VOL 4 – PUBLISHED IN TORONTO, CANADA BY THE TIMES OF SRI LANKA JANUARY 2011 ISSUE JANUARY 2011

SSRRII LLAANNKKAA:: 22001100 TTOOUURRIISSTT AARRRRIIVVAALLSS TTOOTTAALL 665544,,447766 Twenty-six years of civil war and ethnic conflict in Sri Lanka contributed to the country’s sluggish tourism industry from that fateful day on July 23, 1983 to May 18, 2009. Sri Lanka was literally on siege during this period thus deterring the steady inflow of tourist traffic to the “Wonder of Asia”. Given the fact that tourists from the western hemisphere avoid travelling to countries with security issues, Sri Lanka tourism suffered for the better part of 26 years. The island nation lost its fair share of leisure tourist inflow. However, let’s not dwell on the past but look forward to a bright and rosy future going forward. There is no doubt that Sri Lanka is heading towards a tourism revolution. Once the country puts into place much needed tourism infrastructure coupled with a solid network of roads and highways in the eastern and northern provinces tourism is bound to experience an upward trend. In a remarkable turnaround last year, Sri Lanka has seen its tourist arrivals swell to large numbers in a short period in time of peace – 20 months. But the best is yet to come.

Sri Lanka tourist arrivals up 46.1-pct in 2010 Tourist arrivals in November were startling - 72,251 tourists arrived in the country, a 63.1% increase as compared to the previous year. Sri Lanka Tourism (SLT) launched a campaign - Refreshingly Sri Lanka Visit Sri Lanka 2011 with 12 events spread across the year. Refreshingly Sri Lanka Visit 2011 will have twelve different theme events happening throughout the year, in keeping with the 12 letters that has been used for the tagline "Wonder of Asia". SLT will offer similar complimentary packages to the 250,000th, 500,000th, 600,000th and 700,000th tourist that arrives in the island in 2011. Sri Lanka's tourist arrivals in December 2010 rose 48.8 percent to 84,627 from a year earlier. For the full calendar year 2010, arrivals were up 46.1 percent to 654,476. Tourist arrivals from Western Europe shot up by 54 percent in December 2010 to 30,855 after travel warning in many countries were relaxed or removed after the end of a 26-year war. T h e island's peak tourism season coincides with the northern hemisphere winter. In December, visitors from the United Kingdom, a key market, rose 16.6 percent to 10,176 while those from Germany, went up 23.6 percent to 4,468 people in October, data from the tourist promotion office showed. The number of visitors from France shot up 74 percent to 3,190, Dutch visitors were up 92.6 percent to 2,340. Tourists from Denmark, Finland and Sweden saw increases of over one hundred percent during the month. Visitors from South Asia were up 50.5 percent to 23,087 with Indians increasing 51.2 percent to 15,753. Maldivian visitors were up 44.5 percent to 5,670. South Asian visitors were up 39.2 percent to 175,694 in the Jan to Dec period. Total arrivals to December were up 46.1 percent to 654,476 from a year earlier.

India emerges Sri Lanka's biggest tourist generator Sri Lanka has had the highest number of tourist arrivals last year from India. Recent figures released by the Tourism Ministry indicate that Indian tourists visiting Sri Lanka reached 126,882, taking a bigger lead over British tourists who numbered 105,496 last year. In 2009 too, Indians were leading, but marginally with 83,634 compared to 81,594 Britons. The total tourist arrivals of 654.476 in calendar year 2010 compared with 447,890 in 2009, marking a 46.1 per cent increase in tourist arrivals. The ending of nearly 40 years of ethnic conflict in the island in May 2009 has seen a surge in the hospitality industry with prices too soaring to new highs. Five star rooms which cost USD 60 a night in 2009 has now more than doubled. Restaurant rates too have skyrocketed because of huge demand.

British tourist arrivals up A 31 percent increase has been recorded in the number of British tourist arrivals to Sri Lanka from January 1 to November 30 this year compared to the same period in 2009, Sri Lanka Tourism Development Authority statistics revealed. From the total number of 569,849 tourists arrived in the country during the above mentioned period 17 percent are British tourists. According to the statistics 95,320 British tourists have visited the country during past 11 months while this number was 72, 858 in the same period of 2009. The British High Commission web site reports that the British Government no longer advises against travel to any part of Sri Lanka and it has eased travel advice to Sri Lanka. British tourists who stay in the country for more than a month are asked to register themselves on the Consular database prior to their visit. The Consular also promotes cultural sensitivity among British tourists to Sri Lanka and publishes annual travel brochures with required information while focusing on respect for religion and religious monuments and sites, awareness of local laws, customs and common sense advice.

Welcoming the 600,000 tourist into the country

December 14 was a historic day for Sri Lanka Tourism (SLT). On this day, SLT Chairman Dr. Nalaka Godahewa and his team welcomed the 600,000th tourist at Bandaranaike International Airport (BIA). Dr. Godahewa said, "This marks a significant moment in the history of tourism. Sri Lanka is now on the world map as a unique safe destination. With this, we hope to achieve the 700,000 target set for Visit Sri Lanka 2011". The lucky guest was presented with a 6 night 7 day package which includes hotel accommodation, ground transport and entrance tickets to historical tourist sites in the island.

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PPRREESSIIIDDEENNTT MMAAHHIIINNDDAA RRAAJJAAPPAAKKSSAA UUNNVVEEIIILLSS 22001111 NNAATTIIIOONNAALL EECCOONNOOMMIIICC PPRROOGGRRAAMMMMEE On January 4, Sri Lanka President Mahinda Rajapaksa launched the country’s National Economic Programme for 2011. President Rajapaksa who is also Minister of Finance said that during 2011, country’s economy would realize people’s expectations of development launched during the humanitarian operations and the Finance Ministry has a decisive task in the journey towards the development. He added that development projects already implemented by the government, has earned many commendations from the international community. Treasury Secretary Dr. P.B. Jayasundara said that economic victories of 2010 surpassed the desired goals and expressed confidence that the country would achieve double digit economic growth soon. Senior Minister for International Monetary Cooperation Dr. Sarath Amunugama, Deputy Minister Geetanjana Gunawardena, and the staff of the Finance Ministry were also present. Meanwhile country’s banking and finance watchdog- the Central Bank of Sri Lanka (CBSL) unveiling its ‘Roadmap: Economic and Financial Sector Policies for 2011 and Beyond’, on Tuesday announced that the country in 2010 accomplished rapid decline of poverty levels, low and stable inflation, stable exchange rates, Middle-income Emerging Market Country status among other achievements. CBSL said that economy maintained historically high foreign reserves levels amounting over US $ 6.6 Billion by the end of 2010. Sri Lanka showed strong growth momentum last year as peace dividend was clearly observed with impressive performance in all sectors and more confidence shown by the business sector, it added. Proper road network essential for development – President Rajapaksa The Highways Ministry has to play a major role to fulfill the hopes and aspirations of the people by making the development program a reality, said President Mahinda Rajapaksa presiding over a special conference held at the Highways Ministry recently. The President said the maintenance of a proper road network is most essential to carry out the development program in an efficient manner to deliver the fruits of development to the people. At this conference which focused on the activities of the ministry during the past six years and its future plans, the President said the government had made the biggest allocation of Rs 102 billion to the Highways Ministry in the past. Such a big allocation was made with the sole intention of providing an efficient and systematic road network and thereby improves community life. Therefore officials should dedicate themselves to ensure the highest dividends to the people. A press release by the President’s Media Division said officials attending the discussion pointed out that although the target of the Maga Neguma road development project was to complete 720km of roads they had been able to exceed the target to 855 km. It was also pointed out that a major part of the Matara-Colombo Expressway was already complete and the entire expressway could be opened for the public by June this year. Nearly 30 percent of the Katunayake- Colombo expressway was also complete and it would be possible to complete the entire expressway by the end of 2012. The work on the Highways Secretariat which started last year was complete up to three levels and the entire building would be ready for opening by the end of this year. The President also directed officials to complete the construction and rehabilitation of roads in the areas where the world cup cricket matches are due to be held soon to facilitate local and foreign tourists expected during the world cup season. The President also noted that the country’s transport service should also be extended with the extension of the road network. Deputy Ministers Nirmala Kotalawala and Rohitha Abeygunawardena and Secretary to the President Lalith Weeratunga also attended the conference.

Miiniister prediicts economiic growth and Minister predicts economic growth and again boasted the world's top two overall finishers and the leaders in six of the ddeevveelllooppmmeenntt iiinn 22001111 Index's 10 component categories. Hong Kong led in four categories, Singapore in one and New Zealand in another. Sri Lanka and Tonga were among the most-improved The year 2011 will mark a decisive cross-road on Sri Lanka’s journey towards countries, and New Zealand remained the least-corrupt country worldwide. Sri economic development says Economic Development Minister Basil Lanka’s score jumped 2.5 points—the largest gain in the region. Tonga, Malaysia and Rajapaksa. Accounting for the significance of the new year, in a statement to Bangladesh registered significant gains as well. On Sri Lanka the Index said that Sri media, Minister Rajapaksa also says: “An Lanka’s economic freedom score is 57.1, making its economy the 107th freest in the opportunity to focus undivided attention on the 2011 Index. Its score is 2.5 points higher than last year, reflecting major gains in post-war economic development has come, political trade, monetary, and investment freedom. Sri Lanka is ranked 19th out of 41 stability which is an imperative is in place, there is an countries in the Asia–Pacific region, and its score improvement is one of the 10 influx of foreign and local investment and besides, largest in the 2011 Index. Sri Lanka’s economy is characterized by poor governance, ongoing political instability that undermines credible reform progress, and heavy there is a marked revival in all sectors in the reliance on foreign assistance. Overall, weak reform efforts have failed to stimulate economy.” Sri Lanka has succeeded in ending the broad-based economic growth. The heavy presence of the state in the economy three decade-old social, economic and political continues to hamper private-sector development. instability in the country under the bold leadership of President Mahinda Rajapaksa. “The hope of all Sri

Lankans today is to see that their country now enjoying the tranquillity of peace, reach the apex of economic development.” Minister Rajapaksa adds: RRss..55000000 CCoommmmeemmoorraattiiivvee CCooiiinn iiissssuueedd bbyy “Sri Lanka could register a series of achievements in the sphere of economy in the wake of ending hostilities last year. An 8% economic growth rate is CCeennttrraalll BBaannkk ooff SSrriii LLaannkkaa ((CCBBSSLL)) expected to be registered for the year. Meanwhile, the rate of employment could be raised and the rate of inflation and the budget deficit contained. The Central Bank of Sri Lanka (CBSL) has announced the launching of new coin to The Colombo Stock Exchange registered the highest turnover on record mark its 60 years anniversary. Accordingly CBSL issued a Frosted Proof crown size while the year also witnessed the highest number of tourist arrivals in the multi-colour silver commemorative coin in the denomination of Rupees 5000. It is history of tourism in the country. the first multi-colour coin issued by the CBSL. In terms of section 52A “President Rajapaksa commissioned the Hambantota harbour. Meanwhile, (1) (a) and (b) of the construction work on a series of infrastructure projects launched by the Monetary Law Act ( President has entered the final phase. “Thanks to the groundwork laid by us Amendment ) No.6 of in the year 2010, we have got the opportunity to embark on a new road of 1998, only with the economic development in 2011. Work on a number of infrastructure approval of the Hon. projects now underway will reach completion during this year itself thus Minister of Finance, the expanding the scope for further investment. As a result, it will become CBSL can issue possible to maintain the momentum of development at a high level and commemorative coins raise the quality of living of the people with the dividends of development. and notes. The reproduction below shows the two sides of the coin.

