Since the civil war ended in 2009, Sri Lanka has emerged as one of Asia’s fastest growing economies

By John Enos

Since Sri Lanka’s 26-year civil war against the Tamil Tigers came to an end in 2009, the South Asian nation of 20 million has experienced impressive growth due to a rise in tourism and its strategic position along one of the busiest international shipping lanes in the world. The US $64 billion economy is propelled by tourism, remittances, tea, textiles, and agriculture. Sri Lanka’s GDP, which grew at 8% in 2010 and 8.3% in 2011, slowed down to 6.5% in 2012 due to the country’s balance of payments predicament and the sluggish performance of the global economy. However, 7.5% growth is projected in 2013 and last year’s contraction will be ameliorated as tourist arrivals surge, large-scale infrastructure and port projects near completion, and Western demand for Sri Lanka’s exports strengthens. Matching the country’s solid GDP growth are its improvements in corporate governance. Sri Lanka was ranked as the second most improved country in the world in ease of doing business in the World Bank’s Doing Business 2013 report, the first time in seven years that a South Asian economy gained such an accolade.

This article is an excerpt from Leopard Asia Frontier Fund’s upcoming January 2013 newsletter. You can subscribe to the newsletter here. More…