Sri Lanka

D

Mining

Sri Lanka possesses a variety of economically useful minerals such as gemstones, graphite, ilmenite (a mineral sand), industrial clays, limestone, monazite, salt, titanium, and zircon. Local industries producing ceramics, cement, bricks, glass, and salt are based on extracted minerals. Sri Lanka is a leading exporter of gemstones.  

E

Manufacturing

In the 1960s and 1970s the government of Sri Lanka pursued an economic policy in accordance with a model called import substitution industrialization. Under this model, the government bought controlling interests in many manufacturing industries. Policies such as import controls favored domestic products.

In 1977 the government embarked on an economic liberalization program to draw foreign investment in export-oriented industries. The program encouraged the private sector to play a dominant role. Free-trade zones, also known as investment promotion zones, were set up to give generous tax concessions to foreign companies. Garments, textiles, and electronics dominate manufacturing in the free-trade zones. About 70 percent of the factory employees are women.

In 1990 the government launched an ambitious privatization program to transfer state-owned industries to the private sector. Privately owned industries now manufacture such products as steel, fertilizers, rubber, and cement.

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F

Tourism

Sri Lanka’s tropical climate, scenic beaches, and historical sites are prime tourist attractions. By the 1970s, sizeable investments were devoted to the building of infrastructure for the tourism industry, including hotels and resorts. Tourism declined after 1983 as a result of the civil war and related security concerns. About 549,308 tourists, mostly from Europe and India, visited Sri Lanka in 2005.

G

Energy

An estimated 47 percent of energy requirements of Sri Lanka are met by noncommercial biomass energy sources. These sources include crop residues such as coconut shells, coconut leaves, and paddy husks. Petroleum provides about 30 percent of the country’s total energy needs, and hydroelectricity provides about 23 percent. Since the early 1980s, the construction of dams on the Mahaweli has made a significant contribution to the hydroelectric power capacity. The dams generate about one-half of the country’s total output of hydroelectric power. Sri Lanka has experienced periodic power shortages since 1994. The immediate cause of the energy crisis was low reservoir levels due to the failure of monsoons to bring adequate rainfall.

H

Transportation

Road transportation accounts for about 93 percent of the land transportation in Sri Lanka. The country has about 97,286 km (60,451 mi) of roads. The road density is highest in the southwest, especially in the area around Colombo. Buses are the principal mode of public transportation.

Sri Lanka Railways operates the country’s railroad network, which includes about 1,450 km (about 900 mi) of track. Colombo is the node of the network, and train routes connect the main cities of all nine provinces in the country. The railroads were developed during the British colonial period, with the first line from Colombo to Kandy opening in 1867.

Sri Lanka has three deep-water ports, at Colombo, Galle, and Trincomalee. Colombo handles the highest volume of cargo, followed by Galle.

Sri Lankan Airlines is the national airline. Founded in 1979 as Air Lanka, the airline changed its name when it came under partial foreign ownership in 1998. Bandaranaike International Airport, the country’s only international airport, is located in Katunayaka 35 km (22 mi) north of Colombo.

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