Therefore, it is a certainty Sri Lanka now on the path of peace will reach a In the past, CBSL has issued commemorative coins to mark important events and prosperous era of economic development in 2011.” persons since 1957 and the coin to mark the 60th Anniversary of the CBSL will be the 50th commemorative coin that is being issued. Issued By Date Currency Department December 14, 2010. The obverse of the coin depicts the crest of the CBSL in colour in the middle and the year 1950 and 2010 appear below the crest. The words "Central WWaallllll SSttrreeeett JJoouurrnnaalll rraatteess SSrriii LLaannkkaa aammoonngg Bank of Sri Lanka" in Sinhala, Tamil and English appear on the periphery of the coin. Reverse image of the coin illustrates a tree, which symbolizes the growth and ““MMoosstt IIImmpprroovveedd CCoouunnttrriiieess”” stability of the economy of Sri Lanka.

Sri Lanka has been rated among the ‘most-improved The face value of the coin "5000" in large numerals appears below the tree with the countries’ in the world in the Economic Freedom 2011 denomination in words in Sinhala, Tamil and English. The year "2010" is depicted to Index, a joint project of The Heritage Foundation the right side of the tree. The coin is round in shape and the diameter is 38.61 mm and The Wall Street Journal. Hong Kong and Singapore with a weight of 28.28 grams. The coin will be issued in an attractive presentation topped the overall ratings, finishing one and two, case accompanied by a certificate of authenticity from the Royal Mint Ltd, UK. This th respectively, for the 17 straight year. But Singapore coin was ceremonially issued to President Mahinda Rajapaksa by Ajith Nivard Cabral, cut into Hong Kong’s lead significantly, mainly on the strength of a better score in the Governor of the CBSL on 15.12.2010 at Colombo. Central Bank has announced anti-corruption and a significant gain in financial freedom. The third and fourth place that only a limited issue of 5,000 coins and a coin will be sold at a price of Rs. 7,000 finishers also remained the same: Australia and New Zealand, respectively. In the through the counters at its Head Office, 30, Janadhipathi Mawatha Colombo 1, Asia Pacific region two-thirds of the countries improved this year, and the region Money Museum at No.58, Sri Jayewardenepura Mawatha, Rajagiriya.

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CCBB GGOOVVEERRNNOORR AAJJIITTHH NNIIVVAARRDD CCAABBRRAAAALL TTAARRGGEETTSS 99..55%% GGRROOWWTTHH BBYY 22001133 The monetary policy roadmap for Sri Lanka in 2011 was announced recently by Central Bank Governor Ajith Nivard Cabraal. Sri Lanka is expected to achieve an accelerated economic growth within the next two years. The forecasted target for 2011 is an economic growth of 8.5% that will accelerate annually to reach 9.5% by 2013. The target set for 2012 is an economic growth of 9%. The Governor of the Central Bank Ajith Nivard Cabraal (inset) disclosing the monetary policy road map for 2011 said that the overall budget deficit is expected to decline further to 6.8 percent of gross domestic product and to around five percent of GDP in the medium term. Accordingly the expected balance of payments surplus in 2011 will be around 350 million dollars. He said the Government revenue and grants are expected to increase to 15.6 percent of GDP while expenditure and net lending is expected to decrease to 22.4 percent of GDP. Similarly the recurrent expenditure is estimated to decrease to 16.1 percent of GDP and public investment is expected to be maintained at 6.5 percent of GDP. Mr. Cabraal further said that the gross foreign exchange reserves reached 6.6 billion US dollars by the end of 2010, and the country’s external outlook had improved with higher export and tourism earnings and inflows from foreign direct investment and lending institutions, Government Information Department reports. Challenges to economic freedom in Sri Lanka are considerable. The average applied tariff rate has dropped significantly, but the persistence of non-tariff barriers still adds to the costs of trade. A lack of transparency and a burdensome approval process continue to impede much- needed growth in private investment. Property rights are undermined by an inefficient judicial system, which is also subject to substantial corruption and political influence, the Index said. The Central Bank governor described that in 2010 the economy has reaped only its ‘interim peace dividend’ and elaborated that we need to work harder to get the ‘final dividend’. Sri Lanka’s GDP in 2010 is expected to have grown by an 8 per cent while 2011 is looking optimistic, with projections of an 8.5 per cent growth Year over Year (YOY) by end 2011. The Central Bank estimates economic growth to then accelerate to 9 percent in 2012 and 9.5 percent in 2013.

A balance of payments (BOP) sheet is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers. Sri Lanka’s estimated BOP figures in 2010 compared to provisional figures for 2009 show a sustainable increase in Exports & Imports. Exports increased to 8,029 million (USD) compared to 7,085 million (USD) in 2009. Imports came in at 13,772 million (USD) as with 10,207 in 2009. Accordingly, Balance of Trade was (5,743) Million (USD) compared to (3,122) in 2009. In addition it also shows a 318% increase in Foreign Direct Investment (FDI) from 153 Million (USD) in 2009 to 486 Million (USD) in 2010. Investor confidence in Sri Lanka is growing and the country should see some remarkable FDI figures in 2011 and beyond. Once final figures are tabulated a more realistic financial outlook is expected. Pending final analysis, below shows expectations for 2010.

EXPECTATIONS FOR THE YEAR 2010 • Industry sector is expected to have grown • A surplus of USD 2.7 billion recorded in the • Annual average inflation reached 5.9% in by 8.7% Capital and Financial Account December 2010, up from a 25 year low of • Agriculture sector is expected to have • Current Account deficit of 3.8% of GDP is end-year annual average inflation of 3.4% grown by 6.3% expected for 2010 in 2009 • Services sector is expected to have grown • Gross Official Reserves increased to USD 6.6 • Core inflation was less volatile and declined by 7.9% billion (equivalent to 6.1 months of to 6.3% on an annual average basis • Unemployment rate 2010 Q3: 5.2% imports) by the end 2010 • FDI is estimated to be around USD 500 • Annual export earnings is expected to • The Rupee appreciated against the US million in 2010, a level lower than record a growth of 13.3% dollar by 3.1% in 2010 expected, reflecting declining capital flows • Expenditure on imports is projected to have • Budget deficit estimated to be 8% of GDP in globally picked up by 34.9% 2010, down from 9.9% in 2009 • Balance of Payment reported an estimated • Workers’ remittances expected to exceed • Debt to GDP ratio fell to an estimated 84% surplus of approximately USD 900 million in USD 4.1 billion in 2010, up by 24% from in 2010 2010 previous year. This would be the highest • Capital investment maintained at 6.3% of ever growth. GDP in 2010

STOCK MARKET PERFORMANCE • ASPI and Milanka Price Index (MPI) • Market capitalisation increased to Rs.2.2 • NPLs of banks declined to 6.3% increased by around 96% and 83.4%, trillion at end December, from Rs.1 trillion respectively, during the year at the end 2009 • 10 IPOs during the year yielded Rs.5.34 • Capital Adequacy Ratio (CAR) of banks billion maintained at 16%

KEY PROJECTIONS FOR 2011 • Anticipated GDP growth of around 8.5% • Overall budget deficit is expected to decline further decrease to 16.1% of GDP • GDP deflator of 6% to 6.8% of GDP and to around 5% of GDP in the • Public investment is expected to be maintained at • BOP surplus in 2011 of around USD 350 million medium-term 6.5% of GDP • Net Credit to the Government to be about Rs.42 • Government revenue and grants are expected to • Long-term inflows to the government is projected billion increase to 15.6% of GDP to be around USD 1.7 billion in 2011 • Credit to the private sector to expand by about 16% • Expenditure and net lending is expected to • FDIs and inflows to the private sector expected to • Broad Money and Reserve Money growth to be at decrease to 22.4% of GDP reach USD 1.5 billion around 14.5% • Government recurrent expenditure is estimated to

MEDIUM-TERM TARGETS • Target of achieving 100 percent financial inclusion by the year 2015 • World Bank’s “Doing Business Index” places Sri Lanka at 102 out of 183 countries; Steps being taken to improve this ranking to 30, by 2016

OTHER PROPOSED INITIATIVES IN 2011 • A new series of currency notes with the theme of The separate groups will be published in the a unique identification number will be completed. development, prosperity and Sri Lankan dancers newspapers on a quarterly basis, commencing July • Further improvements will be effected in payment will be launched in February 2011. I, 2011. systems to safeguard public interest. Develop • Awareness programmes on the security features • “Access to finance” will be considered as a “basic higher level of supervision of service providers and of new currency notes will be conducted to combat need” and given special attention. A fact-finding issuance of guidelines to regulate internet banking counterfeiting. survey will be conducted in early 2011 to address services and mobile payments. This will be to move • New CCPI (based on 2006/07 survey) to come into the knowledge gap of people on banking and towards a common ATM Switch and a common force. This will be a more representative price index financial matters and suggested remedial Debit Card Switch. that reflects most recent changes in consumption measures. • Provide for online-encryption security for patterns. • A wide ranging financial literacy programmes will payment cards. • Finance company sector will be monitored even be launched in lagging provinces. 125 • Steps to improve the efficiency of banks to lower more closely. All Registered Finance Companies will comprehensive financial literacy programmes will intermediation cost. The interest spread in today’s be required to list on the CSE by June 2011. RFCs be conducted in 2011. banking sector is about 4.5%. It will be possible to will be classified into two groups: Those which are • Management of Employees’ Provident Fund to be lower the interest spread to around 3.5% - 4.0% by in full compliance with all applicable laws, further developed. Introduction of a ‘Banking end 2011, particularly given the stability in interest regulations and directions and those which are not. Model’ concept and the project to assign members rates, according to the Central Bank.

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SSEECCTTOORR OOUUTTLLOOOOKK FFOORR 22001111 Top officials comment on likely economic prospects of key industries

Journalist Srian Obeyesekere provides an analytical report that is reproduced below courtesy of Bottom Line

It was a bright rainbow year just gone by for the Sri Lankan economy which has showed tremendous economic momentum with the island reaping the initial fruits of peace in terms of an improvement in business confidence amidst benign macroeconomic fundamentals. The sky high news greeting the country was the Central Bank of Sri Lanka, which released its ‘Roadmap 2011’ a fortnight ago, stating that key sectors of the economy returned to the high growth trajectory having achieved impressive performances in 2010. According to its estimates, Sri Lanka’s Gross Domestic Product (GDP) last year is expected to have grown by 8 per cent. The banking regulator has also projected that GDP will grow by 8.5 per cent in 2011, 9 per cent in 2012 and to 9.5 per cent by end 2013. In light of this development, the Bottom Line spoke to some of the corporate leaders from key industries to get their views on the likely prospects for this year and the challenges that will be existent in the sector.

Following are the comments from these eminent business personalities interviewed.

Tourism “The year 2011 is expected to be a landmark year in putting Sri Lanka on the road to economic development on the back of a booming tourism drive during the year while providing employment for 1.2 million youth. However, rosy as the picture looks for the future, it will be not be plain sailing. There are several hurdles facing various industries from tourism to apparel and ceramics that need to be positively addressed in climbing to the mountain top. With Sri Lanka looking at an all time high of 700,000 tourists this year, the industry is expected to accelerate national development on all fronts utilizing an abundance of natural resources and crucially giving a fillip to the burning unemployment problem,” Tourists Hotels Association of Sri Lanka, (THASL) president Anura Lokuhetty said. Accordingly, he said that 2011 will give the impetus to all round industrial development including agriculture, fisheries and the cottage industry while heading for an all time record 2.5 million arrivals in 2016 as envisaged by President Mahinda Rajapaksa. “Tourism has a great multiplier effect and at least 20 per cent of the country’s population will be dependent on tourism. It would help eradicate social problems as well which was a key factor to a sound economy and a healthy nation. With employment opportunities created at home, the nasty effects to families by people working abroad will also be overcome,” he said. However, he cautioned that with the vast abundance of natural resources and with peace prevailing in the country, we must not be over enthusiastic about it and impose any restrictions on various accessibilities in tourism in Sri Lanka that would deter tourists. We have seen an online visa requirement to obtain visas prior to coming to Sri Lanka. However, restrictions should be introduced by the government from time to time in a ‘customer friendly’ manner,” Lokuhetty added. He also noted that for tourism to improve Sri Lanka needs 15,000 more rooms.

