Business Market in Sri Lanka

Economic Growth Sri Lanka has experienced huge economic growth since its independence in 1948. In 1977 the government introduced a new program called the Liberalization Act designed to boost the manufacturing industry. Until around the 1980’s the main source of income for Sri Lanka came from its agriculture sector. When the Liberalization Act was passed it attracted many new foreign investors and promoted the export of manufactured goods. Sri Lanka’s manufacturing industry rose from 12% in 1977 to 16% by the mid 80’s. The total labor force in Sri Lanka has increased from 5.8 million in 1991 to 8.3 million in 2001.

What is the Liberalization Act? The Liberalization Act was designed to set up free trade zones and they gave huge tax cuts to foreign companies. In today’s market, Garments, textiles, and electronics dominate manufacturing industry. Around 70% of these workers are women.

Agricultural Exports Tea, rubber and coconut are the three chief exports in commercial crops. As you can see since 1977 the agriculture industry has dropped significantly. From Jan-Sep 2003 they made 697.9(in millions) Us dollars from agriculture and 2941.6 from industrial.

Industrial Exports Textiles and apparel account for half of the industrial exports(1897.4 US dollars in millions). The second largest comes from the leather and rubber sector(290.6 US dollars in millions).

Foreign Trade In 2001 the United States was the largest purchaser of Sri Lanka’s exports; accounting for 64 percent of the total value. Manufactured goods made up 75% of Sri Lanka’s total exports. In 1977 before the Liberalization Act it accounted for only 14%.