Sri Lanka tourism eyes Mideast investors

EMERALD ISLAND: Sri Lanka had 450,000 tourists last year, whereas its infrastructure is capable of catering for 700,000 visitors. (Getty Images)

Sri Lanka is in talks with Middle Eastern investors to develop resorts in the country, as it looks to boost tourism after war ends, a government official said on Thursday.

Sri Lanka says it is fighting the closing battles of a costly 25-year war against the Tamil Tigers rebels.

Faiszer Musthapha, deputy minister of tourism told Reuters that with "peace dawning ... there's a lot of interest in the investment side" with early-stage negotiations with investors for hotel resort developments taking place.

"We expect a growth of 30 percent this year in the number of tourists from the region (Middle East) ... which is least affected by the (global) crisis," Musthapha said on the sidelines of a travel event in Dubai,.

However a major increase in revenue from tourism, which contributes 2-3 percent to Sri Lanka's economy, is unlikely this year due to the global financial crisis, he said.

"It would not be prudent to expect a major increase in revenues or in numbers [of visitors] in these adverse global conditions," Musthapha said.

The crisis has hit Sri Lanka's export-dependent economy hard with the country's top sources of foreign exchange -- garments, remittances from workers abroad and tea - all suffering.

The country's central bank warned on Monday that this year's growth could fall to an eight-year low of 2.5-3.5 percent, and said it had a balance-of-payments deficit of $1.23bn last year.

Musthapha said he expects to clinch resort deals with Middle Eastern investors within the next six months, but declined to give further details.

Sri Lanka had 450,000 tourists last year, whereas its infrastructure is capable of catering for 700,000 visitors, Musthapha said, citing the war as a factor keeping people away. (Reuters)

Sri Lanka said on Wednesday it had invited U.N Secretary-General Ban Ki-Moon to visit camps where 200,000 people are being held after fleeing the closing battles of the island nation's war against Tamil Tiger separatists.

Tens of thousands of civilians are trapped in the less than 5 square km (2 sq miles) of the northern coast, where the badly outnumbered Tigers fighters are in a last-ditch battle against a military smelling imminent victory in Asia's longest modern war.

The apparent conventional end to a conflict nearing its 26th year drove the Colombo Stock Exchange to a second straight six-month high on Wednesday, traders said.

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READERS' COMMENTS

Sri Lankan Real Estate Tax of 100% discourages investment
Posted by observer, London, UK on Saturday 9 May 2009 at 14:38 UAE time


If the Sri Lankan government would like investment from foreigners it should consider reforming the tax system to remove the 100% tax made on real estate purchases made by foreigners. If there was a less draconian system by the government I am sure that the interest by overseas inviduals & firms would increase in purchasing real estate whilst also providing for a scheme for locals whereby the local infrastructure, i.e. roads, sewerage, utilities etc could be improved to benefit all.

Re. Exploitation
Posted by SR on Friday 8 May 2009 at 15:50 UAE time


Dear Geriant, obviously you don't know about the situation down there as well as the history to it. So please do not comment on things that you don't know of!

Grotesque exploitation of situation
Posted by Geriant, Dubai, UAE on Friday 8 May 2009 at 14:45 UAE time


It is grotesque in the extreme that Sri Lanka is talking about welcoming tourism investment to the shattered island when the thousands upon thousands of civilian bodies are hardly cold. Whether you support the government or the Tamil Tigers is immaterial, as the disgraceful slaughter of civilians has been perpetrated by both sides. To be punting the tortured island as a great place to invest, even before the end of the appalling war, is a sickening ploy, one that should be shunned by all investors and tourists alike. Even if the government claims to have murdered every last Tamil Tiger the island will never be safe, because the roots of the conflict have simply been scorched, not addressed. Tourism in war zones is a no-no, and Sri Lanka is and will be a war zone for decades to come.

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