IT Industry Meanwhile, the IT industry is making vast strides in the knowledge economy sphere with more and more students and kids moving into it. The chairman of Sri Lanka Association of Software and Service Companies (SLASSCOM), Dinesh Saparamadu predicted a very bullish 2011 for the industry since more and more interest is shown by international companies in setting up their businesses in Sri Lanka. “This is going to be a good year for the IT industry. The knowledge services prospects are very good and the industry is set to become more vibrant in Sri Lanka. International companies are making more and more inquiries to start enterprises in Sri Lanka and therefore, the IT industry may come into fusion with more international companies setting up business in Sri Lanka and working with local companies in so much as making their ventures or joint partnerships very successful,” opined the SLSSCOM chairman. Saparamadu stressed that both the IT and Knowledge Services or BPO export market was very interesting and that there are lots of opportunities in the knowledge services export market for IT people to see their products and services. He also stressed that the IT industry was so vibrant that the huge demand for knowledge economy was not only prevalent in Sri Lanka but across the globe. It is more from the demand side. In the supply side, we have seen a keen interest from students and parents in IT/BPO as a career which will definitely help the industry to grow, said the SLASSCOM chairman while urging Sri Lankans to get firmly involved with the fast moving IT industry.

Apparel “Our strengths are being world-class manufacturers, highly compliant and ethical, environment friendly, reliability, good quality, logistic excellence and innovativeness. Our weaknesses are poor backward integration, costs, speed to market, distance to market and general lack of productivity while the opportunities were mainly branding,” he said adding that the threats to the industry were bilateral and multi lateral agreements between trading blocks and labour shortages. The apparel industry which picked up since September 2010 from a downward trend in the first eight months to reach a Rs.3 billion mark expects a similar trend to continue in 2011 to go up to 5 per cent to 6 per cent, according to secretary general, Joint Apparel Association Forum (JAAF), Rohan Masakorala. “We performed well because of the recovery from the global economic crisis. Therefore, we have seen increased volumes in our two main export markets, Europe and the US,” he said. Masakorala went on to elaborate that the industry is focusing on targeting new export markets like Japan, China, Russia and India towards converting the product portfolio into a high end product. He, however, observed that ‘we are cautious because the economic recovery is not at full strength.’ Making the ‘Made in Sri Lanka’ label synonymous with quality, reliability and social and environmental accountability in the global context is been given top priority by the JAAF, disclosed M Raghuraman, executive vice president of Brandix Apparel. “In this respect we are working together to come up with business models that will rely more on the business fundamentals. And the industry is gearing up to leverage its position in the region and offer hub services to the retailers and brands,” he said emphasizing that importantly ‘preferential market access is important for a small country without a significant market of its own.’ “We see a high demand in the market but with significant price pressure. The appreciation of the Sri Lankan Rupee, cotton prices being at an all-time high, retail prices still being sluggish have all created enormous price pressures. Our customers’ margins have also been impacted thereby affecting us,” Raghuraman observed.

He pointed out that this unsatisfactory situation was largely due to the unique environment that the apparel value chain operates in. As a result of decades of quota restrictions and a proliferation of preferential market access instruments, the industry kept moving towards the cheapest sources of labour or availability of free trade agreements and not necessarily to locations where the fundamentals were right. This fragmented supply base, purely driven by cost, had little reason to innovate or even the funds to do so. He stressed that Sri Lanka, as a country, was maximizing on the strong reputation that has been built as a reliable supply in every way – this reliability is not only in terms of the ethical and environmental positioning but also the reliability on steady supply without disruptions even through the three-decade-old war. As to the challenges the industry faced, he opined that it was evident that the scope of innovation was significantly enhanced by the research and development which can only be afforded by companies who have built sufficient scale. “We need integration that not only streamlines the value chain but also is large enough to afford such an investment,” Raghuraman added. On the export front, the market in terms of apparel had picked up in the second half of last year. This had been due to a combination of customers placing more orders post-recession and also due to the business migrating to the country with the rising costs in China as well as various other issues cropping up in the Asian region.

Banking In the banking sector, prospects were high with the profitability of the banks expected to improve during 2011, the managing director of Hatton Nation Bank (HNB), Rajendra Theagarajah told The Bottom Line. “The banking sector will benefit due to the reduction in the VAT and corporate tax rates during the year,” he said. Theagarajah said a major issue on liquidity could not be seen because currently the banking sector excess liquidity amounts to more than Rs 100 billion. Further, due to a fair growth in the deposit base during 2010, there was no major issue on liquidity seen in the short to medium-term. However, the huge excess liquidity currently seen in the market will be absorbed by the anticipated loan growth. He reiterated that the banking sector is likely to benefit from the tax and VAT reduction which will positively contribute towards the bottom line of banks. Among the challenges facing the banking sector he identified was to: (a) Build capacity in term of human capital to support the anticipated growth: (b) Change the conservative mentality to take advantage of the growth opportunities: (c) Attract tier 1 and 2 capital to support growth and maintain capital adequacy ratios: (d) Streamline process and procedures to handle increased volumes by reducing turnaround time; (e) Have proper risk management practices in place to preserve loan quality despite aggressive loan growth and to increase productivity and reduce cost to counter the reduction in margins.

Ceramics The GSP+ has had a major impact on the ceramics industry affecting companies exporting to Europe. Bangladesh which has duty free access to Europe under another scheme is the biggest competitor, chairman, Dankotuwa Porcelain Limited Sunil Wijesinghe commented. As to the prospects for 2011, he said, “The domestic-oriented companies such as tiles will do very well because of the buildings and refurbishments using tiles, the export-oriented tableware companies will find it very difficult to survive. However, the appreciation of the rupee and the creeping inflation this year will be a key concern”. The chairman said that ‘while Dankotuwa was focusing more on the Indian and local market and other unexplored markets, exports for 2011 were going to be very tough. “Markets are going for cheaper sources and during a recession, they are less concerned about quality. Exports for 2011 are going to be very tough. That is because markets are going for cheaper sources,” the chairman pointed out.

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FFOORREEIIIGGNN CCUURRRREENNCCYY –– EEXXCCHHAANNGGEE RRAATTEESS SOURCE: CENTRAL BANK OF SRI LANKA UPDATED 20 JANUARY 2011 CURRENCY BUYING SELLING CURRENCY BUYING SELLING Dollar (USA) 110.08 111.81 Pound (UK) 174.68 178.87 Euro (EU) 146.85 151.30 Dollar (Canada) 109.50 113.15 Dollar (Australia) 108.61 112.23 Yen (Japan) 1.33 1.27

EELLEEPPHHAANNTT HHOOUUSSEE KKIIIKK CCOOLLAA SSAALLEESS OOVVEERR 11 MMIIILLLLIIIOONN Elephant House, one of Colombo’s leading soft drink manufactures, recently challenged the cola market with the launch of its own cola, introducing the much anticipated Lankan spirited ‘KIK Cola’ to the Sri Lankan market. John Keels Holdings President, Consumer Foods Jit Gunaratne said it was encouraging that as anticipated, the Sri Lankan consumer identified KIK Cola as a superior drink in the cola category, the response has been brilliant. The cola which hit store shelves on the 4th of December, is available in both buddy bottles (200/300ml) and pet (500/1500ml) bottles and is competitively priced. Gunaratne added that the unique bottle design alone has added a brand new experience to the world of cola. “We are now proud to announce sales of over one million Litres within a few weeks, from the launch on the 4th of December up until 30st December 2010 alone.” Explaining their market strategy behind the success, Chandima Perera, Head of Beverages at Elephant House said, “We have brought in a fresh perspective to the world of branding, taken the best possible approach even in producing our communication campaign, which has so far seen a world class television commercial, including over eight hundred artists and highly acclaimed creative and production support.” The public have seen over the past month around one hundred and twenty innovative hoardings and attention-grabbing shop brandings and with their own website www.getakik.lk and Facebook page with over three thousand registered users so far, KIK cola is clearly emphasizing their place in the market. KIK Cola team is organizing many social events to build the youth culture associated with the brand.

PPrriiivvaattee sseeccttoorr sshhoouullldd ttaarrggeett iiinnfffrraassttrruuccttuurree 2011 ddeevveelllooppmmeenntt --- DDrr... SSaarraatthh AAmmuunnuuggaammaa Prices Senior Minister Dr. Sarath Amunugama said that Sri Lanka welcomes private investments in infrastructure development and the Colombo South Port is an ideal example that blue chip companies are investing in Sri Lanka. He said that private investment in highways and other sectors too are welcome. The lack of private projects coming in is not due to the government’s policies but because the private sector in Sri Lanka is weak and ‘dead scared’ to start such new projects. The Minister was addressing a seminar organised by the Council for Business with Britain held last week. Minister Amunugama accepted that the government failed to achieve the FDI target, US$ 1 billion last year and only around US$ 600,000 foreign investments were achieved. Amunugama who held the portfolio of Investment Promotion over several years under the present regime said that corruption and other weaknesses of the investment promotion agency BOI is one reason for the failure. He said that Sri Lanka has become the safest destination for investors in the South Asian region. The situation has reversed and the security situation in neighbouring countries such as India, Pakistan as well as Thailand has deteriorated. Colombo is becoming a greener and cleaner city. Sri Lanka provides all facilities for investors on par with any country, Vietnam, China or India to attract FDIs. Already huge investments are coming in to the tourism sector for construction of new hotels and expansion projects. IT, Banking and Financial Services are the other sectors that the government expects new investments for, in the coming years. “We expect FDI inflow to pass the US$ 1 billion mark this year,” he said. Neighbouring a fastest growing economy in the world India, Sri Lanka has the advantage of becoming a financial and service hub. The growth stories of Singapore that neighbours Malaysia and Indonesia and Hong Kong neighbouring China as well as the rapidly developing Mauritius neighbouring growing South African economies are similar. Commenting on the interest rate policy he said that after long years our interest rates are higher than inflation and the government is attempting to maintain a positive interest rate. A few years ago inflation was over 25 percent and now it has reduced to 5 per cent. Maintaining an interest rate and inflation is a difficult balancing act. We are committed to maintain free market economic policies. Even under difficult conditions with massive capital outflows, Sri Lanka did not restrict capital repatriation. This policy is now giving dividends and capital is flowing in today. The Minister said that although the heavy rains caused floods and severe damages in most parts of the country the positive side is that huge hydro power capacity accumulated with all the reservoirs being filled to their full capacity. The estimated value of this hydro power capacity is over US$ 2 billion, he said.

EEsswwaarraann BBrrootthheerrss ffiiirrsstt iiinn tthhee wwoorrllldd ttoo oobbttaaiiinn CCaarrbboonnNNeeuuttrraalll CCoommppaannyy CCeerrttiiiffiiiccaattiiioonn Sri Lanka’s family owned tea exporter Eswaran Brothers has become the first tea company in the world to obtain a CarbonNeutral Company Certification. Eswaran Brothers says this is the first step towards reducing the company’s generation of carbon emissions to net zero. The Tea exporter has reduced its carbon footprint through internal initiatives and by purchasing carbon offsets from a biomass renewable energy project from a tea plantation in Sri Lanka. Before implementing the reduction program, the company has calculated the carbon emissions produced in its premises, business travel, its vehicle fleet and also in the third party deliveries. Vice Chairman of Eswaran Brothers Subramaniam Eassuwaren said “We have a lot to learn and a long way to go, but we have definitely taken the important first step”. Eswaran Brothers which has been in existence since 1943 is also armed with ISO 14001 certificate for its environmental management. The company is exporting tea for nearly 40 years. Chairman D. Eassuwaren is a driving force and leads by example. A leading business leader for several decades he was more recently President of The National Chamber of Commerce of Sri Lanka (NCCSL).

