Sri Lanka’s economy has boasted roughly 6% growth since the end of its civil war in 2009, and is starting to get increased levels of foreign investment. After a recent investor forum in New York, co-hosted by the Colombo Stock Exchange, senior representatives of several American firms endorsed Sri Lanka as a good place to invest.
Governor of the Central Bank Ajith Nivard Cabrall has large goals for the country. He says Sri Lanka’s economy will expand 7.8% this year, and he is targeting a GDP of $150 billion by 2020 - a goal he says Sri Lanka is set to achieve if it maintains 8% growth each year. This would require 5% of investment to come from overseas. In 2012, US foreign direct investment to Sri Lanka was $102 million, an 8.5% increase from 2011.
Sri Lanka has learned from other emerging markets in their region. It saw China develop assembly plants, and India sprout customer support centers. Seeing that these countries grew by specializing and thus developing the capacity to provide cheaper service than developed countries, Sri Lanka has also begun to focus. The country today is building a reputation for its accountants. President Mahinda Rajapaksa predicts knowledge-based outsourcing, primarily accounting, to triple to $1 billion in revenue by 2015.
Congressmen Chris Van Hollen (D-MD) is co-chair of the Sri Lanka Caucus, and is in favor of US companies investing in Sri Lanka. Congressman Van Hollen told Asia Matters for America, “Sri Lanka is on the brink of achieving record economic growth in the years ahead, and that growth provides fresh opportunities for foreign investment, including from American companies. Like other nations investing in Sri Lanka’s future, the US will want to ensure that Sri Lanka plans to share the benefits of its economic success with all its citizens as reconciliation efforts continue.”
Ethan Kannel is a Research Intern at the East-West Center in Washington and a junior at Cornell University