For years, Sri Lanka has looked West for a big part of its revenues. Exports of garments to Europe and North America have been, and will continue to be, essential to its economy, as will Western tourists and remittances from Sri Lankan workers in the Middle East, Europe and North America.\u00a0 However, the Covid-19 pandemic has hit all of these revenue streams hard, and the nation\u2019s economy contracted sharply in 2020.\u00a0 A further effect that Covid-19 has had on Sri Lanka, has been to add impetus to changes that were already taking place \u2013 not least a realisation that she cannot rely so much on the Western fashion industry, and that other important opportunities exist - to the East\u2026<\/p>\n\n\n\n
FACING IN TWO DIRECTIONS<\/strong><\/p>\n\n\n\n Sri Lanka\u2019s exports account for 23% of GDP, a full quarter of these being bound for the USA, with the UK following (at 9%), then India, Germany and Italy a few points lower.\u00a0 By contrast, most of her imports (and inward investment) come from Asia \u2013 India, China, the UAE and Singapore.<\/p>\n\n\n\n Located on a major shipping route, and so close to India, Sri Lanka\u2019s geographic position gives it an even greater strategic value than its size and population count might suggest.\u00a0 For these reasons, she has been on the receiving end of attention (and investment) from both India and China, especially as China builds its network of worldwide port infrastructure, including the Hambantota deep water port, under the banner of the \u201cMaritime Silk Road\u201d (or whichever of the many related epithets you choose).<\/p>\n\n\n\n FOOD AND SERVICES<\/strong><\/p>\n\n\n\n Looking east, there are growing markets for Sri Lanka\u2019s goods and services.\u00a0 Take Singapore, for instance.\u00a0 Access to food resources is one reason why some Singaporean companies are putting down roots in Sri Lanka \u2013 Singapore needs to secure food supply chains from outside its own borders. But more than that, Sri Lanka offers high-cost Singapore opportunities to outsource services efficiently, without becoming overly dependent on her big neighbours - Malaysia and Indonesia.\u00a0<\/p>\n\n\n\n