TradeWinds e-Magazine January 2011 Page 5 of 28

SSrriii LLaannkkaa bboouurrssee ppeerrffoorrmmss AAssiiiaa'''ss bbeesstt iiinn 22001100 31 DEC, 2010 - REUTERS

COLOMBO: Sri Lanka's stock market edged up 0.3 per cent on Friday to end the year as Asia's best performer for second year in a row hinging on post-war economic optimism, while the rupee closed flat on thin volumes of trade. The island's main share index rose 21.74 points to 6,635.87. It has fallen 7.9 per cent since it hit an all-time high of 7,207.75 on Oct. 4 on year-end settlements, profit taking, and liquidity shortage. Asia's best performer in 2010 has surged 96 per cent, with Indonesia that rose a 46.1 per cent becoming a distant second. In 2009, it was the best performer with 125 per cent. Despite being expensive in valuation, retail investors and government funds mainly boosted the market this year on hopes of rapid economic expansion after the end of the 25-year war in May last year.

The year saw a net foreign outflow of 26.4 billion rupees from the bourse, more than twice of last year's net selling of 11.4 billion rupees. On Friday, offshore investors sold a net 15.9 million rupees. The daily average turnover for 2010 was at a record 2.4 billion rupees, more than four times higher than the previous all-time high of last year's 593.6 million rupees. Friday's turnover was 1.3 billion rupees ($11.8 million). The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.5, the highest among emerging markets, compared with 13.1 of Asian markets and 12.1 of global emerging markets, Thomson Reuters StarMine data showed. The CSE's 14-day relative strength index is at 62, towards overbought or the upper neutral limit of 70. On Friday, 48 million shares changed hands, as against five- and 30-day average of 48.7 million and 54.1 million, respectively. The 90-day average volume is 63.7 million. In 2009, daily average volume was 19.8 million. Sri Lanka's rupee ended flat at 110.94/96 a dollar in sluggish trade, currency dealers said. It has risen 3.06 per cent so far this year. Sri Lanka had the world's fastest rising market as its post-war economy boomed, United Kingdom’s leading newspaper- The Guardian said in a recent report titled ‘the best and worst investments of 2010’. ‘In 2009, the little-known Colombo Stock Exchange rose a remarkable 128% after the Sri Lankan government formally declared an end to the 25-year civil war’ the Guardian said.

Colombo Stock Exchange 128% Stock Exchange of Thailand 70% Buenos Aires Bourse 82% Share Market of Ukraine up 68%

”This year, the market has soared again, rising by 101% (in sterling terms) in the year to 20 December, according to figures compiled for Guardian Money by Vanguard, which operates a wide range of index funds. Argentina, once a by-word for economic default, is also back in fashion among investors. The Buenos Aires Bourse advanced 82%, closely followed by the Thai exchange (up 70%) and the Ukraine (up 68%), and no, we didn't know there was a stock market there, either”. The Sri Lanka stock market is reported to be one of the most modern exchanges in South Asia, with a fully automated trading platform. The value of the companies traded on the market is now more than $20bn (£13bn), and 2011 will see companies such as SriLankan Airlines listing its shares. The island's economy is expected to grow 8% in 2010 and 9% in 2011 – rates usually seen in China. Tourism is booming, with 750,000 visitors anticipated in 2011, while tea exporters are also enjoying strong gains.

Trading Friday

21 Jan, 201117:01:07 Sri Lanka stocks close up 0.8-pct Jan 21, 2011(LBO) - Sri Lankan stocks closed up 0.85 percent Friday with active retail trading in the manufacturing sector, brokers said.

The All Share Price Index closed at 7,254.01, up 0.85 percent (60.91 points) while the Milanka Price Index of more liquid stocks closed at 7,292.95, down 0.11 percent (7.73 points) according to stock exchange provisional figures. Turnover was 4.1 billion rupees. Commercial Bank closed at 282.20, up 3.40 rupees and Hatton National Bank closed at 395.00, up4.80 rupees. John Keells Holdings closed at 295.70, down 2.60 rupees and Aitken Spence closed at 186.50, down 1.40 rupees. Dialog Axiata closed at 11.70, down 0.10 cents and Singer Finance Company closed at 49.20, down 0.40 cents. Laugfs Gas closed flat at 50 rupees with five million shares done and Primal Glass closed at 9.00, up 0.90 cents with 23 million shares changing hands.

BBeelllggiiiuumm hheelllpp ccoonnssttrruucctt ssiiixx rraaiiilllwwaayy bbrriiiddggeess iiinn SSrriii LLaannkkaa

Sri Lanka is to receive financial assistance from Belgium to construct six railway bridges in the country. Sri Lankan Cabinet of ministers yesterday approved a proposal submitted by the Transport Minister Kumara Welgama to receive supplies for the construction of the railway bridges from the Belgian company Transurb Technirail. Under the proposal six railway bridges will be constructed at Wellawatta, Dehiwala Double Line, Angulana, Navatkuli, Polgahawela, and Narahenpita. The total cost to be incurred for the project is 4.8 million Euros, out of which Belgium will grant 3.98 million Euros.

Call Mr. Gayan Ehalepola – Telephone: +94 77 7412771

TradeWinds e-Magazine January 2011 Page 6 of 28

““YYoouu ddrrreeaamm tttoo ssstttaarrrttt aa mmaaggaazzziiinnee……...tttoo mmaakkee ttthhaattt ddrrreeaamm aa rrreeaallliiitttyy iiittt wwiiillllll tttaakkee fffoorrrtttiiitttuuddee aanndd hhaarrrdd wwoorrrkk... IIInn ttthhee eenndd,,, hhoowweevveerrr,,, aallllll ttthhaattt ssswweeaattt ccoouullldd ppaayy ooffffff iiinn ttthhee fffoorrrmm oofff aa ggoooodd mmaaggaazzziiinnee eennjjjooyyeedd bbyy yyoouurrr rrreeaaddeerrrsss...”” JJJoohhnn... FF... KKeennnneeddyy,,, JJJrrr...

Canada-Sri lanka Business Development Network - CSLBDN

The Canada-Sri Lanka Business Development Network (CSLBDN) is a Toronto-based global networking forum open to like minded entrepreneurs and businessmen with an end objective of engaging in commercial activity between Canada and Sri Lanka. Our goal is to promote economic and infrastructure development in Sri Lanka that would result in Foreign Direct Investment (FDI) growth. CSLBDN is not a member driven Association nor is it a Not-For-Profit Organization. It is merely a ‘networking forum’ with a common mission. TradeWinds e-Magazine is the official vehicle that carries information from the network.

CSLBDN’s ongoing business focus would be in the following areas of interest and industry sectors:

 Civil Construction and Engineering (Tourism Infrastructure and Residential Housing vis-à-vis Condominiums)  Technology Transfer (Oil & Gas Exploration, Solid Waste Management, Waste Water Treatment);  Education Sector (Canadian Universities for Sri Lankan Students);  Tourism Promotion (Outbound tourism from Canada to Sri Lanka);  Event Management Services for Inbound/Outbound Trade Missions between Canada and Sri Lanka  Small & Medium Enterprises – B2B business integration;  Commercial Intelligence – interact with senior government officials and business leaders; work with established trade chambers, ministries and state run agencies;  Colombo Stock Exchange – on-line global trading of stocks;  Government Tender Process – Engage in tenders and Expressions of Interest (EOI)  Information Technology (Software Development, Business Process Outsourcing (BPO);  Renewable Energy (Wind power, Hydropower, Solar energy, Biomass, Bio-fuel, and Geothermal energy);

Business success comes to people who cultivate Inner Networks: Entrepreneurs practicing the art of business success know the power of networks. They take the time to identify and build relationships with key peers, mentors, and advisors. This inner network provides support, direction, and an increased number of people to assist. It’s like this - having an inner network of five people who have a network of five more, grows the network rapidly over a period of time. This is our basic concept.

Networking: Entry to CSLBDN is by invitation only and we expect this network to grow and act as a catalyst to generate a healthy bi- lateral balance of trade between the two countries. “Nothing ventured, nothing gained”. Please contact us if you wish to get involved and contribute to our “think tank”.

TradeWinds e-Magazine was launched in August 2010. It is the official publication of CSLBDN and is prepared in collaboration with “The Times of Sri Lanka”. From January 2011, TradeWinds will be published monthly on the 30th of each and every month. The editorial team will comprise of journalists and business leaders from Canada, Sri Lanka, U.S.A., India, Pakistan, Australia and the Middle East. TradeWinds e-Magazine will strive to disseminate quality content that is informative and accurate. We hope to capture business news and tender information that is futuristic and meaningful. “Sharing information for success”, is our theme. A few marketing vehicles can match the power of a high-content, free electronic email newsletter delivered regularly to our subscribers’ “inbox”. We hope to fill this void and build a reputation that is credible. TradeWinds editorial team will faithfully work within the confines of accepted journalistic standards. We believe that “Every news organization has only its credibility and reputation to rely on.” UUUpppaaallliii OOObbbeeeyyyeeessseeekkkeeerrreee

Editor, TradeWinds e-Magazine Publisher: The Times of Sri Lanka in collaboration with CSLBDN Business e-Mail: [email protected] Personal e-Mail: [email protected]

TrradeWiinds e--Magaziine TradeWinds e-Magazine CCOOMMMMEERRCCIIIAALL AADDVVEERRTTIIISSIIINNGG RRAATTEESS FFOORR 22001111 (In U.S. Dollar Currency) Publication Dates: 12 monthly Issues-25th of each month from January to December 2011

CONTRACT ADVERTISING RATES FOR 12 ISSUES Contract Advertising Rates for 06 Issues ONE INSERTION ADVERTISING RATES PER ISSUE (Packaged price 12 insertions Jan-Dec 2011) (Packaged price for 6 insertions Jan-Dec 2011)

Full Page $1,000 for 12 x insertions Full Page $600 for 6 x insertions Full Page $250 per insertion Half Page $600 for 12 x insertions Half Page $300 for 6 x insertions Half Page $150 per insertion Quarter Page $300 for 12 insertions Quarter Page $150 for 6 x insertions Business Card $160 for 12 x insertions Quarter Page $90 per insertion Business Card $90 for 6 x insertions Business Card $25 per insertion

NOTE: NOTE:: AArrrtttwwoorrrkk mmaayy bbee sseennttt vviiiaa eellleecctttrrroonniiicc mmaaiiilll iiinn MMSS WWoorrrdd fffoorrrmmaattt... PPaayymmeennttt mmaayy bbee mmaaddee bbyy CChheeqquuee oorrr WWiiirrree TTrrraannssfffeerrr tttoo “““TTrrraaddeeWWiiinnddss ee---MMaaggaazzziiinnee”””

BBaannkk aaccccoouunnttt iiinn TToorrroonntttoo,,, CCaannaaddaa... PPaayymmeennttt aalllssoo aacccceeppttteedd iiinn SSrrriii LLaannkkaann RRuuppeeeess bbyy TTrrraaddeeWWiiinnddss CCoouunntttrrryy RReepprrreesseenntttaatttiiivvee iiinn CCoollloommbboo... SSiiimmpplllee ccoonnvveerrrssiiioonn///eexxcchhaannggee rrraatttee fffoorrr 22001111 ccaallleennddaarrr yyeeaarrr wwiiillllll bbee UUSSDD $$11 == RRss... 110000

TradeWinds e-Magazine January 2011 Page 7 of 28

SSooaarriiinngg ggllloobbaalll ffoooodd pprriiicceess ssppaarrkk ffeeaarrss ooff ssoocciiiaalll uunnrreesstt

Food prices have soared to record levels around the world, raising fears that poor countries could face a crisis similar to the one that led to rioting and rationing two years ago. “We are entering a danger territory,” Abdolreza Abbassian, an economist at the United Nations’ Food and Agricultural Organization (FAO) told reporters recently. The FAO’s food price index, a formula based on the wholesale price of 55 products including rice, meat, wheat, milk and cheese, reached a record high in December. The index has risen in each of the past six months and it hit 214.7 in December. The previous record was 213.5 set at the height of the food crisis in June of 2008, when soaring prices led to riots in several countries such as Haiti, Somalia and Cameroon while others, including India and Vietnam, restricted rice exports. “There is still room for prices to go up much higher, if, for example, the dry conditions in Argentina tend to become a drought and if we start having problems with winterkill in the northern hemisphere for the wheat crops,” Mr. Abbassian said. “I am feeling less optimistic than I was in November – we have not had much good news.” Prices for many agricultural commodities started rising last fall largely because of poor grain crops in Canada, Russia and Ukraine. They have spiked even higher recently because of dry weather in Argentina, a major soybean producer, and flooding in parts of Australia, which has wiped out many wheat crops.

