ECONOMIC TRENDS FOR SME DEVELOPMENT IN

SRI LANKA

Socio - Economic Indicators

Sri Lanka at a glance

Multiracial Country – Total population 20.01 million (2007)

Area – 65,610 sq km (Water 870 sq km

Coastline – 1340 km

Natural Resources – Limestone, graphite, mineral sands and gems , phosphates, clay , hydropower

Poor house holds – 15.2%

Human Development Index – 0.74 (2005)(The placed 99 among 177 countries)

Contd:-

Life expectancy - Male 71.7 years Female 77 years

Total fertility rate - 1.85 children born/woman

People living with HIV/AIDS – 3500

Ethnic groups - Sinhalese 73.8% , Sri Lankan Moors 7.2%, Indian Tamils 4.6%, Sri Lankan Tamil 3.9%, Others 10.5

Literacy rate -92.5% ( Definition ; age 15 and over can read and write)

People

Age structure - 0 - 14 Years 24.4% 15 - 64 Years 68.4%

65 years & over 7.2%

Population growth rate - 1.1% (2007 est.)

Net migration rate - 1.27 migrants/1000 population (2005 est.)

Sex ratio - Total population - .96 male/female ( 2005 est.)

Economy GDP per capita - US $ 1617 (2007)

GDP composition by sector

Agriculture - 12.3%

Industry - 28.2%

Services - 59.5%

Labour force – 7.48 million (2007)

Country 1950 (US $) 2004 (US $)

Sri Lanka 89 1012 (12 times)

Japan 90 32000 (355 times)

Singapore 30 28000 (933 times)

Maldives 30 3120 (144 times)

Contd;

Unemployment rate – 6.5% (2006)

Population below poverty line – 5.6%

Gini index (Income distribution) – 0.46

(Zero is perfect)

Inflation rate – 14%

Investment – 27% of GDP

Industries – rubber processing, tea, coconuts and other agricultural commodities, clothing , cement, petroleum refining, textiles, tobacco

Exports partners – US 32.4% , UK 13.5% , India 6.8%, Germany 4.8% ( 2005 est.)

Definitions of SMEs

Total Assets Valve excluding land & building less Rs.1 M --Micro Industries

Total Assets excluding land and building ranging between Rs. 1-20 M. --Small Industries

Total Assets excluding land & building ranging between Rs.20-50 M. --Medium Industries

Source – Ministry of Industry & Investment Promotion (White Paper December 2003) (Draft Paper)

•Significant of SMEs

- More Labour intensive - Supply of Cheap Goods & Services - Less Value Addition - Sub Contracting Facilities - Generating an employment opportunities - Requiring Minimum Investment