow passengers may relinquish their seats to him before you, but if they dont it's best you do
adn set a good example. Goes a long way.
2) Take a walk through the old streets of the Pettah and Fort. Sensible walking shoes and a bottle
of water in your backpack will be called for. It's great to see commerce at work and the aromas of
the spices and whatnot really do give you a sense of the vibrancy around you.
3) Take a ride in a tuk tuk if you've never done it before. It's a blast. just ensure the driver doesnt
get overzealous in showing you his skills.
4) Visit the museum in Colombo, the Dutch museum in Pettah and have a sundowner on the
verandah of the Galle Face Hotel.
5) Walk around the Galle Fort.
6) If you have the patience for it, go watch a 50 over cricket match. Preferably from the bar of the
SSC which overlooks the pitch.
7) When in doubt seek assistance from a police officer or soldier and they will help if it seems
like no one else will.
25 | P a g e
DONT's
1) Dont encourage beggars.
2) Dont encourage touts.
3) Dont walk about Pettah in the night.
4) Dont get into tuk tuks at night (unless you know them well). Instead use the cabs that are
prevalent in the city and suburbs.They are relatively cheap, comfortable and safe.
5) Dont fall for cons or hard luck stories. Remember the old adage...'No good deed goes
unpunished'. If it sounds too good then be wary.
6) Dont forget the mosquito repellant if you decide on shorts for a night out.
7) Dont wear clothing that can be deemed disrespectful when visiting places of worship. i.e
shorts, tops that are revealing way too much cleavage etc.
8) Dont overtip. It sets unnecessary precedents for those hapless others who patronize the place
after you.lol
9) Dont light up your cigarettes in certain open spaces as the laws concerning smokers and
smoking are rather draconian and you could end up being fined.
10) Dont drink and drive. It's not only stupid but the authorities dont take it easy when folks get
caught DUI.
11) Dont rent a car that hasnt got a comprehensive insurance plan that is current and make certain
that the passengers are covered in the plan. Takes only a few minutes to do.
26 | P a g e
12) Dont use brokers when hunting for real estate. Deal directly with the owner. The papers
advertise enough and plenty properties which the owners can be directly reached.
13) Dont overstay your visa. If you've decided to stay on for longer go directly to the Immigration
office and they will assist you.
14) Dont pay any government officials any bribes. It is demeaning to you and though they may
not know it, to them as well.
27 | P a g e
Political Environment of the Country

Prime Minister
President
Ranil Wickremesinghe
Maithripala Sirisena
since 9 January 2015
since 9 January 2015
Finance Minister
Ravi Karunanayake
Since 12 January 2015
28 | P a g e
Political System of Sri Lanka

The Democratic Socialist Republic of Sri Lanka provides for a presidential system of
government. Under the political system of Sri Lanka the president is the head of state, head of
government, head of cabinet and the commander in- chief of the armed forces.
The president is elected by the people for a term of six years and is entitled for re-elections for
two consecutive terms. An outstanding feature of the political system of Sri Lanka is the
enormous size of its cabinets whereby the constitution assigns 28 ministerial level portfolios
which includes two held by the president.
Functions of the President
The president of Sri Lanka holds the most important national office and is accountable to the
parliament. Major functions of the president include:
Appoints the prime minister with the approval of the parliament

Select members of cabinet in consultation with the prime minister and also presides over
their deliberations
The president can dissolve parliament at any point of time and call for fresh elections.
Declarations of war and peace in Sri Lanka
During a public emergency the president can enact measures without parliamentary
approval.
Judiciary
Headed by a Chief Justice, the Supreme Court of Sri Lanka consists between six to eight associate
justices. The president appoints the justices of the Supreme Court and High Court. The grounds
under which superior court justices can be removed are incompetence or misconduct. Justice of the
High Court can only be removed by a Judicial Service Commission comprising of Supreme Court
Justices. The Supreme Court has the authority of judicial review and can also order a referendum
on special issues concerning national significance.
29 | P a g e
Major Political parties

Party
Symbol/ Logo/ Flag
Alliance
Sri Lanka Freedom Party (Sinhalese: Sri

Lanka Nidahas Pakshaya)
Sri Lanka Muslim Congress
Hand
UPFA
Tree
UPFA
Tamil Eelam Liberation Organization
Light House
TNA
United National Party
Elephant
UNF
Political Stability
Definition: The Corruption Perceptions Index is an indicator of perceptions of public sector
corruption, i.e. administrative and political corruption. The indicator values are determined by
using information from surveys and assessments of corruption, collected by a variety of reputable
institutions.
World Corruption perceptions - Transparency International: The average for 2011 was 41.13
points. The highest value was in New Zealand: 95 points and the lowest value was in Somalia: 10
points. Below is a chart for all countries where data are available for: Corruption perceptions Transparency International.
World Ranking: Sri Lanka 92nd 38 points
World Ranking: India 90th 38 points
Asia Corruption perceptions - Transparency International: The average for 2014 was 38.75
points. The highest value was in Singapore: 84 points and the lowest value was in North Korea: 8
points. Below is a chart for all countries where data are available for: Corruption perceptions Transparency International.
Asia Ranking: Sri Lanka 20th 38 points
Asia Ranking: India 18th 38 points
30 | P a g e
Sri Lanka Is A Corrupt Nation
Source: (October 03 2015 The Sunday leader)
By Easwaran Rutnam
Public sector corruption is still high in Sri
Lanka, and by the looks of it we have a long
way to go to clear our name.
According to Transparency International, Sri
Lanka is ranked 79 from among 174
countries in the corruption index for last year
as compared to 86 the previous year.
The least corrupt nation is at number one while the worst is at number 174 and based on that Sri
Lanka is on the margin between the good and bad.
Sri Lanka is only one rank better than China, who just so happens to be Sri Lankas biggest
development assistance partner.
What the government cannot be proud of however is that countries like Tunisia and Rwanda are
better than Sri Lanka when it comes to corruption in the public sector.
The police are among the corrupt public sector workers in Sri Lanka as they accept bribes when
carrying out investigations or are on traffic duty.
Even the State owned Ceylon Electricity Board (CEB) is corrupt and this, in part, caused the
increase in electricity tariffs recently.
Giving evidence before a Transparency International peoples tribunal last Thursday on whether
electricity bills were justified, the Peoples Movement Against Increasing Electricity Tariffs
representative Saman Rathnapriya said the CEB losses, corruption and wastage were the reason
for the recent exponential tariff increase.
Rathnapriya said he had documents that he would place before the tribunal, which indicated that
the Sampur power plant currently under construction would be an inefficient one that would place
further burdens on the electricity consumers once the plant was commissioned.
Rathnapriya charged that the Power Minister at the time John Seneviratne had not been aware of
the Sampur Agreement and that Sri Lanka had entered into the agreement with an Indian
company without the approval of the CEB board of directors. He said that while the agreement
31 | P a g e
claimed the Sampur plant would run at 40% efficiency the actual efficiency of the plant was 35%
resulting in losses of between 2.6 and 4.9 billion rupees.
One of the most notable cases in public sector corruption came to light when the North Central
Province Road Development Authority (NCP RDA) interdicted two of its highest ranking officers
and started investigating allegations of massive corruption prior to the Deyata Kirula exhibition in
2012.
The Transparency International Sri Lanka led Coalition Against Corruption (CAC) had revealed
that over 3,000 million rupees had been swindled during the construction and development of
roads by the NCP RDA prior to the exhibition.
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) had launched an
investigation following a written complaint by the NCP RDA officials along with the provincial
administration.
NCP RDA also suspended payment of Rs 14, 000 million to the contractors who were allegedly
authorized to repair the roads affected by floods during year 2011.
These acts of fraud had taken place when roads were extended to cover about 410km. More than
30 roads were developed before the Deyata Kirula exhibition. An allocation of Rs 7,500 million
had been made for the development of roads during the period 2008 2012. It included Rs 2,500
million from the North Central Province Fund, Rs 1,500 million from JICA and Rs 3,500 million
from the Asian Development Bank.
Inspector General of Police, N. K. Ilangakoon had also directed the police to conduct an
investigation into this massive corruption after officials of the NCP RDA made the complaint.
In order to eliminate corruption in the public sector, Transparency International says the CIABOC
needs to be given greater independence and empowerment, and have adequate human and
infrastructure resources.
It also said that there are areas of essential legal reforms in enhancing the operational efficiency
and effectiveness of Anti-Bribery and Corruption based law enforcements.
Right to information, whistle blower protection and witness protection are some of the key areas
Transparency International feels need to be in place as a step to fight corruption.
Transparency International says all stakeholders must have access to information from State
agencies on time and in required detail. Sri Lanka still lacks a robust Right to Information law. Its
enactment will be a great inducement to our common vision.
32 | P a g e
Transparency International also says corruption is a main factor that prevents investment. A safe
equal playing field for investment requires the absence of corruption. Elimination of corruption is
possible through effective anti-corruption measures. A primary need is to have an effective
whistle blower protection system.
It also says an equally important aspect of a conducive environment is effective witness
protection. In the absence of whistle blower and witness protection, eliminating corruption will
not be possible.
33 | P a g e
Macro and Micro Risks