The price of wheat has jumped about 17 per cent in the last month while corn is up 11 per cent. Both are now close to two- year highs. Other food staples have been soaring as well, including canola, up 43 per cent last year, and sugar, which hit 30-year highs. “The price spike has raised fresh concerns about food price inflation,” said Kenrick Jordan a senior economist at the Bank of Montreal. Mr. Jordan said while the impact will be manageable for developed countries: “In developing countries, where food accounts for a much more significant part of household budgets, the inflation threat is much greater.” The tight supply situation is expected to get worse. The FAO estimates food production will have to increase by 70 per cent by 2050 as the world population expands to 9.1 billion people from about 6.8 billion people in 2010. Canadian consumers will start feeling the impact as well.

Food prices stayed relatively stable in this country last year because of fierce competition among food companies and grocery stores that were reluctant to pass along rising input prices for fear of losing market share. That helped keep food inflation below overall inflation for much of the year. But the sharp increase in commodity prices has prompted food companies like General Mills, Kraft, Sara Lee, Kellogg and ConAgra Foods to drop discounts and start rising prices on many products. “We simply cannot have deflationary or even flat pricing in light of significant and accelerating input cost inflation,” ConAgra’s chief executive Gary Rodkin said during a recent conference call with analysts. The company, which makes dozens of products from popcorn to French fries and spaghetti, said it expects input prices to jump by up to 6 per cent in 2011. Hormel Foods, whose products include Spam, is hiking prices by up to 4 per cent this winter while Sara Lee has already raised some product prices and expects further increases this year. Normally rising food prices would be good news for Canadian farmers, but not this year. Persistent rains across much of the Prairie Provinces last spring and summer led to some of the worst grain crops in years in terms of production and quality. “It’s bad,” said Maureen Fitzhenry, a spokeswoman for the Canadian Wheat Board. “From a quality perspective, it’s probably the worst wheat quality profile overall in at least six years.” Nonetheless, she said the long-term outlook remains upbeat. “The fundamentals that would support grain prices are expected to remain fairly strong.” One key difference between the current price run-up and the 2008 food crisis is the price of oil. It is currently around $90 (U.S.) a barrel whereas it topped $140 in 2008. Fertilizer prices are also lower as is the price of rice, a key food staple in many countries. The current trend, though, is worrisome, Mr. Abbassian said. “But we could have bumper crops everywhere and the prices could collapse – you never know – but, at the same time, high prices are not going to go away and there is a strong possibility that they might remain high for two years.”

With a report from Guardian news service World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt. An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records. Sugar climbed for a third year in a row in 2010, and corn jumped the most in four years in Chicago. Food prices may rise more unless the world grain crop increases “significantly” in 2011, the FAO said Nov. 17. At least 13 people died last year in Mozambique in protests against plans to lift bread prices. “There is still, unfortunately, the potential for grain prices to strengthen on the back of a lot of uncertainty,” Abdolreza Abbassian, senior economist at the FAO, said by phone from Rome today. “If anything goes wrong with the South American crop, there is plenty of room for them to increase.” W h ite, o r refined, sugar traded at $752.70 a metric ton at 11:53 a.m. on NYSE Life in London, compared with $383.70 at the end of June 2008. Corn, which added 52 percent last year on the Chicago Board of Trade, was at $6.01 a bushel, down from $7.57 in June 2008. Soybeans were at $13.6325 a bushel, against $15.74 at the close of June 2008.

Demand from China The cost of food climbed 25 percent from a year earlier in December, based on the FAO figures, after Chinese demand strengthened and Russia’s worst drought in a half- century devastated grain crops. The agency’s food-price indicator rose from 206 points in November. Last month’s year-on-year rise compares with the 43 percent jump in food costs in June 2008. Record fuel prices, weather- related crop problems, increasing demand from the growing Indian and Chinese middle classes, and the push to grow corn for ethanol fuel all contributed to the crisis that year. “In 2008 we had rapid increases in petroleum prices, fertilizer prices and other inputs,” Abbassian said. “So far, those increases have been rather constrained. It doesn’t really reduce the fear about what could be in store in the coming weeks or months.” New York-traded crude was last at $88.44 a barrel, compared with $140 at the end of June 2008. Bulk urea pellets, used in fertilizer as a source of nitrogen, were at $320 a ton in the last week of December, against $460 in June 2008. 9.1 Billion People. Global food production will have to rise 70 percent by 2050 as the world population expands to 9.1 billion people from about 6.8 billion people in 2010, the FAO has said.

TradeWinds e-Magazine January 2011 Page 8 of 28

JJaaffffnnaa IInntt’’’lll TTrraaddee FFaaiiirr aa hhuuggee ssuucccceessss Business Interest in Jaffna Peninsula is growing daily

Duraiappah Stadium held center stage as Indian High Commissioner Ashok K. Kantha, declared open the 2nd Jaffna International Trade Fair (JITF) on 21 January, 2011. The ceremony was attended by Major General G.A Chandrasiri, Governor of Northern Province, President, Federation of Chambers of Commerce and Industry (FCCISL) and officials from Northern Province. India is the partner country for the second consecutive year in the JIFT, which is being organized by Lanka Exhibition and Conference Services (Pvt) Ltd in association with FCCISL and the Chamber of Commerce and Industries of Yarlpanam, Jaffna. In this edition of JIFT more than 45 Indian companies are participating under banner of National Small Industrial Corporation (NSIC) and State of Kerala. The Federation of Indian Chambers of Commerce and Industry (FICCI) and National Research Development Corporation (NRDC) have also sent business delegations. The Indian companies are showcasing various machinery, equipments and products for agro-based industries, food processing industries and equipments for SME sectors.

Speaking at the occasion, the High Commissioner said that India and Sri Lanka share special and close partnership. There is a special place in this relationship for age- old and time-tested bonds between the Jaffna peninsula of Sri Lanka and India. As the people of Jaffna seek to resurrect their lives after years of armed conflict, the Government and the people of India remain committed to facilitate development in the region. As an indication of the high priority attached to the region, India is the partner country for the second consecutive year. High Commissioner added that the interest in Jaffna has been growing in the Indian business community and this is evident from participation of large number of companies from India. The Indian companies will be participating in the trade and investment seminar being organized in parallel to the JIFT and have one to one meeting with potential Sri Lankan businessmen. It is hoped that Indian businesses participating would forge meaningful business ties with local partners and contribute to larger Indian effort to assist in a return to normalcy in the area.

The fair displayed a wide range of products and services across a wide section of industries such as construction & infrastructure development, hospitality, food processing, fishing, automobile, apparel & textiles, agriculture, banking & finance, information technology, etc. Moreover, several opportunities await the business community all over the world to meet and develop business networks with potential entrepreneurs and investors from the Northern and North Eastern part of Sri Lanka and get to interact with Government officials and key business leaders representing public and private sector. This landmark fair illuminates a turning point in the development of the North with the current re-building of infrastructure. The purpose of holding this fair once again is to strengthen and bridge trade links between the North and the rest of Sri Lanka. With the opening up of the main A9 highway re- linking the North and South, the revival of the Jaffna economy has gradually boomed. Jaffna, rapidly emerging as the major market for all industries, the exhibition will be the most comprehensive gateway for all sectors to come together and witness restructuring that is taking place in the North. JITF ensures the creation of a platform for entrepreneurs and manufacturers to build up their business relationships, by strengthening their connections. Companies can expand their businesses and will have an opportunity to analyze the market first hand. Jaffna is Kosala Wickramanayaka (FCCISL) with Indian High Commissioner Ashok K Kantha aggressively pursuing partnerships and business plans with the entire world as it is and Indonesian High Commissioner Abbar Hussain at the opening of the Jaffna expected to dominate the world trade in the years to come. Trade Fair on January 21. Pix: Saliya Rupasinghe

To coincide with the event, Indian Bank opened its first branch in Jaffna, the Managing Director of Lanka Exhibition and Conference Services Arjun Dharmadasa told The Island Financial Review. A special pavilion, he said, has been allocated for 35 Indian firms to display a range of products and services which would include processed foods, apparels, agriculture, construction, education, automobiles, information & communication technology etc. "This of course would be in addition to a host of Sri Lankan entities who have entered into joint ventures with Pakistan, Indonesian, Malaysian, Chinese, German and Italian companies”.

BBuussiiinneessssmmaann HHaarriii SSeelllvvaannaatthhaann ssaayyss,,, • Trade deficit expands 72.3% ““SSrriii LLaannkkaa iiiss aann eexxcciiittiiinngg pplllaaccee ttoo iiinnvveesstt”” • T r a d e d efiiciit expands 72..3% Speaking at the annual Business Today Top 20 •• EExxppoorrtt eeaarrnniiinnggss ggrrooww 1155...44%%,,, Awards ceremony recently in Colombo, representing Bukit Darah as the Managing •• iiimmppoorrtt eexxppeennddiiittuurree uupp 3322...66%% Director, Selvanathan said as requested by him during last year’s award ceremony to make Sri • RReesseerrvveess rreeaacchh UUSS$$ 66...66bbnn bbyy eenndd DDeecc Lanka a conducive environment for business, he was happy to witness that Sri Lanka being the best performing stock market. He appreciated the Government for taking initiatives for rapid infrastructure development and giving low interest rates for conducive business development in the country. He expressed confidence that the Company will be in a position to further expanding their businesses. Renowned business leader, Hari Selvanathan thanked the Government of Sri Lanka (GOSL) specially President Mahinda Rajapaksa and Economic Development Minister Basil Rajapaksa for taking quick initiatives to make Sri Lanka an exciting place to invest in 2011. Hatton National Bank Managing Director Rajendra Theagarajah said he was happy to see the end of the challenging 12 months and come out with flying colours and map the Bank with the nation’s journey. John Keells Holdings Director Ronnie Peiris said that his Group will work and contribute towards the future contribution of Sri Lanka. He thanked the dedicated stakeholders and the prompt initiatives for development by the Rajapaksa government for achieving the number one spot at the awards. Sri Lanka’s trade deficit expanded 72.3 percent during the first 11 months of 2010 to US$ 4,743.9 million from US$ 2,753.1 million recorded during the corresponding For 2009/2010 John Keells Holdings got the first spot from number three ranking last period of 2009. Export earnings during the 11 month period increased by 15.4 year. Transport was the main contributor to the Group’s after tax profits, contributing percent to US$ 7,339.1 million while imports grew at a faster pace, 32.6 percent, 41 per cent. Operation of the South Asia Gateway Terminals at the Colombo Port was reaching US$ 12,083 million, latest data from the Central Bank showed. the main driving factor for JKH. Country’s premier private bank, Hatton National Bank Expenditure on petroleum imports grew by 45.8 percent to US$ 2,694.9 million and Bukit Darah secured the second and third slots. Overcoming both external and during the 11 month period while consumer goods imports grew by 66.3 percent internal hardships the Hatton National Bank recorded a 35 per cent growth in profit after tax and posted Rs 4.3 billion profit after tax. Bukit Darah’s consolidated profit to US$ 1089.6 million. Earnings from apparel exports grew 3.7 percent to US$ after tax had increased to 158 per cent. The Ceylon Tobacco Company ranked fourth 3,038.4 million with total industrial export earnings reaching US$ 5,403.2 million, a while Commercial Bank of Ceylon secured the fifth spot. Colombo Dockyard was placed growth rate of 13.6 percent. Worker remittances during the period grew by 23.9 sixth, Sri Lanka Telecom at seventh while DFCC Bank secured the eighth position. percent to US$ 3,761.9 million. Gross official reserves reached US$ 6.6 billion by Completing the top ten were Hayley’s at ninth and Distilleries Company of Sri Lanka at the end of 2010, which was over the targeted level, the Central Bank said. The 10 positions. The ranking continues with NDB Bank at 11, Sampath Bank -12, Aitken reserves were sufficient to finance imports for six months. Spence -13, Cargills - 14, Lankem - 15, Lanka Orix Leasing Company – 15, Chevron Lubricants – 16, Nestlé Lanka – 16, Tokyo Cement Company 17, Diesel & Motor

