Gordon Banks Ltd.
Gordon Banks Ltd is a large size engineering business, in the field of petroleum refining. The firm has in the late 90s and early 2000s seen a tremendous growth, which has put us in a position where we can expand outside Western Australia, and look abroad.
This report will discuss the different aspects of Sri Lanka, and give a recommendation on the feasibility of starting up a business there.
Sri Lanka
The Democratic Socialist Republic of Sri Lanka, formerly know as Ceylon is located south east, just off the shores of India. The island is 66,000 sq.km and is inhabited by 19 million people. The majority of the people are Sinhalese, which makes up 74% of the population, most of which is Buddhists. The largest minority is the Tamils; they account for 18% of the population and are primarily Hindus. The moors are the second largest minority, populating 7% of the population, primarily Christian, and descendants from Europeans.
Economic
Although Sri Lanka has come very far in many social fields, such as literacy, life expectancy and infant mortality, the generating of economic growth is making slow process, at least compared to the social progress of Sri Lanka.
In 1977, Sri Lanka “abandoned statist economic policies and its import substitution trade policy for market-oriented policies and export-oriented trade.”(CIA World Fact book) This has seen the country shift from relying on agricultural produce for export, to an increased services and manufacturing sector. Over half of the GDP generated, comes from the service sector.
‘The agricultural sector, although it is decreasing, is still responsible for 20% of the national output, and it employs over one third of the workforce’ (Australian Government Department of Foreign Affairs, 2004).
The public sector in Sri Lanka is large. The state controls or dominates in the financial, health, utilities and educational sector. This might explain why the country is experiencing success in the health and educational sector, while lacking in the economic.
Due to faster growth of export and investments in infrastructure projects, the GDP of Sri Lanka is expected to have an annual growth of 6 per cent in the time span from 2003-2007.
Political
The democratic socialist republic of Sri Lanka is a republic. President is elected by popular vote for a six year term. It has a unicameral parliament, consisting of 225seats, according to the CIA World fact book (CIA World Fact book, 2004).
The political life has been marked by a large commitment to democracy, since its constitution was drafted and ratified in 1972. Power has changed sides between mainly two parties, the left winged Sri Lanka Freedom Party, which is the People’s Alliance coalition of current president Chandrika Bandaranaike Kumaratunga, and the right-centered United National Party.
Over the years since independence there have been a number of constitutional changes. By ratifying the 1972 constitution, the Prime Minister converted Sri Lanka, from a constitutional monarchy and into a republic; the west minister system was however kept. The 1978 victory of the United National Party saw the government introduce presidential system where the president was elected for six year at a time, this would place executive powers directly in the hands of the president.
Legal
‘The democratic socialist republic of Sri Lanka has a highly complex legal system. It consists of English common law, Roman-Dutch, Muslim, Sinhalese, and customary law; it has not accepted compulsory International Court of Justice jurisdiction as of yet’ (CIA World Fact book, 2004).
The judicial branch consists of Supreme Court and Court of Appeals. Judges for both courts are appointed by the president.
Social background
Sri Lanka has reached far in the accomplishment of human development. Life expectancy has reach 72 years, which is close to the estimate of any developed country. 92% of the population is literate, mortality is low and the population growth is steadily decreasing. All of these facts reflect the progress Sri Lanka is making in social development, which again is a tribute to Sri Lanka’s work in the field of social service, which got established in the end of the 1940s.
In 1996, Sri Lanka established a human rights commission by act of parliament, and it is a signatory to six core human rights instruments. Problems do remain however as rape and torture in custody is being reported. These have fallen since the ceasefire agreement came into place in 2002. “A ceasefire has largely held for nearly two years between the government in Colombo, dominated by the island’s Sinhalese majority, and the Liberation Tigers of Tamil Eelam.”(The Economist, 2004). The Liberation Tigers of Tamil Eelam are accused of abduction, recruitment of child soldiers, extortion and assassination on political opponents. According to Kris Meyle,(2004, pg8) “A decades-long civil war has claimed tens of thousands of Sri Lankan lives, and land mines continue to maim an untold number of civilians caught up in the aftermath of the war.” Many people have fled the country, and over 200,000 have migrated to the west, as a direct result of the civil war. According to Gambrud (2004, pp.167, 18pgs), “There was a Sri Lankan New Year holiday festival in Kuwait”. This clearly illustrates how large the number immigrants from Sri Lanka have been since the civil war erupted.
Another problem that the country faces is raising suicide rates. According to Mareck (1998, pg.69), “In less than 50 years, the rate of suicide among Sri Lankans has risen from a modest level to one of the highest in the world.”
Cultural background
“The Sri Lankan culture is an ancient one steeped in tradition, yet influenced by its linguistic, ethnic and religious diversity, as well as by its historical past.” (Barlas, Wanasundera, 1998)
Sri Lanka’s blend of ethnicities has at many occasions produced friction and tragedy. In fact, Sri Lanka’s problems hail from two major problems, ethnic intolerance and militant readings of religious philosophy.
However, this blend of different ethnic backgrounds makes an exciting culture. Art and architecture is predominant Buddhist, and the country is full of stupas and sculptures of the serene one.
Traditional dance is similar to India, but it appreciates more agility and symbolism.
The Traditional food in Sri Lanka is often fiery hot, and comes with pancakes to wrap it up.
Recommendation.
‘Due to concerns like, fluctuating currency exchange rates, inflation rates and diverse tax policies’,(Robbins, Bergman, Stagg, Coulter, 2003) as well as the danger of continuing civil war, I advice Gordon Banks Ltd. not to start up operations in Sri Lanka, as of status quo.
