Sri Lanka Country Risk Report - Business Monitor International - Industry Reports

Sri Lanka Country Risk Report

Sri Lanka Country Risk Report - Business Monitor International - Industry Reports
Sri Lanka Country Risk Report
Published May 26, 2015
43 pages — Published May 26, 2015
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over the Liberation Tigers of Tamil Eelam (LTTE) in May ---- ended decades of armed conflict between the Sinhalese major- ity and the Tamil minority in the eastern and northern parts of Sri Lanka. Although Sirisena has promised to work towards a reconciliation between various ethnic and religious groups, we believe that Sri Lanka is still far away from reaching a common identity. There is a continued sense of distrust in the former war zones, with significant military troops still deployed in those areas. Given that Sirisena has a similar political background as Rajapaksa, which relies on strong support from the Sinhalese community, it is highly unlikely that Sirisena will meet the de- mands of demilitarisation of the areas dominated by the Tamils and restore powers to Tamil leaders. Therefore, a potential flashpoint is the resettlement of Sinhalese previously driven out by the LTTE in the east and north. ...Sri Lanka is strategically important to China because it sits astride major sea lanes connecting East Asia with the Indian Ocean, the Middle East (and thereafter Europe via the Suez Canal), and Africa.

...The UPFA is the main coalition, led by the Sri Lanka Freedom Party (SLFP). Moreover, Sirisena is likely to fulfil his promise to abolish the executive presidential system with tremendous powers through garnering the two-thirds majority support in parliament required to amend the constitution. ...Suicide bombings and other attacks continue to deter foreign investment, and economic activity remains sluggish in Tamil- dominated areas owing to the heavy presence of security forces. Poor relations with Western capitals sees Sri Lanka lose market share in key export markets and become increasingly economi- cally dependent on China, which sees Sri Lanka primarily as a strategic ally and potentially as a source of energy imports (if oil exploration in the Mannar Basin proves successful). We emphasise that the above scenarios are not the only paths available, and that political change could incorporate elements of all three outcomes. ...

...While progress will be made towards the resolution of ethnic divisions in Sri Lanka, the path to reconciliation will be an arduous one. Moreo- ver, it is unlikely that demilitarisation in the northern and eastern part of the island will happen anytime soon, given the possibility of a resur- gence of the Tamil Tigers. Sri Lanka s ethnic reconciliation, between the Sinhalese majority and the Tamil minority, will be a very challenging task which requires strong political commitment and willpower from the government. Even though the ouster of the former autocratic administration in January has fostered optimism for a break- through in Sri Lanka s ethnic reconciliation, continued delays and inaction by the new government in providing tangible improvements to the Tamil communities living in the northern and eastern province of the country could create disdain towards the Sinhalese majority government and threaten the progress of reconciliation. In the worst-case scenario, it could even trigger a revival of the Tamil extremist group. ...

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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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Business Monitor International - Industry Reports. "Sri Lanka Country Risk Report" May 26, 2015. Alacra Store. Oct 27, 2016. <>
Business Monitor International - Industry Reports. (2015). Sri Lanka Country Risk Report May 26, 2015. New York, NY: Alacra Store. Retrieved Oct 27, 2016 from <>
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