There are few island nations that have had better preconditions for economic and social development than Sri Lanka.
The country has a high literacy rate and free healthcare. But none has suffered as long as Sri Lanka from such a devastating civil war. The result, nightmare years with no tourists and few investors. But now, that’s all changed.
Ric Wasserman has the story from Sri Lanka.
Sri Lanka’s beaches are known for their beauty, but since the mid 1980’s few tourists had seen them.
A war raged between government troops and the Tamil Tigers. The country slowly imploded, socially and economically.
The few who dared to invest believed that one day the country would again rise. Then in May 2009 the Tamil Tigers were defeated, and Sri Lanka began its climb back.
Swedish clothing manufacturer Jan Höjman saw Sri Lanka’s potential. He built a factory in early 90’s while the war raged.
“We started in 2004 in spite of the war and all that meant,” he says, “Of course it felt very unsafe but at the same time we saw a country where contact with the officials went smoothly, especially in terms of legal aspects and logistics.”
Jan Höjman was convinced. He knew that the country had both excellent tailors and a long tradition of clothing production. And then, the war ended.
“Since then, the country has changed dramatically in many, many areas. Especially regarding the infrastructure, the roads,” he adds.
Manager Nalin Pathirana is guiding us around a factory, built in 2006 in Alawwa in north central Sri Lanka.
Rows of men and women are busy stitching and cutting fabric, sewing on buttons, ironing collars. Production here is radically different from mass manufacturers – the 500 workers follow up internet orders, sewing each garment individually after body size and style preference.
Dammika is a seamstress and has been working here since the factory opened. There’s such a difference since the war ended, she says, breaking into a wide smile.
We can travel anywhere we like because it’s safe now. We’re no longer afraid. The factory has programs with music, dance and a child daycare center.
These extra perks like day care are becoming more frequent in the quest to attract skilled local tailors into larger production facilities.
But the textile sector, though booming, has been hit by one dark cloud: The EU dropped Sri Lanka from its list of countries with duty free import. And that cuts into profits and limits investors.
Sri Lanka lost its favorable EU status because the government refuses to allow a UN investigation into how an estimated 70,000 Tamils were killed in the last battle of the war. A UK TV channel has produced a documentary showing Sri Lankan troops shooting Tamil Tiger prisoners of war.
But the EU issue doesn’t bother Nalin Pathirana – orders are streaming in and a new factory will go up.
“That is the plan,” he says, “It will take around three years time to finish all the factory premises. Then we’ll have the capacity to employ 1200 plus another 500 here.”
It’s not only the textile sector that’s expanding. Sri Lanka’s biggest contributor to the economy is now tourism with a 40% jump in the last three years.
But most hotels are small operations. The country is in deep debt to China which has built the new roads, harbors and airports. To repay the loans bigger investors are needed.
A traditional ceremony greets the guests at Sri Lanka’s first luxury hotel, which opened this past December. The hope is that tax revenue from five star hotels like this one will help reduce government debt.
Hotel manager Tamir Kobrim says Sri Lanka’s time has come.
“I think that the past is the past and the owners saw the opportunity now and we are investing just about 100 million dollars in two resorts in the country,” says Kobrim, “It’s a huge investment – a huge commitment for the company and the owners, and I think that they believe in the country, they believe in the future. They believe that Sri Lanka is a new destination.”
Sri Lankans are optimistic – with a literacy rate of 93%, free health care and well -developed infrastructure, things are looking up.
A major challenge is to insure an equal share of the development revenue is put into the north and east. That’s crucial –if not, the country risks Tamil protests, which might quickly scare away both investors and tourists.