2.

1: Country/Economy Profiles

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Sri Lanka
Key indicators

GDP (PPP intl $) per capita, 19802008

Population (millions), 2008.......................................19.4

GDP (US$ billions), 2008...........................................39.6
GDP per capita (US$), 2008 ................................1,971.8
GDP (PPP) as share (%) of world total, 2008 .......0.13

5,000

Sri Lanka

South Asia

4,000
3,000
2,000
1,000
0

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank
(out of 133)

Stage of development

Score
(17)

GCI 20092010.........................................................79 ......4.0

Transition
12

GCI 20082009 (out of 134)..................................................77 ........4.0

GCI 20072008 (out of 131)..................................................70 ........4.0

Factor
driven

Basic requirements.............................................................89 ........4.1

1st pillar: Institutions ...........................................................73 ........3.8
2nd pillar: Infrastructure.....................................................64 ........3.9
3rd pillar: Macroeconomic stability................................128 ........2.8
4th pillar: Health and primary education .........................47 ........5.7

286

Transition
23

Efficiency
driven

Innovation
driven

Institutions
7

Innovation

6
5

Business
sophistication

Efficiency enhancers..........................................................74 ........3.9

5th pillar: Higher education and training .........................64 ........4.0
6th pillar: Goods market efficiency...................................45 ........4.5
7th pillar: Labor market efficiency ..................................111 ........3.9
8th pillar: Financial market sophistication.......................65 ........4.2
9th pillar: Technological readiness...................................85 ........3.3
10th pillar: Market size........................................................63 ........3.8

Infrastructure
Macroeconomic
stability

4
3
2

Market size

Health and
primary
education

Higher education
and training

Technological
readiness

Innovation and sophistication factors ............................44 ........4.0

11th pillar: Business sophistication..................................42 ........4.5
12th pillar: Innovation..........................................................46 ........3.4

Financial market
sophistication

Goods market
efficiency
Labor market efficiency

Sri Lanka

Factor-driven economies

The most problematic factors for doing business

Tax regulations ..............................................................14.6
Access to financing ......................................................14.2
Tax rates .........................................................................12.5
Inflation ...........................................................................11.8
Inefficient government bureaucracy...........................7.7
Inadequate supply of infrastructure ............................7.5
Policy instability...............................................................7.4
Corruption.........................................................................7.1
Restrictive labor regulations .........................................4.4
Foreign currency regulations........................................3.7
Poor work ethic in national labor force ......................3.4
Inadequately educated workforce...............................2.0
Government instability/coups .......................................1.5
Crime and theft ................................................................1.4
Poor public health ...........................................................0.7
0

10

15

20

25

Percent of responses
Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country/economy and to rank them
between 1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.

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Sri Lanka
The Global Competitiveness Index in detail
INDICATOR

Competitive Advantage

RANK/133

INDICATOR

1st pillar: Institutions

1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19

Property rights .............................................................68 ........

Intellectual property protection....................................63 ........
Diversion of public funds .............................................73 ........
Public trust of politicians..............................................81 ........
Judicial independence .................................................50 ........
Favoritism in decisions of government officials ..........79 ........
Wastefulness of government spending.......................74 ........
Burden of government regulation................................81 ........
Efficiency of legal framework in settling disputes.......51 ........
Efficiency of legal framework in challenging regs .......58 ........
Transparency of government policymaking .................98 ........
Business costs of terrorism.......................................132 ........
Business costs of crime and violence .........................99 ........
Organized crime...........................................................87 ........
Reliability of police services.......................................102 ........
Ethical behavior of firms ..............................................85 ........
Strength of auditing and reporting standards ..............44 ........
Efficacy of corporate boards ........................................27 ........
Protection of minority shareholders interests ............40 ........

2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08

Quality of overall infrastructure....................................63 ........

Quality of roads............................................................60 ........
Quality of railroad infrastructure ..................................44 ........
Quality of port infrastructure........................................43 ........
Quality of air transport infrastructure...........................64 ........
Available seat kilometers* ...........................................66 ........
Quality of electricity supply .........................................72 ........
Telephone lines* ..........................................................69 ........

3.01
3.02
3.03
3.04
3.05

Government surplus/deficit* .....................................129 ........

National savings rate*..................................................73 ........
Inflation* ....................................................................125 ........
Interest rate spread* ...................................................93 ........
Government debt*.....................................................115 ........

4.01
4.02
4.03
4.04
4.05
4.06
4.07
4.08
4.09
4.10
4.11

Business impact of malaria..........................................82 ........