Engineering – 18, Seylan Bank –19 and Lanka Walltile -20.

TradeWinds e-Magazine January 2011 Page 9 of 28

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External Affairs Minister Hon. (Prof) G.L. Peiris and his senior staff started the New Year on a busy note sorting out a series of appointments at all levels within the Ministry. On January 15, the minister handed over letters of appointment to over twenty officers from the rank of Minister Counselor downwards. Speaking on this occasion, Prof. Peiris assured officers that in deciding the appointments careful consideration was given to ensure a fair balance between career diplomats and non-career appointments. The minister added that diplomats who had served long in western countries were moved to the East and vice versa. He said that every effort was made to give Foreign Service officers exposure to both bilateral and multilateral work. The minister said that there must be a strong focus on the economic aspect of foreign relations work and investment promotion and that progress reviews will be done periodically. Other appointments included Heads of Mission including the Ministry Secretary.

TradeWinds e-Magazine has learnt of several high-profile diplomatic appointments expected to take place in 2011. Taking precedence all appointments is that of Ambassador Karunatilaka Amunugama, Sri Lanka’s Head of Mission, People’s Republic of China who will be moving to Colombo and taking over duties as Secretary, Ministry of External Affairs. In a straight exchange, present ministry Secretary Romesh Jayasinghe will become Sri Lanka’s new Ambassador to China. It was sixty-one years ago (1950) that Sri Lanka and the People’s Republic of China (PRC) accorded each other diplomatic recognition. Since this time diplomatic and bilateral relations between the two countries has been getting stronger. In addition, China has also has also invested heavily in Sri Lanka. Mr. Amunugama (1985 batch) is credited to have done an incredible job in China since July 2007. In addition, he has served the service long in Asia, first in Cairo, as Counselor in Singapore, and as C.R. Jayasinghe K. Amunugama Ferial Ashraff Ambassador to Thailand and Japan.

Current Secretary, Ministry of External Affairs Romesh Jayasinghe joined the Sri Lanka Foreign Service in March, 1981 and ranks as one of the most – if not the most senior career diplomat in Sri Lanka’s Foreign Service. He has been Secretary of the ministry since October 1, 2009.

Other heads of mission appointments include that of former Commander of the Sri Lanka Navy Admiral Wasantha Karannagoda as Sri Lanka’s Ambassador to Japan. Meanwhile another former Commander of the Sri Lanka Navy Admiral Thisara Samarasingha has been nominated to be the next Sri Lankan High Commissioner in Australia. He succeeds High Commissioner S.C.B. Walgampaya, PC. Veteran career diplomat - Ambassador W.W.T. (Tissa) Wijeratne has been appointed as Sri Lanka’s new Ambassadors in South Korea. Admiral Karannagoda was Commander of the Sri Lankan Navy when the war was won and retired from the post on 15 July 2009. Ambassador Tissa Wijeratne, a career diplomat is presently Deputy Head of Mission at the Sri Lanka’s Embassy in Washington. Also from the 1981 batch, he was Sri Lanka’s Ambassador to Israel and later Additional Secretary of Sri Lanka Foreign Ministry prior to his posting to the United States. Ambassador Ravinatha Aryasingha has completed his term in Belgium and will move to Colombo to take over as Director General, Public Communication Division at External Affairs Ministry. This move is seen as a positive one as he is considered a highly motivated foreign service officer with proven media experience - broadcast and print.

Former Minister Ferial Ashraff is tipped to go to Singapore as High Commissioner succeeding Ms. Jayathri Samarakoon who completed her term in office. Meanwhile another senior officer within the Sri Lanka Foreign Service A. Aziz is expected to take over as Sri Lanka’s Head of Mission in Vienna, Austria. Buddhi Athauda, now serving as Consul General in Frankfurt to move to The Hague as Ambassador (succeeding Grace Asirwatham, career diplomat), Asitha Perera ending his term in Seoul, Korea moves as Ambassador to Italy and Aruni Wijewardene heads to Brussels as Sri Lanka’s Ambassador in Belgium succeeding Ambassador Aryasinha. Sri Lanka’s Ambassador to Germany T.B. Maduwegedera has also completed his term and this vacancy is filled by another senior foreign services officer Ranjith Uyangoda who is expected to move to Berlin. Former Ambassador in Japan, Jayantha Palipane, is expected to take over the SL mission in Doha. Four senior officials based at the External Affairs Ministry, T. R. Ravindran, C.A.H.M. Wijeratne, Asoka Giriyagama and Ranjith Gunaratne will take over other missions in the Middle East.

Ambassador Dayan Jayatilleka presents credentials at UNESCO in Paris, France Sri Lanka’s newly appointed Permanent Delegate to UNESCO, Dr. Dayan Jayatilleka presented his credentials to the Director General of UNESCO, Madam Irina Bokova at the Headquarters of the organization in Paris today (26.01.2011). The Director General welcomed Ambassador Jayatilleka to UNESCO and noted the long history of cooperation and contribution made by Sri Lanka on the Executive Board in particular and at UNESCO in general. She inquired about the role of education in the post conflict context. Ambassador Jayatilleka stated that the values of UNESCO which nurture dialogue, appreciate diversity and recognize pluralism were critical for member states. He added that the role UNESCO continued to play was important as it fostered the closer cooperation of differing collective entities and helped in raising consciousness.

A quick recap of diplomatic appointments is captured below for easy reference:

→ Secretary, Ministry of External Affairs - Karunatilaka Amunugama → Sri Lanka’s Ambassador to China – Romesh Jayasinghe → Sri Lanka’s High Commissioner to Australia - Admiral Thisara Samarasingha → Sri Lanka’s Ambassador in Germany - Ranjith Uyangoda → Sri Lanka’s High Commissioner to Singapore - Ms. Ferial Ashraff → Sri Lanka’s Ambassador to Austria - A. Aziz → Sri Lanka’s Ambassador to Japan - Admiral Wasantha Karannagoda → Sri Lanka Ambassador to South Korea - Tissa Wijeratne → Sri Lanka’s Head of Mission in Doha - Jayantha Palipana → Sri Lanka’s Ambassador to The Hague (The Netherlands) - Buddhi Athauda → Sri Lanka’s Ambassador to Italy - Asitha Perera → Sri Lanka’s Ambassador to Belgium - Ms. Aruni Wijewardene

C a n a d a ' s & Conference M a r k e t i n g I n n o v a t i o n

Toronto | March 7th, 2011 | 9:00AM - 4:30PM

Metro Toronto Convention Centre

TradeWinds e-Magazine January 2011 Page 10 of 28

PPuuttttaalllaamm iiiss tthhee ffiiirrsstt ppuurree vvaaccuuuumm ddrriiieedd ssaallltt pplllaanntt iiinn SSrriii LLaannkkaa Dr. Ravi Liyanage,, Chairman/CEO of Wayamba Salterns said that Salterns in the province will complete construction work on the Pure Vacuum Dried (PVD) plant and salterns in the country during the year. He said work on these projects is progressing and added that the operation of the new salterns and the PVD plant will contribute immensely to salt production in the country. “Sri Lanka spends enormously on the import of large quantities of salt annually which is a huge drain on foreign exchange. The construction of more salterns will help the country to reach self sufficiency soon” Dr. Liyanage said. The import of salt has dropped to around 5-10 percent from around 30 percent a few years ago. The annual import of salt costs around US$ 1 million.

Dr. Liyanage said, “The PVD plant at Puttalam is the first pure vacuum dried salt plant in the country which will help reduce the cost of raw material and offer a new salt product which has a great demand in the hotel sector”. Wayamba Salterns generated a turnover of Rs. 260 million last year following the expansion and development of the salterns. The company focused on construction of new salterns and development of projects. Dr. Liyanage said the government approved the clearance of the two-acre land in Kuchchaveli to construct the largest saltern in the country and added that work on the project will be completed as scheduled. “The construction of bunds and a full-fledged two storey factory where a state of the art salt refinery will be set up have to be completed under the first phase of the project”.

The operation of the Kuchchaveli saltern will help Sri Lanka to be self-sufficient in salt and increase the production of salt based products such as caustic soda, soda-ash and chlorine. Wayamba Salterns plans to eliminate the import of salt through its enhanced production and commence exports of its finely refined crystal salt”, Dr Liyanage said. He said the war ravaged salterns should be renovated. Salterns should be designed to minimize the damage to harvest from adverse weather conditions. High rainfall has been a major reason for the low production of salt in the country. “A national policy and commitment of industry players are vital to develop the salt industry in Sri Lanka. The Cess imposed on salt import should be retained and mechanisms should be adopted to protect the industry”, Dr. Liyanage said. Wayamba Salterns Ltd., a subsidiary of the Raigam Group, a BOI company was set up in 2005. The company has manufacturing plants in Puttalam, Tangalle and Trincomalee. The 120-acre manufacturing plant in Puttalam is the only salt refinery in the country using world- renowned Krebs Swiss Salex Technology to produce free flow table salt.

UUppddaattee oonn MMaattaarraa--KKaattaarraaggaammaa RRaaiiilllwwaayy LLiiinnee Jan 23, Colombo: Sri Lanka government has commenced preparations for the construction of the first phase of proposed Matara-Kataragama railway line, the segment from Matara to Beliatta. Experts of the Chinese International Trust and Investment Company (CITIC) Group which is constructing the entire project have begun feasibility studies to extend the 27- kilometer long railway tracks from Matara to Beliatta under the first phase. The commercial superintendent of the Railway Services Department Wijaya Samarasinghe has said that the Department has already acquired necessary lands for the construction purpose, the state-run radio, SLBC reported. The Railway Department has acquired 1,411 plots of lands from the people to construct the railway line paying Rs. 710 million as compensations. The entire project which is estimated to cost $366 million will be carried out in three phases. The funds are born by both the government and foreign agencies. In Phase II, 48km- long track from Beliatta to Hambantota will be constructed. This line is scheduled to be complete by 2012. Phase III will involve construction of the 39.5km-long segment from Hambantota to Kataragama. The whole project is scheduled to be completed by 2015. The Railway Department expects to provide a convenient service for the passengers as well as to use the railway line as a cost effective way to transport goods to the Southern Province.