Macro Risks
A type of political risk in which political actions in a host country can adversely affect all foreign
operations. Macro risk can come about from events that may or may not be in the reigning
government's control.
Micro Risks
Specific type of political risk category. Corporations doing business in other nations may face
internal turmoil or anti-foreign sentiment. Vandalism, civil unrest, rioting, and nationalization of
corporate assets by foreign governments are all factors in Micro country risks.
34 | P a g e
Legal Environment of the Country

Sri Lankan Legal System
Hierarchy of courts.
Sri Lankan law is based on English common law system. As a result, the English law
principles such as judicial precedent (lower courts follow the reasoning of the higher
courts in similar, subsequent cases) and ratio decidendi (reasons for judgment) govern the
interpretation of the case law. Civil cases are heard by the District Courts, and the
Criminal cases by Magistrates Courts and High Courts. From decisions of these trial
courts, an appeal lies to the Court of Appeals and then to the Supreme Court.
Parliament makes law in Sri Lanka . Laws are published in Acts of Parliament. The term
Ordinance refers mostly to legislation passed during the British rule, the term Law or
Act refers to more recent legislation. In most laws, the Parliament delegates the rule
making authority to administrative (executive) agencies. The rules or regulations made by
such agencies are published in the Government gazette.
35 | P a g e
Economic Environment of the Country

Type of Economy
The country's economy has traditionally been based on agriculture, which now contributes less
than 20% to the gross domestic product and employs about a third of the work force. The
emphasis is on export crops such as tea, rubber, and coconuts (all plantation-grown). Cinnamon,
cardamom, pepper, cloves, nutmeg, citronella, tobacco, cocoa, and coffee are also exported. Rice,
sugarcane, grains, pulses, oilseed, fruit, and vegetables are grown for local use and consumption.
Petroleum refining is important, and amorphous graphite, precious and semiprecious gems,
mineral sands, clay, and limestone are mined. Port construction, telecommunications, and
offshore insurance and banking are also important industries. Remittances from Sri Lankans
working abroad, mainly in the Middle East, contribute significantly to the economy. The island's
swift rivers have considerable hydroelectric potential.
Historically, industry centered chiefly around the processing of agricultural products, but textiles
and garments are now Sri Lanka's biggest export. Sri Lanka has a persistent balance of trade
problem, however, and the country is dependent on large amounts of foreign aid. Although
coastal lagoons provide many sheltered harbors, only S Sri Lanka lies on the main world shipping
routes. The port of Colombo, on which most of the country's railroads converge, handles most of
the foreign trade. Exports include textiles and apparel, tea and spices, diamonds, emeralds, rubies,
coconut products, rubber goods, and fish. Textile fabrics, mineral products, petroleum, foodstuffs,
machinery, and transportation equipment are imported. The United States, India, and Great
Britain are the largest trading partners.
The country's economy has traditionally been based on agriculture, which now contributes less
than 20% to the gross domestic product and employs about a third of the work force. The
emphasis is on export crops such as tea, rubber, and coconuts (all plantation-grown). Cinnamon,
cardamom, pepper, cloves, nutmeg, citronella, tobacco, cocoa, and coffee are also exported. Rice,
sugarcane, grains, pulses, oilseed, fruit, and vegetables are grown for local use and consumption.
Petroleum refining is important, and amorphous graphite, precious and semiprecious gems,
mineral sands, clay, and limestone are mined. Port construction, telecommunications, and
36 | P a g e
offshore insurance and banking are also important industries. Remittances from Sri Lankans
working abroad, mainly in the Middle East, contribute significantly to the economy. The island's
swift rivers have considerable hydroelectric potential.
Historically, industry centered chiefly around the processing of agricultural products, but textiles
and garments are now Sri Lanka's biggest export. Sri Lanka has a persistent balance of trade
problem, however, and the country is dependent on large amounts of foreign aid. Although
coastal lagoons provide many sheltered harbors, only S Sri Lanka lies on the main world shipping
routes. The port of Colombo, on which most of the country's railroads converge, handles most of
the foreign trade. Exports include textiles and apparel, tea and spices, diamonds, emeralds, rubies,
coconut products, rubber goods, and fish. Textile fabrics, mineral products, petroleum, foodstuffs,
machinery, and transportation equipment are imported. The United States, India, and Great
Britain are the largest trading partners.
Sri Lanka Economic Structure: Division by Sector

The economic structure of Sri Lanka can be divided into the following sectors:
Primary Sector: Sri Lankan primary agriculture sector can be divided into three major categories
.i.e. farming, fishing and aquaculture. As of 2008, 32.7% of the labor force was employed in the
sector. Some major crops are rice and the staple cereal. Coconut, tea and rubber plantation is done
extensively. Tea is one of the countrys biggest foreign exchange earners. To promote Sri Lankan
Ayurveda, ganja or cannabis is also grown. The fishing sector of Sri Lanka is still recovering
from the throes of 2004 tsunami that damaged 90% of the countrys fishing boats.
Secondary Sector: The industrial sector provides employment to 26.3% of the workforce (as of
2008). Around 18% of the GDP comes from manufacturing which is also the countrys largest
industrial subsector. The construction sector contributes 7% to the GDP followed by mining and
quarrying that account for 1.5%. Measured by value addition food, beverage, and tobacco
contribute 44% followed by textiles, garment, and leather that contribute 20%. Some other major
manufacturing industries include petroleum, chemical, plastic rubber and non-metallic mineralbased products products.
37 | P a g e
Tertiary Sector: Sri Lankan services sector is the major employer as 41% of the countrys labor
force is engaged in it (as of 2008). The growth rate in 2006-07 was 7% and dropped to 5.6% in
2008 due to recession. The major contributory sectors to growth were the financial services,
telecom, trading and transport. The information technology sector is growing steadily in Sri
Lanka. Tourism, which has been one of the major foreign exchange earners for decades, is also
taking off post civil war. The target of the countrys tourism development board is to attract 2.5
million tourists and earn $2 billion by 2016.
38 | P a g e
GDP
The gross domestic product (GDP) is one of the primary indicators used to gauge the health of a
country's economy. It represents the total dollar value of all goods and services produced over a
specific time period; you can think of it as the size of the economy.
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
74.94
67.21
74.94
1.42
1960 2014
USD Billion
Yearly
The gross domestic product (GDP) measures of national income and output for a given country's
economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods
and services produced within the country in a stipulated period of time.
39 | P a g e
GDP Growth rate
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
6.40
6.40
8.60
1.50
2003 2015
Percent
Quarterly
Sri Lanka is a developing economy off the southern coast of India. In spite of years of civil war,
the country has recorded strong growth rates in recent years. The main sectors of the Sri Lanka's
economy are tourism, tea export, apparel, textile and rice production. Remittances also constitute
an important part of country's revenue.
The Gross Domestic Product (GDP) in Sri Lanka expanded 6.40 percent in the first quarter of
2015 over the previous quarter. GDP Growth Rate in Sri Lanka averaged 6.58 percent from 2003
until 2015, reaching an all-time high of 8.60 percent in the fourth quarter of 2010 and a record
low of 1.50 percent in the first quarter of 2009. GDP Growth Rate in Sri Lanka is reported by the
Department of Census and Statistics - Sri Lanka
40 | P a g e
Major industry contributors to the GDP

