A small island country in South Asia, Sri Lanka has made great strides to grow its economy. They gained their independence from British colonization in 1928. Leading to a turbulent history. In fact, the country was at war until 2009. Now, Sri Lanka has finally entered a period of peace. And this was reflected in their economic growth. In fact, Sri Lanka has been labeled as one of the fastest-growing economies in South Asia. In addition, Sri Lanka is also part of several economic unions. This further improves their growth rate. Some key facts and figures about Sri Lankan’s economy are:
- The value of Sri Lanka’s GDP stands at $ 88.223 billion, which in turn ranks 63rd in a census of 180 countries.
- Sri Lanka’s GDP per capita reached USD 4,067, which ranks 112th in a census of 180 countries.
- In terms of human development index, Sri Lanka is 0.770. This shows that the standard of living in Sri Lanka is high.
- The unemployment rate in Sri Lanka was constant at 4.4%. Which is a relatively low value for its population.
- Sri Lanka’s annual GDP growth rate is 3.1%
- Sri Lanka has an ease of doing business rank of 100, which makes it easy to do business models.
As it can be deduced, Sri Lanka can be placed as an intermediate level in terms of its economy. Although much has been improved, there is still room to do better. As such, the Sri Lankan government has taken several initiatives to stimulate business registrations in Sri Lanka. It comes in the form of several grants for small businesses and small business owners.
But how do small businesses contribute to Sri Lanka’s economic growth? According to the website for the National Policy on Human Rights and Employment in Sri Lanka, small and medium-sized enterprises account for 80% of the country’s businesses. But what does this mean for the economy? This means that small businesses in Sri Lanka have created their own ecosystem. If they set up local businesses, they create new employment opportunities, directly contributing to GDP.
Moreover, they help to stop gender disparity by employing more workers than any other sector. In addition, one-third of small businesses are owned and run by women. In addition, they contribute to 45% of all jobs in Sri Lanka. Which, given the 95.6 percent of total employment, is significant. This largely helps poverty, as the percentage of the population below the poverty line is now 6.1%. In turn, this helps reduce crime rates in the country. As such, the current crime rate in Sri Lanka is 40.10, which is a declining number.
The business registration system in Sri Lanka is also relatively simple. It is largely the same for both local and foreign people. Moreover, registration is done online. In addition, business registration costs also remain low. Thus, ensuring the access of all new entrepreneurs to register. This is regardless of their financial status.
How small businesses contribute to economic growth has been a hot topic in the last decade. According to the Chamber of Commerce, it contributes to 53% of the country’s GDP. The other contributor to the economy is the tourism industry.
However, despite this industry that keeps the economy up, there are several areas for improvement. The main one being the high tariffs imposed on the exporting companies. Another problem is the unordered method of information exchange. This leads to interruptions in the flow of business. These information disruptions are caused by language barriers. Although Sri Lanka has three official languages, English is the main language used for trade. Unfortunately, many locals do not speak English fluently, which leads to the above.
However, the Sri Lankan government is now actively working to combat these issues. Negotiating for free trade, it is trying to reduce tariffs for exporters. Moreover, English education is now becoming more accessible to the general public. This is because more schools are now integrating it into their lessons. Thus, it is only a matter of time before the economy can overcome these problems. Therefore, if you are an entrepreneur who wants to register your business in Sri Lanka, you will be glad to know that the process is simple. As mentioned above, the Sri Lankan government is actively encouraging new business startups. Because new business startups are a certain method to maintain the country’s economic progress.