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Sri Lanka is ranked the most liberalised economy in South Asia. Investors are provided with preferential tax rates, constitutional guarantees of investment agreements, exemption from exchange control, and 100 percent repatriation of profits. Total foreign ownership is welcome in almost all areas of the economy with only a few areas limited or restricted to foreigners," the JAAF noted. The JAAF states that the apparel industry growth drive, supported by its awareness building campaign, will directly contribute towards increasing apparel export incomes to US$ 5 billion by 2015. Sri Lanka's apparel industry will be launching an industry growth drive in 2011 and an awareness campaign to increase apparel export inc o m e s t o US$ 5 billion in 2015. The government’s latest development policy framework, based on the Mahinda Chinthana, from National Planning Department of the Finance and Planning Ministry titled “Sri Lanka – the Emerging Wonder of Asia,’ has also earmarked the apparel industry for growth.

The policy framework notes that local apparel manufacturers must develop new products to overcome increasing competition in international markets and to remain competitive. "Three textile processing zones will be established in order to enhance th e value addition in apparel exports. Special emphasis will be paid to product diversification and to produce raw fabrics, other raw materials and accessories to feed the apparel industry," says the Sri Lanka, the Emerging Wonder of Asia policy framework. The industry has already positioned itself as an ethical manufacturer of apparel among its local and international stakeholders.

"As pioneers in ethical business practices, passionate advocates of Garments Without Guilt, and home to the world's first green factories, it is obvious how committed we are towards our social and ecological responsibilities," said the Joint Apparel Association Forum (JAAF) spokesperson. The JAAF notes that Sri Lanka has always been among the most progressive in the world when it comes to ecological awareness and responsibility. With numerous programs that include marine conservation and preservation, Sri Lanka has always stepped up for the environment. The Sri Lankan apparel industry also offers three other major advantages to international buyers. The first and foremost being the speed of delivery, based on Sri Lanka's unique geographical location, the industry's vertical integration and interconnectivity within the country. "From manufacturing to logistics, Sri Lanka Apparel has learned to cut timelines, offering our clients the benefit of faster turnaround," said the JAAF. The second strong point of the industry is its ability to supply world class products through the latest technologies and the capacity to innovate. "With a strong focus on building up design capabilities, the latest technologies and the capacity to innovate, Sri Lanka Apparel has been offering clients world- class products for over four decades," said the JAAF. The third advantage offered by the apparel industry is Sri Lanka's favourable business policies and investor climate. The national development policy framework notes that the apparel and textile industry is a significant contributor to the Sri Lankan economy with the highest net foreign exchange earnings. In 2009, export incomes from the sector accounted for 46 percent of total export incomes of the country at US $ 3.262 billion.

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Sri Lanka's tea could see strong demand in the first quarter of 2011 as it is a low cropping period and supply and demand are finely balanced at the end of this year, brokers said. There was good demand at the penultimate auction this week and prices were mostly firm. "As we experience production and supply tightening up, we could end the year with the overall supply/demand equation very much on the balance," Forbes and Walker Tea Brokers said. "In addition, the first quarter is customarily a low cropping period coinciding generally with an improvement to quality.”Therefore, it would be reasonable to conclude that the combination of these factors would enhance the prospects for a strong first quarter in 2011." The first quarter of the year is the time of what's known as the 'Western quality season' when teas grown on the Western slopes of the island's central massif produce their best quality and fetch high prices. The brokers said that at this week's Colombo auction, "notwithstanding the larger volume and the relatively uninteresting quality, the overall undertone in the market was encouraging." The limited availability of liquoring leafy teas were competed for strongly at higher prices, they said. "With the auction being the only source of purchase, concentration of demand has led to increased price levels," brokers Asia Siyaka Commodities said. John Keels tea brokers said crops from westerns, Nuwara Eliya and Uva regions continue to be low, while low growns have shown a slight improvement.

Tea output hits record high. Sri Lanka, one of the world’s biggest producers of black tea, reported yesterday that output hit a record high in 2010, helped by good weather. The total crop for 2010 grew by 13.1 percent to 329.4 million kilogrammes (72 4.7 million pounds) from 291.1m kilograms a year earlier, according to the Sri Lanka Tea Board. Tea is the island’s biggest commodity export earner. The last time Sri Lanka harvested a record crop was in 2008 when it produced 318.7 million kilogrammes, the board’s director general H D Hemaratne said. “The weather gods were good to us for the most part of last year,” Hemaratne said. H e declined to forecast the 2011 harvest, which has been hit by heavy monsoon rains that fell on the main tea-growing areas in central Sri Lanka. Production could also be curtailed this year by industrial unrest as a wage pact for nearly a million workers expires in April, commodity analysts say. Tea export earnings from January to November last year jumped 16.7 percent to $1.2 billion over the same period in 2009, the Central Bank of Sri Lanka reported on Friday. (AFP)

TradeWinds e-Magazine January 2011 Page 11 of 28

AADDBB LLEENNDDSS UUSS $$ 112200 MM

TO IMPROVE POWER NETWORK: Sri Lanka will receive a $ 120 million Asian Development Bank (ADB) loan to help expand and improve its power network to deal with rising customer demand and gaps in coverage which are hindering growth. ADB’s Director Board has approved the loan, along with a technical assistance grant for the Sustainable Power Sector Support Project which will be used to build hundreds of kilometers of new transmission lines, to strengthen distribution systems in rural areas, and to electrify about 12,000 households in remote villages.

The project will target regions such as Eastern and Uva Provinces where electrification is below the national average and power supply is unreliable. “This project will help expand coverage and improve the efficiency and reliability of electricity Rural supplies in areas that require them most urgently, thus supporting the Government’s goal of providing nearly 100 percent of electrification to households in the country with electricity by 2016,” ADB Senior Energy Specialist Mukhtor Khamudkhanov said. The project get boost will also help the Government reduce imports of expensive, polluting fossil fuels by providing a credit line of nearly $ 1.3 million to private developers for about 19 targeted small hydropower facilities and by financing the detailed engineering design of a 30 megawatt hydropower plant. The technical assistance will help create a national energy efficiency strategy and implement urgent energy efficiency policy initiatives. The loan funds will include a 25-year $ 110 million loan from ordinary capital resources and a 32-year $ 10 million equivalent loan from ADB’s confessional Asian Development Fund. The Sri Lankan Government will provide just over $ 42 million, for a total project cost of about $ 162 million. The technical assistance will include a $ 1.85 million grant from the Asian Clean Energy Fund, established by the Japanese Government, under the Clean Energy Financing Partnership Facility administered by ADB, and nearly $ 400,000 from the Sri Lankan Government. The Power and Energy Ministry is the executing agency for the project which will run for three years with an expected completion date of April 2014. ADB, based in Manila, is dedicated to reducing poverty in Asia Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration.

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Consumer groups will spring up soon in Sri Lanka and they should be encouraged, Federation of Chamber of Commerce(FCCISL) Chairman Tissa Jayaweera said. Delivering the key note address at National Cleaner Production Awards 2010 in Colombo, he said enterprises in Sri Lanka are still comfortable as it is still not a consumer demand driven market and there are no organized consumer groups. But as global market demands are heavy and complex, consumers impose pressure in demand driven markets. Consumers have formed consumer protection societies in the developed world, and make an impact on product reaching consumer. Consumers are very vigilant and conscious about quality and environment impact of the products they purchase. It may be bad news for producers. But it is a blessing in disguise. Today Sri Lanka’s apparel is world renowned and in great demand due to the pressure from buyers. Producers should not respond to buyer pressure but be prepared and be ahead of consumer demands,” he said. Jayaweera said consumer demands are not only increasing for quality, price and delivery. Consumers of today are demanding good environmental practices and corporate social responsibility. People of developing countries blame and condemn developed countries for exploiting natural resources, requesting us to tighten our belts and halt development. But it is unfair for them to impose stringent market barriers such as environmental compliance and social responsibility although it is true that they exploited the natural resources. It is time Sri Lanka set up a National Innovation Council and develop a commercial interface to transfer developed technologies for practical application in industry and commerce, Jayaweera said.

Date and Time Match IICCCC CCRRIICCKKEETT WWOORRLLDD CCUUPP

22001111 FFEEBBRRUUAARRYY GGAAMMEESS Sat Feb 19 1st Match, Group B - India v Bangladesh 08:30 GMT | 14:30 local Shere Bangla National Stadium, Mirpur Sun Feb 20 2nd Match, Group A - Kenya v New Zealand 04:00 GMT | 09:30 local MA Chidambaram Stadium, Chepauk, Chennai

Sun Feb 20 3rd Match, Group A - Sri Lanka v Canada 09:00 GMT | 14:30 local Mahinda Rajapaksa International Cricket Stadium,

Sooriyawewa, Hambantota

Mon Feb 21 4th Match, Group A - Australia v Zimbabwe 09:00 GMT | 14:30 local Sardar Patel Stadium, Motera, Ahmedabad

Tue Feb 22 5th Match, Group B - England v Netherlands 09:00 GMT | 14:30 local Vidarbha Cricket Association Ground, Nagpur

Wed Feb 23 6th Match, Group A - Kenya v Pakistan 09:00 GMT | 14:30 local Mahinda Rajapaksa International Cricket Stadium,

Sooriyawewa, Hambantota

Thu Feb 24 7th Match, Group B - South Africa v West Indies 09:00 GMT | 14:30 local Feroz Shah Kotla, Delhi

Fri F e b 2 5 8th Match, Group B - Bangladesh v Ireland 03:30 GMT | 09:30 local Shere Bangla National Stadium, Mirpur

Fri Feb 25 9th Match, Group A - Australia v New Zealand 09:00 GMT | 14:30 local Vidarbha Cricket Association Ground, Nagpur S a t F e b 26 10th Match, Group A - Sri Lanka v Pakistan 09:00 GMT | 14:30 local R Premadasa Stadium, Colombo

Sun Feb 27 11th Match, Group B - India v England 09:00 GMT | 14:30 local Eden Gardens, Kolkata

Mon Feb 28 12th Match, Group A - Canada v Zimbabwe 04:00 GMT | 09:30 local Vidarbha Cricket Association Ground, Nagpur Mon Feb 28 13th Match, Group B - Netherlands v West Indies 09:00 GMT | 14:30 local Feroz Shah Kotla, Delhi

TradeWinds e-Magazine January 2011 Page 12 of 28

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The “downtown core” of a city is almost always the most beautiful part of a city anywhere in the world. In the last four to five decades the world has seen successful development projects which reflect the community's vision for an attractive, vibrant, pedestrian-friendly and economically resilient downtown core area. By building upon the Downtown Core Area's existing physical, cultural, social and natural assets the reshaping usually establishes a comprehensive development framework to guide decision-making related to the growth and vitality of the Downtown Core as evidenced by the Government of Sri Lanka’s decision to revitalize, rebuild and reshape the City of Colombo. Two mega projects are being mooted in Sri Lanka that will change the skyline of the downtown core of the City of Colombo. News is buzzing across media networks that Colombo’s Galle Face area and its surrounding is first to be developed with luxury hotels, high-rise commercial and residential buildings and other amenities.

