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Sri Lanka: Asia's up-and-coming economic hub

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Photo captions: For an Asian metropolis, Colombo has a unique ambience.   © Reuters

TOKYO -- If you're over 40, you probably have a different image of Sri Lanka than those younger than you.

     For the older set, the country that used to be known as Ceylon might conjure images of tea plantations, jewelry and beautiful beaches. Younger people, however, only know it as an island of civil war, for headlines of Tamil rebels fighting for an autonomously governed state, for decades of carnage.

Drastic changes

Sri Lanka has been transforming since the civil war ended in 2009. Those beautiful beaches, which have given old Ceylon the nickname "Pearl of the Indian Ocean," are once again beckoning tourists. And the country has designs on becoming the hub of an economic wheel that rolls along the rim of the Indian Ocean.

     Sri Lanka seems well-located to play that role.

     Colombo, a coastal city in Western Province, is the country's center of commerce; its capital, the nearby city of Sri Jayawardenepura Kotte, is said to have the longest name of any nation's capital.

     Colombo remains calm and clean. Its cityscape is a mixture of colonial buildings constructed during British rule and modern high-rises. It contrasts to the chaotic and bustling New Delhi; Dacca, Bangladesh; and other South Asian burgs.

     One reason for its relative tranquility is Buddhism. When Ceylon gained its independence from Britain, in 1948, Hindus began migrating to India, while Muslims made their way to Pakistan and present-day Bangladesh, then known as East Pakistan. 

     Sri Lanka's economy has grown impressively since the civil war ended. Growth in recent years has been 6-8%. Per capita gross domestic product is now above $3,000, double that of India. Expressways, airports and other pieces of infrastructure are being laid, and luxury resort hotels and condominiums are plopping down.

Factories too

Sri Lankan industry is growing, although foreign manufacturers are not building plants in the country as fast and furiously as they are in places like Bangladesh.

     Noritake has a big plant near the central city of Kandy. There, Noritake produces earthenware comparable in quality to the products it makes in Japan. The goods are shipped around the world.

     Noritake decided to move into Sri Lanka due to the availability of high-quality clay. Now Sri Lankan workers with advanced skills help to maintain Noritake's brand.

     The berths at Colombo Dockyard, adjacent to the port of Colombo, are fully occupied with passenger boats and support ships for offshore oilfields being built.

     The dockyard belongs to the Onomichi Dockyard group, which is shifting its shipbuilding operations out of Japan to reduce costs. Colombo Dockyard has become a major source of earnings for the Japanese group; they are on par with the Onomichi Dockyard's Japan earnings, thanks to India's increasing demand for new ships.

     The group says its Colombo-built ships are of the same quality as those made in Japan. 

Best location

The Indian Ocean economic grouping covers the member nations of two other blocs, the South Asian Association for Regional Cooperation (Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka) and the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam). It also includes some Middle Eastern nations on the rim of the Indian Ocean (Iran, Iraq, Saudi Arabia and Oman) and East African countries Kenya and Tanzania.

     The countries, with a combined population of 2.6 billion, are not bound by treaty. The loosely knit grouping has the population and market size of South Asia, the manufacturing capacity of Asean and the natural resources of the Middle East.

     In addition, massive natural gas fields were recently discovered off East Africa, and the exploration of them is about to get under way. A project to export 10 million tons of liquefied natural gas from Mozambique is also making headway.

     Given these and other developments, the Indian Ocean economic zone is bound to emerge as influential.

     Sri Lanka finds itself geographically right in the middle. It also offers convenient maritime and air access to partner nations. And  in terms of weather, environment, hygiene and security, it just might be the best place of residence for businesspeople and others assigned to South Asia.

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