GDP of Sri Lanka has contribution of major industries as follows
1.
2.
3.
4.
5.
6.
7.
Agricultural
Constructions
Manufacturing sector,
Mining,
Services,
Transport,
Utility
1. Sri Lanka GDP from Agriculture
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
91274.00
99623.00
99623.00
48988.00
2002 2015
LKR Million
Quarterly
GDP from Agriculture in Sri Lanka decreased to 91274 LKR Million in the second quarter of 2015
from 99623 LKR Million in the first quarter of 2015. GDP from Agriculture in Sri Lanka averaged
72674.17 LKR Million from 2002 until 2015, reaching an all-time high of 99623 LKR Million in
the first quarter of 2015 and a record low of 48988 LKR Million in the fourth quarter of 2002. GDP
from Agriculture in Sri Lanka is reported by the Department of Census and Statistics - Sri Lanka.
41 | P a g e
2. Sri Lanka GDP from Construction
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
84445.00
86934.00
92687.00
23794.00
2002 2015
LKR Million
Quarterly
GDP from Construction in Sri Lanka decreased to 84445 LKR Million in the second quarter of
2015 from 86934 LKR Million in the first quarter of 2015. GDP From Construction in Sri Lanka
averaged 45341.50 LKR Million from 2002 until 2015, reaching an all-time high of 92687 LKR
Million in the fourth quarter of 2014 and a record low of 23794 LKR Million in the second
quarter of 2002. GDP from Construction in Sri Lanka is reported by the Department of Census
and Statistics - Sri Lanka
42 | P a g e
3. Sri Lanka GDP from Manufacturing
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
146150.00
162141.00
162141.00
71515.00
2002 - 2015
LKR Million
Quarterly
GDP from Manufacturing in Sri Lanka decreased to 146150 LKR Million in the second quarter of
2015 from 162141 LKR Million in the first quarter of 2015. GDP from Manufacturing in Sri Lanka
Million in the first quarter of 2015 and a record low of 71515 LKR Million in the second quarter of
2002
43 | P a g e
4. Sri Lanka GDP from Mining
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
20169.00
30611.00
30611.00
4602.00
2002 - 2015
LKR Million
Quarterly
GDP from Mining in Sri Lanka decreased to 20169 LKR Million in the second quarter of 2015
from 30611 LKR Million in the first quarter of 2015. GDP from Mining in Sri Lanka averaged
the first quarter of 2015 and a record low of 4602 LKR Million in the fourth quarter of 2002.
44 | P a g e
5. Sri Lanka GDP from Services
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
522986.00
514141.00
534350.00
228947.00
2002 - 2015
LKR Million
Quarterly
GDP from Services in Sri Lanka increased to 522986 LKR Million in the second quarter of 2015
from 514141 LKR Million in the first quarter of 2015. GDP From Services in Sri Lanka averaged
363781.50 LKR Million from 2002 until 2015, reaching an all-time high of 534350 LKR Million
in the third quarter of 2014 and a record low of 228947 LKR Million in the first quarter of 2002.
45 | P a g e
6. Sri Lanka GDP from Transport
Actual
Previous
Highest
Lowest
Dates
105821.00
108108.00
110790.00
34984.00 2002 - 2015
Unit
Frequency
LKR Million
Quarterly
GDP from Transport in Sri Lanka decreased to 105821 LKR Million in the second quarter of
2015 from 108108 LKR Million in the first quarter of 2015. GDP from Transport in Sri Lanka
Million in the third quarter of 2014 and a record low of 34984 LKR Million in the second quarter
of 2002.
46 | P a g e
7. Sri Lanka GDP from Utility
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
24748.00
19083.00
24748.00
7695.00
2002 - 2015
LKR Million
Quarterly
GDP from Utilities in Sri Lanka increased to 24748 LKR Million in the second quarter of 2015
from 19083 LKR Million in the first quarter of 2015. GDP From Utilities in Sri Lanka averaged
the second quarter of 2015 and a record low of 7695 LKR Million in the first quarter of 2002.
47 | P a g e
GNP Per capita
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
9544608.00
8448144.00
9544608.00
4115.00
1950 - 2014
LKR Million
Yearly
Gross National Product in Sri Lanka increased to 9544608 LKR Million in 2014 from 8448144
LKR Million in 2013. Gross National Product in Sri Lanka averaged 1106498.99 LKR Million
from 1950 until 2014, reaching an all-time high of 9544608 LKR Million in 2014 and a record
low of 4115 LKR Million in 1950. Gross National Product in Sri Lanka is reported by the Central
Bank of Sri Lanka.
48 | P a g e
Inflation Trend
Inflation Rate
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
-0.30
-0.20
28.31
-0.89
1986 - 2015
percent
Monthly
2007=100
The inflation rate in Sri Lanka was recorded at -0.30 percent in September of 2015. Inflation Rate
in Sri Lanka averaged 9.95 percent from 1986 until 2015, reaching an all-time high of 28.31
percent in June of 2008 and a record low of -0.89 percent in March of 1995. Inflation Rate in Sri
Lanka is reported by the Central Bank of Sri Lanka.
49 | P a g e
Food Inflation
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
1.99
2.20
14.33
-4.08
2009 - 2015
percent
Monthly
Cost of food in Sri Lanka increased 1.99 percent in September of 2015 over the same month in
the previous year. Food Inflation in Sri Lanka averaged 5.85 percent from 2009 until 2015,
reaching an all-time high of 14.33 percent in April of 2011 and a record low of -4.08 percent in
February of 2012
50 | P a g e
Inflation Rate mom
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
-0.30
-0.50
5.19
-3.51
1985 - 2015
percent
Monthly
2007=100
The Consumer Price Index in Sri Lanka decreased 0.30 percent in September of 2015 over the
previous month. Inflation Rate Mom in Sri Lanka averaged 0.77 percent from 1985 until 2015,
reaching an all-time high of 5.19 percent in May of 1995 and a record low of -3.51 percent in
September of 1994. Inflation Rate Mom in Sri Lanka is reported by the Central Bank of Sri
Lanka.
51 | P a g e
Core Inflation Rate
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
4.40
2.80
12.76
0.82
2004 - 2015
percent
Monthly
2007=100
Core Inflation Rate in Sri Lanka increased 3.50 percent in July of 2015 over the same month in
the previous year. Core Inflation Rate in Sri Lanka averaged 7.12 percent from 2004 until 2015,
reaching an all-time high of 12.76 percent in September of 2008 and a record low of 0.82 percent
in February of 2015. Core Inflation Rate in Sri Lanka is reported by the Central Bank of Sri
Lanka.
52 | P a g e
Balance of Trade
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
-601.80
-689.20
-50.10
-1100.70
2003 - 2015
USD Million
Monthly
Sri Lanka exports mostly textiles and garments (40% of total exports) and tea (17%). Others
include: spices, gems, coconut products, rubber and fish. Main export partners are United States,
United Kingdom, Germany, Belgium and Italy. Sri Lanka imports petroleum, textile fabrics,
foodstuffs and machinery and transportation equipment. Main import partners are India, China, Iran
and Singapore. This page provides the latest reported value for - Sri Lanka Balance of Trade - plus
previous releases, historical high and low, short-term forecast and long-term prediction, economic
calendar, survey consensus and news. Content for - Sri Lanka Balance of Trade - was last refreshed
on Sunday, October 4, 2015.
Sri Lanka recorded a trade deficit of 601.80 USD Million in July of 2015. Balance of Trade in Sri
Lanka averaged -446.72 USD Million from 2003 until 2015, reaching an all-time high of -50.10
USD Million in May of 2003 and a record low of -1100.70 USD Million in November of 2011.
Balance of Trade in Sri Lanka is reported by the Central Bank of Sri Lanka.
53 | P a g e
Current Account
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
-54242.00
-88525.00
30854.90
-189897.00
1997 - 2015
LKR Million
Quarterly
Current Account is the sum of the balance of trade (exports minus imports of goods and services),
net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).
This page provides the latest reported value for - Sri Lanka Current Account - plus previous
releases, historical high and low, short-term forecast and long-term prediction, economic
calendar, survey consensus and news. Content for - Sri Lanka Current Account - was last
refreshed on Sunday, October 4, 2015.
Sri Lanka recorded a Current Account deficit of 54242 LKR Million in the first quarter of 2015.
Current Account in Sri Lanka averaged -40031.61 LKR Million from 1997 until 2015, reaching
an all-time high of 30854.90 LKR Million in the third quarter of 2010 and a record low of 189897 LKR Million in the fourth quarter of 2011. Current Account in Sri Lanka is reported by
the Central Bank of Sri Lanka
54 | P a g e
Government Debt to GDP
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
75.50
78.30
103.20
75.50
1990 - 2014
percent
Yearly
Generally, Government debt as a percent of GDP is used by investors to measure a country ability
to make future payments on its debt, thus affecting the country borrowing costs and government
bond yields. This page provides - Sri Lanka Government Debt To GDP - actual values, historical
data, forecast, chart, statistics, economic calendar and news. Content for - Sri Lanka Government
Debt to GDP - was last refreshed on Sunday, October 4, 2015.
Sri Lanka recorded a Government Debt to GDP of 75.50 percent of the country's Gross Domestic
Product in 2014. Government Debt to GDP in Sri Lanka averaged 90.83 percent from 1990 until
2014, reaching an all-time high of 103.20 percent in 2001 and a record low of 75.50 percent in
2014. Government Debt to GDP in Sri Lanka is reported by the Central Bank of Sri Lanka.
55 | P a g e
Wages
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
8839.35
7556.25
8839.35
3121.95
1997 - 2008
LKR/Month
Yearly
Wages in Sri Lanka increased to 8839.35 LKR/Month in 2008 from 7556.25 LKR/Month in 2007.
Wages in Sri Lanka averaged 5345.44 LKR/Month from 1997 until 2008, reaching an all-time
high of 8839.35 LKR/Month in 2008 and a record low of 3121.95 LKR/Month in 1997. Wages in
Sri Lanka is reported by the Central Bank of Sri Lanka.
56 | P a g e
Unemployment rate
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
4.50
4.70
11.30
3.90
1996 - 2015
percent
Quarterly
Unemployment Rate in Sri Lanka decreased to 4.50 percent in the second quarter of 2015 from
4.70 percent in the first quarter of 2015. Unemployment Rate in Sri Lanka averaged 5.61 percent
from 1996 until 2015, reaching an all-time high of 11.30 percent in the fourth quarter of 1996 and
a record low of 3.90 percent in the third quarter of 2011. Unemployment Rate in Sri Lanka is
reported by the Department of Census and Statistics - Sri Lanka
57 | P a g e
Unemployed person
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
381.00
384.00
964.00
308.00
1990 - 2014
Thousand
Yearly
The number of unemployed persons in Sri Lanka decreased to 381 Thousand in 2014 from 384
Thousand in 2013. Unemployed Persons in Sri Lanka averaged 584.36 Thousand from 1990 until
2014, reaching an all-time high of 964 Thousand in 1990 and a record low of 308 Thousand in
2011. Unemployed Persons in Sri Lanka is reported by the Asian Development Bank.
58 | P a g e
Exchange Rate
Daily Exchange Rates
Currency
02.10.2015
Buying Rate (Rs.)
Selling Rate (Rs.)
Dollar (USA)
138.9400
143.4400
Pound (UK)
209.6000
217.9000
Euro (EU)
154.5400
161.3500
Franc (Switzerland)
141.2100
147.7500
Dollar (Canada)
104.2600
109.0200
Dollar (Australia)
96.8900
101.9100
Dollar (Singapore)
96.4900
100.6200
Yen (Japan)
1.1523
1.2025
Last 10 years (LKR-USD)
59 | P a g e
Exchange Rate - Last 10 year (LKR INR)
60 | P a g e
FDI Flow in the country
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
128.00
351.00
386.00
20.00
2001 - 2015
USD Million
Quarterly
Foreign Direct Investment in Sri Lanka decreased to 128 USD Million in the first quarter of 2015
from 351 USD Million in the fourth quarter of 2014. Foreign Direct Investment in Sri Lanka
averaged 126.98 USD Million from 2001 until 2015, reaching an all-time high of 386 USD
Million in the fourth quarter of 2013 and a record low of 20 USD Million in the second quarter of
2001. Foreign Direct Investment in Sri Lanka is reported by the Central Bank of Sri Lanka.
61 | P a g e
Trading Environment
Imports
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
1533.90
1633.30
1986.40
408.00
2001 - 2015
USD Million
Monthly
Sri Lanka imports petroleum, textile fabrics, foodstuffs and machinery and transportation
equipment. Main import partners are India, China, Iran and Singapore. This page provides the
latest reported value for - Sri Lanka Imports - plus previous releases, historical high and low,
short-term forecast and long-term prediction, economic calendar, survey consensus and news.
Content for - Sri Lanka Imports - was last refreshed on Sunday, October 4, 2015.
Imports in Sri Lanka decreased to 1533.90 USD Million in July from 1633.30 USD Million in
June of 2015. Imports in Sri Lanka averaged 1076.80 USD Million from 2001 until 2015,
reaching an all-time high of 1986.40 USD Million in November of 2011 and a record low of 408
USD Million in February of 2002. Imports in Sri Lanka is reported by the Central Bank of Sri
Lanka.
62 | P a g e
Exports
Actual
Previous
Highest
Lowest
Dates
Unit
Frequency
932.10
944.10
1069.90
304.80
2003 - 2015
USD Million
Monthly
Sri Lanka exports mostly textiles and garments (40% of total exports) and tea (17%). Others
include: spices, gems, coconut products, rubber and fish. Main export partners are United States,
United Kingdom, Germany, Belgium and Italy. This page provides the latest reported value for Sri Lanka Exports - plus previous releases, historical high and low, short-term forecast and longterm prediction, economic calendar, survey consensus and news. Content for - Sri Lanka Exports
- was last refreshed on Sunday, October 4, 2015.
Exports in Sri Lanka decreased to 932.10 USD Million in July from 944.10 USD Million in June
of 2015. Exports in Sri Lanka averaged 687.47 USD Million from 2003 until 2015, reaching an
all-time high of 1069.90 USD Million in March of 2014 and a record low of 304.80 USD Million
in April of 2003. Exports in Sri Lanka is reported by the Central Bank of Sri Lanka.
63 | P a g e
Exports commodities
Textiles and garments

