Sri Lanka is situated strategically at the crossroads of major shipping routes to South Asia, the Far East and the continents of Europe and America, making the country a convenient port of call for shipping lines and airfreight services. Further, Sri Lanka’s proximity to the Indian sub-continent positions the country as a gateway to a market of 1.3 billion people. These factors have combined to generate keen interest in the country’s logistics sector, as well as from manufacturers looking for opportunities in the South Asian region.
Sri Lanka’s central location in the Indian Ocean, straddling trade routes from the East to the West, made it a popular trading hub in ancient times, where spices, gems and elephants were exchanged for fabrics, metals and other goods. Even today, over 200 vessels navigate along this path daily, as the government tries to reclaim Sri Lanka’s hub status in the Indian Ocean, amidst a shift in the center of economic gravity from the West to the East, as India and China show signs of re-emerging as major propellers of global economic growth.
Sri Lanka formerly known as Ceylon, and officially the Democratic Socialist Republic of Sri Lanka, is an island country in South Asia. It lies in the Indian Ocean, southwest of the Bay of Bengal, and southeast of the Arabian Sea; it is separated from the Indian subcontinent by the Gulf of Mannar and the Palk Strait. Sri Lanka shares a maritime border with India and the Maldives. Sri Jayawardenepura Kotte is its legislative capital, and Colombo is its largest city and financial centre.
Today, Sri Lanka is a multinational state, home to diverse cultures, languages, and ethnicities. The Sinhalese are the majority of the nation’s population. The Tamils, who are a large minority group, have also played an influential role in the island’s history. Other long established groups include the Moors, the Burghers, the Malays, the Chinese, and the indigenous Vedda. The island has had a long history of engagement with modern international groups: it is a founding member of the SAARC and a member of the United Nations, the Commonwealth of Nations, the G77, and the Non-Aligned Movement. Sri Lanka is the only South Asian country to have been rated high on the Human Development Index, and has the second highest per capita income in the region.
With the end of the three-decade long war Sri Lanka is seeing a sudden burst in infrastructure development and an of a new Sri Lanka rising. Today post-war Sri Lanka is seeing a rapid and wide spread infrastructure development within rural and urban areas as never seen in the country before. The island-wide road development program is at the center of this effort.
The improved connectivity enabled by road development, particularly rural roads, generates significant economic and social returns. It is having a transformative impact on the lives of people around the country. The completion of the highway network (commencing with the Southern Highway, Katunayake Expressway and Colombo Ring Road) will bring about significant cost-savings that will boost the competitiveness of the economy.
The rural electrification program has now extended power to 91% of the country’s households. It is bringing considerable benefits, particularly to poor and vulnerable households (not least through the improved environment for children’s studies). The completion of the much delayed Norochcholai coal power station has helped to avoid power cuts or recourse to hiring exceedingly expensive barges for thermal generation.
The rehabilitation of the railway network and rolling stock, combined with the road development, will increase mobility and help to contain transport costs which are an important determinant of an economy’s competitiveness.
Port and airport development is also creating the potential for Sri Lanka to become a key transport and tourist/transit hub for Asia. The completion of the Hambantota Port and the Colombo Southport Expansion will increase the capacity to take advantage of the country’s strategic location on the major international shipping lanes.