Like what Hong Kong is to China

Multinationals are now taking stock of their operations and focusing on disaster recovery and business continuity while Sri Lanka is being viewed as a refuge for companies wishing to backup their operations in the sub-continent, according to a top IT expert.
Jayantha de Silva, Vice President IFS South Asia, addressing the Asia Pacific ICT Alliance (APICTA) conference last week said Sri Lanka should specifically leverage its geographic position close to the Indian subcontinent, adding that there are factors that offset the advantages of India’s reputation since certain Indian cities are now experiencing congestion, rising wages, staff turnover and other costs, with firms facing an increased risk of losing proprietary knowledge to competitors.

“As one economist puts it, “Sri Lanka has the opportunity to be to India what Hong Kong is to China”. India could also be a potential source for increased training which can lead to the creation of profitable joint ventures for Sri Lanka,” he said, adding that it is a comparative advantage as firms look for additional locations to disperse their service outsourcing requirements.

He identified the Sri Lankan economy as one of the most business friendly in Asia and also as one that is the most liberalized in South Asia.

“A company’s total foreign ownership is permitted and there are no restrictions on foreign exchange,” he said adding that the safety of foreign investment guaranteed by the constitution and the agreements signed with many countries permit double tax relief while, there is equal treatment for foreign and local investors.

He said that in addition to possessing the required technical skills, a workforce with cultural familiarity is another critical requirement for a country attempting to provide outsourcing services.

“Sri Lanka’s comparative advantage is in the quality and not the quantity of its labour force,” De Silva said, adding that Sri Lanka would therefore focus on niche markets rather than trying to compete directly with generic services that are being offered in India and elsewhere.