Tea
Spices
Gems
Coconut products
Rubber
Fish
Imports commodities
Petroleum
Textile fabrics
Foodstuff
Machinery
Transportation equipment
64 | P a g e
Tariff and Non-Tariff Barriers

Tariff Barriers
The most widely utilized barrier to market access for goods is customs duties; also this is
referred to as tariffs.
An import tariff is a tax that is levied on goods when they imported to a country for domestic
consumption and this has been the most common method used by governments to protect
domestic industry from foreign competitors and also as a means of raising government revenue.
In the current world countries are shifting from high tariffs to value-added for revenue purposes
and such taxes are also based on the value of the goods
In general there are three types of tariffs:
An ad valorem tariff that is based on a fixed percentage of the value of the good that is being
imported; for example, 7% of the value of computer equipment;
A specific tariff that prescribes an amount of money and doesn't vary with the value of the
imported good but may based on the quantity or weight of the good;
A mixed tariff, which is a combination of the two types of tariff previously mentioned.
Although there are three categories of tariffs most commonly used tariff type is Ad valorem
customs duties. These custom duties remain an important barrier to trade because of below
reasons,
Most developing countries still maintain high customs duties.
Developed countries still have high, to very high, duties on specific groups of 'sensitive'
industrial and agricultural products.
In competitive markets and in trade between neighboring countries, a very low duty may still
constitute a barrier
In simple terms when application of tariffs it will raise the price of the importing good which
most of the time it's well above the local production as shown in the below table and figure.
65 | P a g e
Current tariffs in Sri Lanka are under following categories.

Tariff barriers
1.
2.
3.
4.
5.
6.
7.
8.
9.
Customs Duty
Surcharge
Port and Aviation Levy ( PAL)
Cess Levy
Value Added Tax (VAT)
Exercise Duty
RIDL
SRL
Nation Building Tax (NBT)
Non-Tariff barriers
Non-tariff barriers are barriers that restrict imports in some way other than the imposition of a
tariff. Normally they are many in numbers and may impact on trade direct or indirect means to
limit or restrict free trade. These barriers can be listed as follows,
1. Quantitative restrictions:
2. Quota
3. Voluntary Export Restraints
4. Automatic and non-automatic Licensing
5. Other Non-Tariff Barriers:
6. Exchange controls
7. Embargoes
8. Production subsidies.
9. Technical Regulations, Standards and conformity assessment procedures
10. Sanitary and Phytosanitary Measures
11. Lack of Transparency in government requirements
12. Unfair and arbitrary application of the government regulations
13. Customs formality and procedures
14. Pre shipment inspection
15. Origin Requirements
16. Government Procurement Requirements
66 | P a g e
Free Trade Agreement

List of countries with Sri Lanka has cooperative agreements and the
performance of the agreement.
1.
2.
3.
4.
India
Pakistan
China
Bangladesh
Free Trade Agreements with India

