Business Across Borders in Sri Lanka: Challenges and Opportunities

This presentation provides an overview of the challenges and opportunities of doing business in Sri Lanka. It covers the political, economic, social, and technological environment, trade policies, and resources for gaining competitive advantages. The presentation suggests recommendations for Sri Lanka to attract more foreign investors in the research and development and manufacturing sectors, and to have more strategic agreements with major economies.

Business across
borders
Country: Srilanka

Introduction
• Gaining in popularity of FDI in the recent time.
• More countries are competing against themselves
in attracting more investments.
• It is important for the organizations to effectively
determine the external environments.
• Identifying the challenges and opportunities.

Overview of the country
• Sri Lanka is located in the Southern part of India
and Indian sub continent.
• Effective facility of water transportation and sea
ports.
• High level of literacy rate of 92 percent.
• Positive diplomatic relationship with the neighboring
countries.

Political environment
• Establishment of democratic government.
• Challenges of government inefficiency.
• Labor regulations and tax rates are also major
challenges.
• Initiation of business friendly policies.

Economic environment
• Positive growth rate of GDP.
• However, growth rate is fluctuating in nature.
• Sri Lanka is ranked at 38 in terms to gross national
savings.
• Low ranking of Sri Lanka in terms of government budget
balance.

Social environment
• Smaller size of population of 20 million.
• Access to the educated and skilled employees.
• Ranking of 57 in terms of domestic market size.
• Ranking of 60 in terms of quality of education system.

Technological environment
• Increasing trend of investment in research and
development.
• Majority of the investments are coming from the public and
government sector.
• Ranking of 90 in terms of availability of latest technologies.

Resources for gaining
competitive advantages
• Access to diverse natural resources.
• Access to international sea routes.
• Strategic geographic location.
• Free trade agreements with other countries.

Influence of foreign
exchange and reserve
• Lower valuation of Sri Lankan currency.
• Trend of foreign reserves is fluctuating in nature.
• Is having both negative and positive implications.

Trade policies in Sri Lanka
• Liberalized policies and regulations.
• Initiation of special economic zones for providing
tax incentives.
• Average tariff rate in Sri Lanka is also lower
compared to some other country.
• Positive growth in inflow of foreign investments .

Recommendations
• Sri Lanka should have more strategic agreements with
the major economies especially with the western
countries.
• Sri Lanka should attract more for foreign investors in
the research and development sector in the country.
• Sri Lanka should attract investments in the
manufacturing sector in order to enhance their
domestic infrastructure.

Conclusion
• Sri Lanka is having free and trade policies.
• Strategic location of Sri Lanka is their another advantage.
• Option of catering to huge market in Indian subcontinent.
• Access to the international sea routes.

Reference
• Tradingeconomics.com. (2018). Tradingeconomics.com. [online] Available
at: https://tradingeconomics.com/turkey/terrorism-index [Accessed 19
Apr. 2018].
• Www3.weforum.org. (2018). Www3.weforum.org. [online] Available at:
http://www3.weforum.org/docs/GCR20172018/05FullReport/TheGlobalC
ompetitivenessReport2017%E2%80%932018.pdf [Accessed 19 Apr. 2018].
• Ips.lk. (2018). www.ips.lk. [online] Available at:
http://www.ips.lk/talkingeconomics/2011/10/13/dynamic-growth-in-sri-
lanka-the-innovation-imperative/ [Accessed 23 Apr. 2018].