Golden opportunity for tourism industry

Dr. Mathu H. Liyanage

The decision of the Sri Lanka Tourism Development Authority (SLTDA) to offer Kalpitiya (Puttalam), Kuchchaveli (Eastern Coast), Passikuda (Batticaloa), Dedduwa Lake and land near the Yala National Park for development with the approval of the government is indeed a golden opportunity for the tourism industry to thrive.

Marco Polo, the Venetian merchant, traveller and writer (1254-1324) in his account of travels has referred to Sri Lanka as the finest island in the world. Sri Lanka has been a most sought-after tourist destination for European travellers for centuries, and for traders a haven replete with spices including cinnamon, gems and handicrafts.

Foreign exchange

Since gaining independence from the British in 1948, the foreign exchange earnings of Sri Lanka were from the major three primary products of tea, rubber and coconut which accounted for 30 percent of Gross Domestic Product (GDP) and 90 percent of the country’s total foreign exchange earnings.

Eventually, tea produced by British companies and renowned as the world’s best, became the sole major foreign exchange earner.

India and, subsequently the African countries that gained independence later, entered the scene in a big way with modern factories and machinery, and improved techniques of production.

Not only the African countries became our keen competitors but over-production of tea also depressed the prices, resulting in Sri Lanka losing the place of tea as its sole foreign exchange earner. Export of ready-made garments to European countries and the USA, and export of people by way of skilled and unskilled workers for employment in the Gulf States such as Saudi Arabia, Qatar, Dubai, Oman, Lebanon, Syria and South Korea, gave a swift twist to the situation, changing the grey gloom into a rosy boom.

There is now a home-grown competition between the two for supremacy but, as profits of the garment trade have been considerably reduced as a result of the European Union withdrawing GSP+ concessions, the increasing earnings of migrant workers is likely to upset the balance and take the lead.

It is worthwhile remembering, in this context, the 19th century’s greatest British poet Alfred Lord Tennyson who said in his poem after the death of King Arthur 'The old order changeth yielding place to new'.

The truth in this saying is still correct and valid to this situation though not in politics but even in commerce and trade.

Migrant workers

It is estimated that 1.7 million Sri Lankans work overseas at present.

In 2010, they remitted US $ 4.1 billion which increased to US $ 5.2 billion in 2011, the highest on record, according to the Ministry of Foreign Employment Promotion and Welfare.

It is encouraging that President Mahinda Rajapaksa has offered incentives in the 2012 Budget to those returning migrant workers such as exemption of all taxes on income for five years to enable them to invest their earnings in new business ventures, and waiving customs duties on all machinery and equipment required for such enterprises.

The setting up of a credit assurance scheme to enable them to obtain easy credit at low interest is yet another encouragement to them.

Tourism takes a significant place in the policies enumerated in Mahinda Chinthana with the prospect of achieving 2.0 million tourist arrivals by 2016; make tourism the third largest foreign exchange earner; and transform tourism to become the fastest job creator and help reduce the unemployment levels.

Attaining these objectives may be possible as, at present, the global tourism industry represents 11 percent of the world’s GDP, eight percent of global employment and nine percent of global wages; the tourism industry being the largest single employment generator of the world economy today.

The programme of development of projects initiated by SLTDA is timely and, with the global background that is conducive to the growth of the tourism industry, Sri Lanka’s tourism industry is bound to thrive and catch up with the other two highest foreign exchange earners (earnings from migrant workers and earnings from the garment-trade) sooner than expected.