INDO-SRI LANKA FREE TRADE AGREEMENT (ISFTA)
The Indo-Sri Lanka Free Trade Agreement (ISFTA), which was signed on 28th December 1998
and entered into force with effect from 1st March 2000, provides duty free concessions to a wide
range of products traded between the two countries. Sri Lankas final tariff liberalization
commitment under ISFTA came into effect since November 2008 and with this completion of
the commitment, the ISFTA which came into effect from March 2000 has been fully
implemented. However, Sri Lanka has already got a fully duty free access to the vast Indian
market under the ISFTA since the end of March 2003. Thus, the entrepreneurs based in Sri
Lanka can now export more than 4000 product lines to the Indian market on duty free basis.
The objectives of this Agreement are:
(i) To promote through the expansion of trade the harmonious development of the economic
relations between India and Sri Lanka.
(ii) To provide fair conditions of competition for trade between India and Sri Lanka
(iii) In the implementation of this Agreement the Contracting Parties shall pay due regard to the
principle of reciprocity
(iv) To contribute in this way, by the removal of barriers to trade, to the harmonious
development and expansion of world trade.
67 | P a g e
Other Aspects of Environment

Infrastructure
The Sri Lankan government has launched an ambitious program of physical infrastructure
development to completely upgrade the sea, air, road, and power and telecom backbone of the
country. The following are the main features of this program:
1. Sea Port and Airport Development
The Sri Lankan government has declared its intention to develop the country as a leading regional
aviation, navigation and trading hub in South Asia. Therefore, the development of maritime &
aviation transportation is at the forefront of the government's infrastructure development agenda.
The focus of these developments is to expand the capacity and improve the efficiency of existing
ports through modernization and construction of new ports and airports in strategic locations.
Major Sea Port and Airport development:
Colombo South Port Expansion

The Colombo South Port expansion project with three terminals,
each terminal having capacity of 2.4 million TEUs per annum, will
increase the capacity of the Colombo Port by 160% upon
completion. Construction work of the breakwater has been
completed. The first terminal, a join venture between the Sri Lanka
Ports Authority and China Merchant Holdings Ltd, was built under
a 35 year build operate and transfer agreement with SLPA. The terminal was opened for
commercial operation on 5th August 2013.
Hambantota Port Development

Phase I of the project, the Mahinda Rajapaksa Magampura Port, was inaugurated in November
2010. The port is expected initially to function as a service and
industrial port and later be developed to handle transshipment cargo.
Phase II of the port is underway at an estimated cost of US$ 800
Mn. The port is ideally located to serve the main East-West shipping
lane connecting Europe and the Middle-east with South East Asia.
The bunkering facilities at the Port of Hambantota, set up at a cost
of US$ 76.5 million, and the tank farm has commenced commercial operations. Out of the 14 tanks
68 | P a g e
it has, eight tanks will be used to store marine fuel, three will store aviation fuel and three
remaining tanks will be used to store liquid petroleum.
The aviation fuel stored in the Hambantota Port is to be used for the Mattala Airport, the second
international airport currently being built in Hambantota.
Expansion of Bandaranaike International Airport

A project is under way to expand the island's first international airport
at Katunayake, 35 km north of Colombo. The project includes the
expansion of the transit area, construction of new baggage-reclaim
area, multi storied car park and widening of the existing runway. A
feasibility study is being carried out for a second runway.
Development of a second International airport at Mattala

The construction of the new international airport at Mattala in the
southern Hambantota district is carried in two phases. The first phase
was completed and opened on 18th March 2013. That includes one
runway and a taxi way that will be expanded in the second stage to
allow for larger planes, including the latest airbus A380, to land.
This airport will open up the vast southern and eastern areas of Sri
Lanka for development including tourism projects. The airport will be in close proximity to the
Hambantota port.
2. Development of High Mobility Road Network

Road development in the country, which was left behind last few
decades due to the war, has been given prominence by the
government. The national Road Master Plan has already been
prepared, which focuses on the construction of highways,
widening of highways, reduction of traffic congestion, road
maintenance & rehabilitation and bridge rehabilitation &
reconstruction.
It has become an urgent necessity for further investment in road network, thus the development of
road network has become a major determinant factor in attracting new investments to the country.
69 | P a g e
Major road development:
Colombo - Katunayake Expressway - CKE (25km)

The Colombo Katunayake Expressway connects the Colombo
City and the International Airport at Katunayake. It consists of four
Interchanges at New Kelani Bridge, Peliyagoda, Ja-Ela and
Katunayake. The Contract value of the project is US$ 292 Mn.
Construction was completed and opened for the public on 27th of
October 2013 by his Excellency the president Hon. Mahinda
Rajapakse. The CKE will reduce the travel time between Peliyagoda
and Katunayake to 20 minutes from the earlier time of 1.5 hours using Peliyagoda-Puttalam road
(A003). The quick travel between the Bandaranaike International Airport and the capital of the
country with enhanced safety will surely help to boost the country's economy in addition to
providing pleasant travel to the road users.
Southern Highway (126km)

The Southern Expressway is the longest expressway being
built in Sri Lanka. The construction of a four-lane highway
from Colombo to Matara will be a catalyst for the economic
and social development of the Southern region and promotion
of and inter-regional transport network. The highway was
opened for public on 27th November 2011.
The section of Southern Expressway from Pinnaduwa (Galle)
to Godagama (Matara) has been opened to public on 15th March 2014. This section also consists
of 4-lane capacity similar to the earlier section from Kottawa to Pinnaduwa. The maximum
operating speed for this section is also 100 kmph. Now the Southern Expressway from Kottawa to
Godagama (Matara) is in operation. It is expected to extend the Southern Expressway from Matara
to Hambantota with the intention of linking Mattala Airport and Hambantota Harbour to the
Commercial Capital, Colombo in future.
70 | P a g e
Outer Circular Highway - OCH (29.2km)
The outer Circular Highway (OCH) is located in the Colombo Metropolitan Region and passes
through two administrative districts, namely Colombo and Gampaha. This highway runs around
20 km away from the City centre of Colombo, connecting radial routes and has a total length of
29.2 km. The northern end of the highway is located at Kerawalapitiya on Colombo-Katunayake
Expressway and the southern end is located at Kottawa on Colombo-Ratnapura-WellawayaBatticaloa (A004) road where Southern Expressway meets OCH. Outer Circular highway from
Kottwawa to Kerawalapitiya will link seven trunk roads and the Colombo Katunayake and the
Southern Expressways.
Colombo - Kandy Highway (99km)
The proposed North East Expressway (Colombo Kandy Expressway) begins at Kadawatha of
the present Colombo Kandy (A1) Road (at the access point of the Outer Circular Highway) and
links with Katugastota Kurunegala Puttalam (A10) road at Hedeniya and Kandy Jaffna road
(A9) at Katugastota. The length of this road is 99 km. Construction of the North - East Expressway
is mainly divided into two construction phases viz. Phase I (KadawathaAmbepussa) 48.2 km
and Phase II (Ambepussa Katugastota) -50.7 km.
The expressway is expected to be built as a privately financed toll road and will be later expanded
to Jaffna and Trincomalee.
The cost for the first phase of the road project is estimated to be one billion US dollars..
3. Power & Energy
Development of power & energy sector is a key aspect of the
government's infrastructure development agenda and long term
strategies have been introduced with active participation of the
private sector, as a key component.
71 | P a g e
Major power projects in progress

Ambitions planes are under way to increase the national grid from 2817 MW to 4732 MW (by
2016) and to reduce the cost of generation by harnessing the latest clean coal technology.
Norochcholai Coal Power Project

The construction of first phase of the Norochcholai Coal Power
Plant (300 MW) was completed by end of 2010 and was added to
the national grid by end of March 2011. The second phase will add
another 600 MW to the national grid.
Upper Kothmale Hydro Power Project (UKHP)

The upper Kothmale project will have an installed capacity of 150MW (consisting of two 75MW
units). Construction of the project was completed and connected to the national grid on14th July
2011.
Trincomalee Coal Power Project