Malaria incidence* .......................................................81 ........
Business impact of tuberculosis..................................63 ........
Tuberculosis incidence*...............................................73 ........
Business impact of HIV/AIDS ......................................51 ........
HIV prevalence*.............................................................1 ........
Infant mortality*...........................................................54 ........
Life expectancy*..........................................................80 ........
Quality of primary education........................................33 ........
Primary enrollment* ....................................................40 ........
Education expenditure* .............................................114 ........

2nd pillar: Infrastructure

3rd pillar: Macroeconomic stability

Competitive Disadvantage
RANK/133

6th pillar: Goods market efficiency

6.01
6.02
6.03
6.04
6.05
6.06
6.07
6.08
6.09
6.10
6.11
6.12
6.13
6.14
6.15

Intensity of local competition ......................................36 ........

Extent of market dominance .......................................38 ........
Effectiveness of anti-monopoly policy .........................46 ........
Extent and effect of taxation .......................................79 ........
Total tax rate* ............................................................113 ........
No. of procedures required to start a business* ...........8 ........
Time required to start a business* ..............................96 ........
Agricultural policy costs ...............................................69 ........
Prevalence of trade barriers.......................................105 ........
Tariff barriers* ..............................................................88 ........
Prevalence of foreign ownership .................................73 ........
Business impact of rules on FDI .................................29 ........
Burden of customs procedures ...................................85 ........
Degree of customer orientation ..................................32 ........
Buyer sophistication ....................................................32 ........

7th pillar: Labor market efficiency

7.01
7.02
7.03
7.04
7.05
7.06
7.07
7.08
7.09

Cooperation in labor-employer relations ......................74 ........

Flexibility of wage determination.................................78 ........
Rigidity of employment*..............................................43 ........
Hiring and firing practices ............................................84 ........
Firing costs* ..............................................................124 ........
Pay and productivity.....................................................59 ........
Reliance on professional management .......................40 ........
Brain drain ....................................................................52 ........
Female participation in labor force*...........................105 ........

8.01
8.02
8.03
8.04
8.05
8.06
8.07
8.08
8.09

Financial market sophistication....................................55 ........

Financing through local equity market.........................34 ........
Ease of access to loans ...............................................51 ........
Venture capital availability ............................................60 ........
Restriction on capital flows .........................................79 ........
Strength of investor protection*..................................55 ........
Soundness of banks ....................................................60 ........
Regulation of securities exchanges .............................31 ........
Legal rights index*.......................................................83 ........

9.01
9.02
9.03
9.04
9.05
9.06
9.07
9.08

Availability of latest technologies.................................58 ........

Firm-level technology absorption.................................46 ........
Laws relating to ICT.....................................................53 ........
FDI and technology transfer ........................................39 ........
Mobile telephone subscriptions*.................................96 ........
Internet users* ..........................................................107 ........
Personal computers* ...................................................92 ........
Broadband Internet subscribers*.................................90 ........

8th pillar: Financial market sophistication

4th pillar: Health and primary education

5th pillar: Higher education and training

5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08

Secondary enrollment* ................................................71 ........

Tertiary enrollment* .....................................................92 ........
Quality of the educational system ...............................41 ........
Quality of math and science education .......................44 ........
Quality of management schools ..................................40 ........
Internet access in schools ...........................................74 ........
Local availability of research and training services ......46 ........
Extent of staff training .................................................68 ........

9th pillar: Technological readiness

10th pillar: Market size

10.01 Domestic market size index* ......................................61 ........
10.02 Foreign market size index*..........................................75 ........

11th pillar: Business sophistication

11.01
11.02
11.03
11.04
11.05
11.06
11.07
11.08
11.09

Local supplier quantity .................................................56 ........

Local supplier quality ...................................................50 ........
State of cluster development ......................................31 ........
Nature of competitive advantage ................................37 ........
Value chain breadth......................................................34 ........
Control of international distribution .............................18 ........
Production process sophistication ...............................51 ........
Extent of marketing .....................................................40 ........
Willingness to delegate authority ................................44 ........

12.01
12.02
12.03
12.04
12.05
12.06
12.07

Capacity for innovation ................................................49 ........

Quality of scientific research institutions.....................45 ........
Company spending on R&D ........................................41 ........
University-industry collaboration in R&D .....................51 ........
Govt procurement of advanced tech products ...........52 ........
Availability of scientists and engineers ........................44 ........
Utility patents*.............................................................82 ........

12th pillar: Innovation

* Hard data
Note: For further details and explanation, please refer to the section How to
Read the Country/Economy Profiles at the beginning of this chapter.

2.1: Country/Economy Profiles

Part 2A.r2

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