Sri Lanka's second coal fired thermal power plant is implemented as a joint venture of Ceylon
Electricity Board and National Thermal Power Corporation (NTPC) of India. The Joint Venture
Company has been incorporated as Trincomalee Power Company Limited on 6th September 2011.
Trincomalee Power Company Limited is responsible for implementation and operation of the 2 X
250MW coal power plant in Sampur. The total estimated cost of the project would be USD 512
Million.
The Sampoor Coal Power Plant will comprise two 250 MW power generators. The power
generated will be transmitted to the national grid through high voltage transmission lines from
Sampoor through Habarana to the Veyangoda Grid Substations.
Power Purchase Agreement, Implementation Agreement, BOI Agreement, Land Lease Agreement
and Coal Supply Agreement were signed on 07 October 2013 by relevant parties including GOSL,
CEB and JV Company. Project is expected to be commissioned before end of 2017.
72 | P a g e
4. Telecommunication Infrastructure Development
SEA-ME-WE IV
Sri Lanka is connected to the South East Asia-Middle EastWest Europe 4 (SEA-ME-WE IV) project, the submarine
cable system linking South East Asia to Europe via the Indian
Sub-Continent and Middle East. The project aims to take these
regions to the forefront of global communication by
significantly increasing the bandwidth and global connectivity
of users along its route between Singapore and France.
SEA-ME-WE 4 fiber optics cables provide a bandwidth capacity of 1.28 terabits per second, with
a 25 year guaranteed lifespan for the technology. This revolutionary submarine cable system offers
Sri Lanka an immense bandwidth advantage, and paves the way to make Sri Lanka a globally
competitive business hub.
73 | P a g e
Airports in Sri Lanka

International Airport
Location
Colombo
Airport
Bandaranayake International Airport (CMB)
Domestic Airports
Location
Airport
Ampara
Ampara
Anuradhapura
Batticaloa
Ampara Airport (ADP)

Kondavattavan Tank Airport (AFK)
Anuradhapura Airport (ACJ)
Batticaloa Airport (BTC)
Bentota River
Colombo
Dambula
Dickwella
Gal Oya
Bentota River Airport (BJT)

Ratmalana Airport (RML)
Dambulu Oya Tank Airport (DBU)
Mawella Lagoon Airport (DIW)
Amparai Airport (GOY)
Hatton
Hingurakgoda
Jaffna
Kandy
Castlereigh Reservoir Airport (NUF)

Hingurakgoda Airport (HIM)
Kankesanturai Airport (JAF)
Vic. Resevour Kandy Airport (KDW)
Katugastota
Polgolla Reservoir Airport (KDZ)
Katukurunda
Kelaniya
Koggala
Mahaweli
Katukurunda Slaf Base Airport (KTY)

Kelaniya River Airport (KEZ)
Koggala Airport (KCT)
Mahaweli Airport (KDY)
Minneriya
Minneriya Airport (MNH)
Sigiriya
Trincomalee
Weerawila
Sigiriya Slaf Base Airport (GIU)

China Bay Airport (TRR)
Weerawila Airport (WRZ)
74 | P a g e
Sea Ports in Sri Lanka

Name
Port of Colombo
City
Location
Colombo
Description
Largest port in the country
065710N 795041E
Port of
Hambantota
Hambantota
New port in the south
Trincomalee
Harbour
Trincomalee
Port of Galle
Galle
Regional Port
Port of Point
Pedro
Point Pedro
Minor harbour, the

northern-most in the
country
Kankesanthurai
Kankesanthurai
060710N 810629E
083401N 811352E
095009N 801241E
094908N 800157E
Harbour
Oluvil Harbour
Fifth largest natural

harbour in the world
Minor harbour, currently

used by the navy
Oluvil
071630N 815200E
Newly developed harbour

opened 2013
75 | P a g e
International HRM
Terms and Conditions of Employment in Sri Lanka
Law is the supreme power of a state commanding what is right and wrong. According to that
Labour law is Law for labours relating to their employment. The labour Law of Sri Lanka
could broadly be said to originate from the following;
Statutes- their objective is the regulation of minimum terms and conditions of employment
The awards, orders and judgments
Collective agreements entered in to between trade unions & employer
Labour Law in Sri Lanka commenced from about 1830 with the growth of plantation
industry. At present there are 45 labour status in operation of which some are more or less
obsolete and have any academic interest.
Terms is any undertaking in a contract being either a collection, a warranty or an in
nominate term (Osborns Concise Law Dictionary)
A condition is providing which makes the existence of a right dependant on the happening
of an event implied.
76 | P a g e
Classification of Labour Laws

1.
Statutes on regulation of wages and conditions
Employee holiday Act No 06 of 1959

Holiday Act No 29 of 1971
Privilege Leave (private) Law Act No 14 of 1976
Budgetary Relief Allowance Act No 18 of 1978
Fuel Configuration five Day Week Act
Special Allowance of Workers Law
Supplementary Allowance of Workers Act
Wages Boards Ordinance No 43 of 1941
Shop and office Employees Act No 43 of 1950
2.
Statutes on employee welfare
Workmens Compensation Ordinance No 19 of 1934

Factories Ordinance No 45 of 1942
Employee provident fund Act No 46 of 1980
Payment Gratuity Act No 12 of 1983
3.
Statutes on industrial relations
Trade Union Ordinance No 14 of 1935

Industrial Dispute Act No 43 of 1950
Termination of Employment of workmen Act No 45 of 1971
Employee Council Act No 12 of 1979
77 | P a g e
4.
Statutes on obtaining jobs & training
Service contract Ordinance no 11 of 1865

Registration of Domestic Services Ordinance No 28 of 1871
Chauffeurs Regulation Ordinance No 23 of 1912
National Apprenticeship Act No 49 of 1971
Employment of Trainees Act No 08 of 1978
Foreign Employment Agency Act No 32 of 1980
Sri Lankan Bureau of Foreign Employment Act No 21 of 1985
5.
Statutes on women, young person and children
Mines (prohibition of female labour underground) Ordinance No 13 of 1937

Maternity Benefits ordinance No 32 of 1939
Mines, Quarries and Minerals Ordinance No 55 of 1947
Employment of Women, young Persons & Children Act No 47 of 1956
6.
Statutes on Indian labourers
Estate Labour (Indian) Ordinance No 13 of 1899

Medical Wants Ordinance No 17 of 1880
Diseases (labourers) Ordinance No 10 of 1912
Thundu Prohibition Ordinance No 43 of 1921
Minimum Wages (Indian labour) Ordinance NO 27 of 1927
Even though there are many labour laws practice in Sri Lanka I was selected some Labour
Acts which are mainly emphasis the Terms and conditions of Employment in Sri Lanka.
78 | P a g e
WAGES BOARD ORDINANCE

In 1928 Labour organization adopted convention No 26; creation of minimum wage fixing
machinery. Sri Lanka enacted minimum wages Ordinance of 1927 through tripartite
machinery for fixation of minimum wage, working hours, minimum age for employment.
Machinery embracing all sectors of labour was a crying need at the time. Introduction of the
wages board ordinance No 27 of 1941 fulfilled that need.
The Ordinance is in three parts;
Part 01- Provisions relating to all trades.
Payment of wages
wages shall be paid without any deduction other than an authorized deduction (include
any cash advance, payment of rent, payment of loan, contribution to person, provident fund,
insurance, saving, medical or welfare scheme, ect.)
Maximum Deduction
-75% in the case of workers in any trade specified by the Minister by notification in the
gazette; cocoa, cardamom & pepper trade, rubber trade,
coconut trade.
-50% in the case of workers in any other trade.

Wage Period
a) If the wage period is one week within three days of the end of the week
b) If the wage period is two weeks - within five days of the end of the week
c) If the wage period is one month within ten days of the end of the month
Employer can keep the wage with him if payment is impossible & pay at the earliest
opportunity. On the termination of the employment wages due shall be paid before the
expiry of the 2nd working day after such termination.
79 | P a g e
Maintenance of Wage records

The employer shall maintain & keep accurate & clear records in writing in respect of; names
of the workers, number of hours or days worked, wages paid. Date of payment &
deductions. These records must be maintained for a period of 4 years.
Penalty for failure to comply
For breach of any provision of part 1, an employer is liable up to a fine of Rs. 1000 or to
imprisonment for a term not exceeding 6 months or to both. He is also liable to pay any
wages found due.
Part 02- Provisions relating to particular trades.

Establishment of Wages boards
Minister of labour is entitled to constitute a wage board for any trade by considering the
request made by employer of a particular trade or employees of a particular trade or on his
own.
Annual Holiday
Majority of the Wages Boards have accepted number of Annual Holiday is 14 days. In
Wages Boards of security Service, Nursing Annual Holiday is 21 days. In Wages Boar ds of
Tea, Rubber, Coca Annual Holiday is 14 days. In Wages Boards of Paddy Hulling Annual
Holiday is 18 days.
Statutory Holiday
Majority of the Wages Boards have declared 8 statutory holidays as public holidays.
80 | P a g e
Parts 03- General matters.

SHOP AND OFFICE EMPLOYEES ACT
Shop and office employees Act No 19 of 1954, replaced the Shops Ordinance No 66 of
1938.The preamble to the Act states that An Act to provide for the regulation o
employment, hours of work and remuneration of person in shop and office, and for matters
connected therewith or incidental thereto.
Hours of Work
A normal days work is limited to 8 hours and a normal working week is limited to 45
hours.
Only in restaurants and hotels, could a female over 18 and male over 16 be employed from 6
p.m to 10 p.m.
Only on residential hotel could a female over 18 be employed between 6p.m & 6a.m and in
an office maintained by an air line at the air port.
Weekly Holidays
On completion of 28 hours of work in a week, the law provides for the granting of one and
half days holiday with pay.
Annual Holiday
The total annual leave entitlement is 14 days.
Public Holidays
The eight public holidays are granted with remuneration.9 Tamil Thi pongal day, National
day, The day prior to Sinhala Hindu New Year, The Sinhala Hindu New years day, May
day, The day after the full moon poya day month of vesak, prophet Mohammeds birth day,
Christmas day)
81 | P a g e
Casual Leave
The entitlement for a calendar year is 7 days.

This is to be utilized on account of private or ill- health.
In the commencing year of employment one day is granted for every two completed months.
Maternity Leave
Female employees are entitle to maternity leave on the following basis;

a)
84 days leave in respect of the first two live births.
b)
42 days leave in respect of the third & subsequent births of for confinements resulting
in the issue of a viable fetus.

Salary Payment
The Act places time limits within which salaries should be paid.
Salaries up to one week, within next 3 days
Salaries over 1 week & up to two weeks with in the next 5 days.
Salaries in excess of two weeks and up to one month, with in the next 10 days.
Deduction from salary

Authorized Deductions The aggregate deduction limit is 60% from the total remuneration.
Other Deduction In respect of other deductions, the consent of the employee is not
necessary.
82 | P a g e
TERMINATION OF EMPLOYMENT OF WORKMEN

The Termination of Employment of Workmen Act No 45 of 1971 was introduced by the
Government under Security Ordinance a set of emergency regulations to control
retrenchments. These regulations were later regularized by an Act of Parliament.
How to Terminate Services of employee by the Employer

No employer shall terminate the scheduled employment of any workman without;
The prior written consent of the workman or;
The prior written approval of the Commissioner of Labour
Employers & Workmen not covered by the Act
An employer by whom less than 15 workmen on an average have been employed during the
last six months.
If employee has been employed for less than 180 continuous periods of 12 months
commencing from the date of employment.
Consequences of Termination in Breach of Act
Where an employer terminates the employment of workman in breach of the Act;

Such termination is illegal, null and void and of no effect.
The Commissioner may order the employer to continue to employ the worker from a
specified date in the same capacity & t pay wages and all the benefits.
Employer fails to comply with the above; he is guilty offence, liable to conviction &
imprisonment 7 to payment of a fine Rs. 50 for each day in delay.
83 | P a g e
EMPLOYEE PROVIDENT FUND

The objective of the Employee Provident Fund act No 15 of 1958 is to provide retiring
benefits to employed persons in the private & state sector undertaking through the
machinery of a contributory provident fund.
Employment & persons covered
The act applies only to those employments which have been declared by regulation to be
covered employments.
Practically every employment in Sri Lanka is a covered employment except for the
employments and persons under noted.
Trainees are entitled to provident fund. But NAITA apprentices are should not contribute to
the fund.
Rate of Contribution
12% by employer & 8% by employee.
Total Earnings
Basic wage or salary.
Cost of allowance, special living allowance & other similar allowances.
Payment in respect of holidays.
Cash value of any cooked or uncooked food provided to employee.
Meal allowances.
Commissions paid to employees for any services rendered to the employer.
Enhanced Rates of Contribution
An employer & employee can, by mutual agreement, elect to pay a higher rate of
contributions to the fund
84 | P a g e
The employer is required to deduct the contribution & send to the fund before the end o f the
following month.
Where the employer fails to do so & is unable to satisfy the Commissioner that the failure to
do so was beyond his control, the employer is liable to pay a surcharge. The surcharge
payable are as follows;
Not exceeding 10days 5%
Between 10 days & one month- 15%
Between 1 month and 3 month- 20%
Between 3 months and 6 months 30%
Between 6 months & 1 year 40%
Exceeding one year 50%
EMPLOYEES TRUST FUND
The bill of Industrial Relations Act of 1978 contained provisions related to establishment of
a Trust Fund Board. The government resolves to enact separate legislation due to certain
policy decisions. But the Employees Trust Fund Act No 46 of 19870 was enacted as a
separate legislation.
The objectives of the Employees Trust Fund are promoting employee ownership, promote
employee participation and provide non- contributory benefits to retirement.
Contribution
Employers responsibility to make contribution equivalent to 3% of the monthly total
earnings of every employee.
Contribution of a particular month should be paid on or before the last working day of the
succeeding month.
Self Employed Persons
A self-employed person may become a member of the fund by sending a notice to the Board
indicating his desire to become a member.
After the applicant is being accepted, he shall be liable to pay 3% from his total earnings.
85 | P a g e
International Logistics
When preparing to ship a product overseas, the exporter needs to be aware of packing, labeling,
documentation, and insurance requirements. Because the goods are being shipped by unknown
carriers to distant customers, the new exporter must be sure to follow all shipping requirements
to help ensure that the merchandise is
packed correctly so that it arrives in good condition;
labeled correctly to ensure that the goods are handled properly and arrive on time and at the
right place;
documented correctly to meet local and foreign government requirements as well as proper
collection standards; and
insured against damage, loss, and pilferage and, in some cases, delay.
Because of the variety of considerations involved in the physical export process, most exporters,
both new and experienced, rely on an international freight forwarder to perform these services.
86 | P a g e
Membership
WTO
Sri Lanka has been a WTO member since 1 January 1995 and a member of GATT since 29 July
1948.
UNSC
Sri Lanka (formerly Ceylon) * non-permanent member of the Security Council during the
1960 1961
*Ceylon joined the United Nations on 14 December 1955. On 29 August 1972, its name was
changed to Sri Lanka.
UNCTAD
Sri Lanka is the member of United Nations Conference on Trade and Development
Trade Block
SAARC (South Asian Association for Regional Cooperation)
World Bank Intervention in the country

Welfare Sector: The National Development Trust Fund
In 1991 the World Bank moved to streamline the Sri Lankan welfare sector by funding a poverty
alleviation project which promoted the role of non-government organization (NGOs) and
decentralized government agencies and replaced traditional consumption-oriented transfers with
an emphasis on household self-reliance through productive activity. The project's design was
based on a model which depends for its success on key conditionsguaranteed political
independence and a well-developed NGO sectorwhich did not exist in Sri Lanka in the early
1990s. Additional problems included management deficiencies and failure to provide key
supports for production-related poverty reduction.
87 | P a g e
Multinational companies in Sri Lanka

RANK
ORGANISATION
INDUSTRY
Google
Information Technology
SAS Institute
NetApp
Information Technology | Storage/Data Management
W. L. Gore & Associates
Manufacturing & Production | Textiles and textile products
Belcorp
Retail
Microsoft
Information Technology | Software
Marriott
Hospitality | Hotel/Resort
Monsanto
Manufacturing & Production | Chemicals
Cisco
10
American Express
Financial Services & Insurance | Banking/Credit Services
11
Scotiabank
Financial Services & Insurance | Banking/Credit Services
12
SC Johnson
Manufacturing & Production | Personal and Household goods
13
Autodesk
14
Telefnica
Telecommunications
15
National Instruments
Manufacturing & Production
16
Fedex Corporation
Transportation
17
EMC
Information Technology | Storage/Data Management
18
Daimler Financial Services
Financial Services & Insurance
19
Diageo
Manufacturing & Production | Food products
20
Hyatt
Hospitality
21
Mars
Manufacturing & Production
22
Accor
Hospitality | Hotel/Resort
23
eBay
24
The Coca-Cola Company
Manufacturing & Production | Food products
88 | P a g e
Trading Relations with India:

Indo-Lanka Relations
India is Sri Lankas largest trading partner globally, while Sri Lanka is Indias second largest
trading partner in the SAARC. It is the number one source of supplies accounting for twenty
percent of Sri Lankas total imports and third largest export destination for Sri Lankan products
absorbing six percent of total exports. Among tourists, Indian visitors make the largest single
group having a share of twenty seven percent of total arrivals. In the investment field, India is
among the top five foreign investors in Sri Lanka. Trade between Sri Lanka and India has grown
rapidly after the entry into force of the Indo-Sri Lanka Free Trade Agreement in March 2000.
The value of bilateral trade increased fromUS$658 million in 2000 to US$ 3.6 billion in 2013.
Sri Lankas exports growth has largely been under the ISFTA, whereas Indias exports have
remained mostly outside the ISFTA. In average, over 70% of Sri Lankas exports to India
continue to be under the ISFTA, while Indias exports to Sri Lanka under the ISFTA remains
only around 25%. Sri Lanka could export more than 4000 product lines to the Indian market on
duty free basis. The noteworthy aspect of the growth of exports under the agreement is the
broader product diversification, which took place following the FTA.
Major exports from Sri Lanka under the ISFTA includes; apparel, furniture, MDF boards, glass
bottles, processed meat products, poultry feed, insulated wires & cables, bottle coolers,
pneumatic tires, tiles & ceramics products, rubber gloves, electrical panel boards & enclosures,
machinery parts, food preparations and spices etc.
89 | P a g e
Table 1: Trade between India and Sri Lanka : 2000 2013 (Values in US $ Millions)
Year
Exports
Imports
Total Trade
Balance of Trade
2000
55.65
600.12
655.77
-544.47
2001
70.12
601.50
671.62
-531.38
2002
168.86
834.70
1,003.56
-665.84
2003
241.14
1,076.17
1,317.31
-835.03
2004
385.50
1,358.01
1,743.51
-972.51
2005
559.26
1,440.41
1,999.67
-881.15
2006
494.06
1,822.07
2,316.13
-1,328.01
2007
516.40
2,785.04
3,301.44
-2,268.64
2008
418.08
3,006.93
3,425.01
-2,588.85
2009
324.87
1,709.93
2,034.8
-1,385.06
2010
466.60
2,546.23
3,012.83
-2,079.63
2011
521.65
4,338.04
4,859.69
-3,816.39
2012
566.37
3,517.23
4,083.60
-3,517.23
2013
543.37
3,092.67
3,636.04
-2,549.30
90 | P a g e
Major Exports to India in 2013
Product
Value in US$ Mn
Spices
89.11
Natural Rubber & Rubber products
22.07
Poultry Feed
38.38
Insulated wires, cables etc
33.87
Copper & Copper based products
7.54
Refrigerators, freezers and other refrigerating equipment &

Machinery
6.65
Paper & Paper products
24.42
Ships, Boats and floating structures
51.83
Fiber board of wood
9.91
Furniture, bedding, mattress etc
15.92
Apparel
34.26
Source: Sri Lanka Customs
91 | P a g e
Major Imports from India in 2013
Product
Value in US$ Mn
Motor Vehicles
383.03
Mineral fuels & oils
403.02
Cotton
191.96
Pharmaceutical products
164.54
Knitted and crocheted fabric
93.87
Plastic articles
84.36
Iron & Steel
209.29
Chemicals
55.83
Cement
181.40
Sugar
77.74
92 | P a g e
India and Sri Lanka also share the membership in other regional and multilateral trading
arrangements namely; Asia Pacific Trade Agreement (APTA), South Asia Free Trade Agreement
(SAFTA) in the SAARC context, BIMSTEC (Bay of Bengal Initiative for Multicultural
Technical and Economic Cooperation), Global System of Trade Preferences (GSTP) and the
World Trade Origination (WTO) which were influential in strengthening and further advancing
trade and economic ties. To our mutual benefit India is one of the leading investors in Sri Lanka
with the presence of major Indian companies including:
CEAT Limited
Gujarat Glass Limited
Indian Oil Corporation Limited
Neelkamal Plastics Limited
Gujarat Ambuja Limited
Bharti Airtel Limited
National Thermal Power Corporation
Indian Hotels Co. Limited
State Bank of India
Indian Bank
ICICI bank
Larsen & Toubro Limited
Carin India Limited
Mphasis
Indian Overseas Bank
93 | P a g e
With the entry into force of the Indo- Sri Lanka Free Trade Agreement, the foreign direct
investment flow has taken place both-ways. The Sri Lankan investors in India include;
Aitken Spence Hotel Managements
Bank of Ceylon
Brandix India Apparel City
Damro Furniture (Pvt) Ltd
DSI Tyre India (Pvt) Ltd
Hatton National bank
hSenid Software (India) Pvt. Ltd
John Keells Logistics India Pvt Ltd
Multilac
Ritzbury India Pvt Ltd
Regency International Clothing P Ltd
Sri Lankan Airlines Ltd
Serene Holidays Pvt Ltd (John Keells Group Company)
94 | P a g e
Location of Consulate General of Sri Lanka

1) 34, Homi Modi Street
Mumbai - 400 001
India
2) High Commission of Sri Lanka
No : 27, Kautilya Marg,
Chanakyapuri,
New Delhi 110021,
India.
3) Royal Orchid, No.371, 2nd Floor
13th Cross, 8th Main, Upper Palace Orchards
Sadashivanagar
Bangalore 560080
India
Sri Lankan Embassy in India

1) 27, Kautilya Marg Chanakyapuri
110 021
New Delhi
India
2) 56, Sterling Road, Nungambakkam
600 034
Chennai
India
95 | P a g e
Location of Indian Consulate in Sri Lanka

1) Consulate General of India
14, Maruthady Lane, Nallur, Jaffna
Indian Embassy in Sri Lanka

1) High Commission of India, Colombo
36-38, Galle Road, Colombo 03
2) High Commission of India, Kandy
31 Rajapihilila Mawatha,
P.O Box No 47,
Kandy 20000
96 | P a g e
Bibliography
www.Ieconomies.com
www.tradingeconomies.com
www.worldbank.com
www.cdda.gov.lk
www.sec.gov.lk
www.hrsrilanka.lk
www.sciencedirect.com
en.wikipedia.org
www.saarc-sec.org
countrystudies.us
97 | P a g e

International Business - Sri Lanka - Country Assignment

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

International Business - Sri Lanka - Country Assignment

Caricato da

Copyright:

Formati disponibili

Country Assignment

Introduction Overview of Sri Lanka

Key Rankings Indexes

Cultural Environment of Sri Lanka

Political Environment of Sri Lanka

Legal Environment of Sri Lanka

Economic Environment of Sri Lanka

Free Trade Agreement

Other Aspects of Environment

Multinational companies in Sri Lanka

Trading Relations with India

Overview of Sri Lanka

3) Ease of Ranking doing business

Lower middle income

GNI PER CAPITA (US$)

DOING BUSINESS 2014

DOING BUSINESS 2015 DTF**

DOING BUSINESS 2014 DTF**

Dealing with Construction Permits

Protecting Minority Investors

Trading Across Borders

=Doing Business reform making it easier to do business.

=Change making it more difficult to do business

Comparison with some economies

4) Freedom house index

Freedom in the World 2014 & 2015

Freedom on the Net 2014

Freedom of the Press 2015

New York City

Source: Mercers 2015 Cost of Living Survey

Legal and Political

Legal and Political Environmental

Physical Property Rights

Protection of Physical Property 6.2

Intellectual Property Rights

Protection of Individual Property Rights 5.4

7) Index of economic freedom, Overall Score (score (100 represents

Comparison with India

PEST ANALYSIS OF SRI LANKA

Cultural environment of Sri Lanka

10 383 447 Current male population (49.3%)

998 live births average per day (41.57 in a hour)

339 deaths average per day (14.13 in a hour)

-124 emigrants average per day (-5.15 in a hour)

- percentage of population under 15 years old

Culture, Hofstedes Cultural Dimensions

Long Term Orientation

Sri Lankan Cuisine

Foods in Sri Lanka can be hot or very

Rice and Curry in Sri Lanka

Sour fish curry (Malu Ambul thiyal)

Potato Curry (Ala Hodi)

Dos & Donts

5) Walk around the Galle Fort.

1) Dont encourage beggars.

2) Dont encourage touts.

3) Dont walk about Pettah in the night.

Political Environment of the Country

since 9 January 2015

since 9 January 2015

Political System of Sri Lanka

Appoints the prime minister with the approval of the parliament

Major Political parties