The Galle Face is a promenade which stretches for half kilometer along the coast in the heart of financial and business district of Colombo, Sri Lanka. The promenade was initially laid out in 1859 by the British Governor of Ceylon, Sir Henry Ward, and was also used for horse racing and as a golf course, although the original Galle Face Green extended over a much larger area than is seen today. It was known as the Colpetty Race Course. The Galle Face Green is currently a 5 hectare ribbon strip of land between Galle Road and Indian Ocean which is now the largest open space in Colombo. This is a popular destination for children, vendors, teenagers, lovers, kite flyers, merrymakers and all those who want to indulge in their favorite pastimes next to the sea under the open sky. On Saturday and Sunday evenings, the land is busy with day trippers, picnickers and food vendors. There are two large hotels that border the strip; the Ceylon Continental Hotel and at the other by the quaint Galle Face Hotel, one of Sri Lanka's oldest and most popular hotels, with a variety of old world charm including old furniture, hand carved doors, balconies and high ceilings. Radio Ceylon and subsequently the Sri Lanka Broadcasting Corporation, the oldest radio station in South Asia has recorded many programmes here from their outside broadcast input in the 1950s and 1960s. The Galle Face Green is administered and maintained by the Urban Development Authority of Sri Lanka (UDA).

The first project estimated to cost around U.S. $500 Million was launched recently. This was stated by Secretary to the Ministry of Finance Dr.P.B.Jayasundera when he addressed a post-Budget Seminar organised by the Chartered Accountants Institute of Sri Lanka. He said that investment proposals from the private sector for these development activities are being received and steps have been taken to find suitable land for this construction work. Dr. Jayasundera said that in line with this huge development programme, steps have been taken to declare the Presidential Secretariat Building, the Finance Ministry Building and the Galle Face Hotel Building as important places of National Heritage. He said that the Army Camp facing the Galle Face will be shifted to a new location.

In another development, a Formula One track is planned for the New Port City to be constructed in the vicinity of the Colombo Port. According to the Chairman, Ports Authority, Dr. Priyath Wickrama an eight lane F1 track will “definitely” be a part of the New Port City, he said. Formula One has strict requirements for its tracks and the Sri Lankan track, if it is to be a reality, must be carefully planned if it is to be implemented in the New Port City. Currently planners are formulating ways of fitting the track in the premises of the city whilst also allowing for maximum leeway for commercial activities. Space is also a problem so a synergistic approach with commercial roads must also be adopted. F1 tracks around the globe often use sections of public roads for racing. The New Port City will set Sri Lanka up for its own city-on-the-sea akin to Palm Island and The World, Dubai. The city is to be constructed on filled land taking up the area between the Southern edge of the new Colombo South Port and the Fort Lighthouse. The total area of sea reclaimed is set to be 450 acres.

‘The New Port City Development Project will be implemented in March 2011’ said Chairman, Ports Authority, Dr. Priyath Wickrama. The New Port City is a concept of President Mahinda Rajapaksa who was apparently inspired while out on a visit to inspect the landfill being constructed for the Colombo South port. ‘The new city is going to be well planned. Colombo unfortunately is not very well planned anymore. It was a quite well planned city during colonial times but has since become haphazard,’ said Wickrama. The initiatives for the city involve shopping complexes, hotels, office complexes, etc. There is also a marina planned for boats and other water based activities. The construction is set to begin in March 2011 with an initial budget of $450 million. The filling of the land is projected to take two years while subsequent infrastructure construction is projected to take another one and a half years. ‘The Ports Authority will call for investors to buy land for use and construction as the project gets underway’ said Wickrama adding that private sector funds will be key in ensuring that the project is completed in time. He also said that many investors both local and foreign have shown ‘a lot of interest’ in investing already. ‘The models have been constructed and feasibility studies have been done. All the expertise has been provided by us and no foreign consultants have been approached so far. The technology and knowledge needed for filling the land is sophisticated. A monorail is planned to reduce congestion in the city. Entrants will be encouraged to park their cars at the entrance and use the monorail to navigate the city,’ he said. According to Wickrama the funding will likely come from a Chinese source as some interest has already been conveyed from there. Wickrama also mentioned that bonds will be issued to raise funds in addition to private investments. ‘The Ports Authority has been financially stable but could perform much better,’ said General Manager Capt. Nihal Keppetipola, adding that a key reason for this is the foreign exchange loss suffered in the repayment of a yen loan taken for super infrastructure developments a decade ago. ‘The New Port City projects more than anything else will be a massive revenue earner for the Ports Authority,’ he said.

Sri Lanka would build a city in the sea which is bigger than Male, the capital of Maldives, at Galle Face Green. This would, for the third time, change the contours of the island nation. The first time this happened was when the Ruhunu Magampura Mahinda Rajapaksa International Port was opened last November when sea water was taken in for the port. This was followed by the Colombo South Harbour development project which would add a 6.2 kilometre breakwater and reclaim over 400 acres from the sea. The Urban Development Authority (UDA) and the Sri Lanka Ports Authority (SLPA) are now planning to reclaim land from the sea and build a 500-acre plus port city under the Galle Face development project, which would once again change the landscape of the country. The project has already received approval for environmental issues and construction is expected to commence by the end of the year. The project is to be completed in three years.

One of the key players who would carry this mammoth task forward, UDA Chairman Janaka Kurukulasuriya said that the project is expected to cost around Rs. 30 billion and funding would come through the SLPA a s well as from investors. "We are also hoping to conduct some pre-sales," he said. Sri Lanka is fast becoming a paradise for investors as well as for high-spending tourists. "This was one reason for us to launch this project." The other reason to build this city on the current location is to support the new Colombo South Harbour. "Though a breakwater is built, the waves could have an impact on the smooth floor of the Colombo South Harbour development project. This proposed 500-acre development would also act as a buffer," he said. The proposed buildings that would be built in the port city would also help the extension of the Colombo Harbour. The Chairman outlined that they would build this port city, mainly targeting the private sector, both local and global. "Once we get the project off the ground, we would market it globally", he said. The port city would be the best landscaped property in the island. First, a second breakwater would be built in front of the Old Parliament. "This would be at sea level and would not be visible to the public. This would serve as a buffer to the proposed harbour city", Kurukulasuriya said. The next step would be filling the reclaimed land and would commence from the outer side of the Colombo South Breakwater. He explained that both Colombo South Harbour development and port city projects would stretch up to the Old Parliament building and the view from Galle Face Green would not be affected in any way. The Lotus Road, which lies between Galadari Hotel and the Old Parliament building would be extended to the sea from the roundabout, creating a four-way junction with a bridge. "The bridge would run over the sea and be the access road to the new property," the chairman said.

The new property would be divided into three segments-one to house offices, the second for residential purposes and the third for leisure. In the area proposed for leisure, a yacht marina, a mini duty-free shop and Customs office would be built. This itself would be a mini international harbour. The land would be provided for investors for leisure activities and many international hotel chains along with local investors are expected to invest. A golf course too is planned to be built. A s e c o n d suspension bridge would be built in the centre of the city. The area of the city adjoining the Colombo South Harbour would be reserved for offices and the maritime sector and many maritime investments are expected to be made here. Several private universities and educational institutions too are expected to invest in the project. Kurukulasuriya said the Secretary of Defence Gotabaya Rajapaksa is very keen on this project and has infused many new ideas to make the city more colourful. All Sri Lankans will be proud of the modernization of Colombo City to international standards. The new developments would bring the country even closer to the end objective of making Sri Lanka the “Wonder of Asia”.

TradeWinds e-Magazine January 2011 Page 13 of 28

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The Sri Lankan government is in the process of introducing an on- line facility for foreigners to obtain visas to enter the country. On December 31, President Mahinda Rajapaksa held discussions at the Temple Trees with the relevant ministers and officials to introduce a simplified on-line method for the visitors to obtain visa without having to visit the Sri Lankan missions overseas. The Department of Immigration and Emigration is already working out the modalities of the new online visa regime, which will replace the current system of visas on arrival in the country, the government said. Ministers Prof. G. L. Peiris and Basil Rajapaksa, and Defense Secretary Gotabaya Rajapaksa were also present at the discussion.

Additionally, visitors to Sri Lanka from Singapore and the Maldives, which grant Sri Lankan passport holders landing permits on arrival, would be reciprocally exempted from having to obtain a visa before reaching the island. The new measures being introduced aim at providing conveniences to the tourists and promoting tourism in the country. The new online visa scheme for all visitors is to be introduced soon replacing the current ‘on arrival visa’ for selected countries. Controller General of Immigration and Emigration Chulananda Perera told BBC Sandeshaya that representatives of tourism industry whom he recently met agreed that it is a much improved measure than the current system of granting visa. The tourism industry has earlier expressed concern that the new system might hamper the government’s attempts to promote tourism in post-war Sri Lanka. But Economic Development Minister Basil Rajapaksa says the new measure was aimed at helping tourists.

'At home visa' “We have changed the on-arrival visa to at home visa,” Mr Rajapaksa told BBC Sandeshaya. The tourists intending to visit Sri Lanka could apply online supply few details such as name, passport number and date of birth, he said. “Now anybody can apply visa from home and they would receive it within 24-72 hours.” The government says that the new measure would be introduced soon but there will be a trail period until it comes into force. According to information provided by the Department of Immigration and Emigration, citizens of 81 countries including the USA and UK currently can obtain a landing endorsement for a 30-day period at Colombo’s Bandaranaike international airport. Only citizens from Maldives and Singapore will be exempt from obtaining visa as a reciprocate measure. Mr Perera says the date of its implementation will soon be announced.

“There have been instances, for example, of visa being rejected at the airport but now you can get the response while you are at home,” Minister Rajapaksa said. He added that the government has allowed a trial period for those who are yet to get used to the new visa system. And until the visitors get used to the new system, the minister said, a parallel system of on-arrival and online visa will be operated. “And there will be special facilities at the airport for those arrive with the online visa.” The authorities however stress that the current system of on-arrival visa would not be annulled without properly informing the tourists and other visitors.

The Colombo City Tour is Colombo's first ever open deck city tour service launched by Sri Lanka Tourism Development Authority and Ebert Silva Holidays (Pvt) Ltd, in a public - private partnership. Ebert Silva Holidays is the leisure wing of Ebert Silva Group. Ebert Silva Touring Company Ltd is one of the pioneering and largest passenger transport companies in Sri Lanka and also the recipient of the prestigious Presidential Award for the Best Domestic Tour Operator in years 2007 & 2008. The Colombo City Tour adds flavor and excitement to the touristic experience the city of Colombo has to offer. The imposing open-deck double decker bus o f t h e Colombo City Tour has proved to be a magnetic ‘happening’ in the city of Colombo, where both the foreign and local tourists who have experienced the Colombo City have been highly impressed by the panoramic view of Colombo seen and experienced on board the open deck. The comprehensive and detailed live commentary enlightens the passengers of the history of this charming city with detailed descriptions of all important places and landmarks of Colombo.

The Colombo City Tour celebrated its First Anniversary on Sunday 23rd January 2011. The First Anniversary celebrations commenced at with the presence of Dr. Nalaka Godahewa, Chairman, Sri Lanka Tourism together with other senior officials, and invitees including that of all city hotels and the media among others at the Colombo Galle Face Hotel. Other features included an ‘Anniversary Colombo City Tour’ with a live commentary followed by refreshments extended courtesy Galle Face Hotel, Colombo. With its charming logo that includes frangipani flowers emphasizing the connectivity with the city and serendipity, at present Colombo City Tour operates around the city three days a week being Friday, Saturday and Sunday with plans to further increase the frequency with an added choice of tours in the near future. With Sri Lanka taking off to greater economic heights and the tourism industry playing a pivotal role in boosting and propelling the country towards achieving those goals, the Colombo City Tour is an exciting initiative orchestrated by Malraj Kiriella, Acting Managing Director, Sri Lanka Tourism Promotion Bureau one year back.

Rajini de Silva Mendis, Managing Director of Ebert Silva Holidays said they faced many challenges initially to get this initiative up and running. "It is expected in any new product when first introduced but we have taken them on and seen them through and would like to take this opportunity to extend our appreciation to Sri Lanka Tourism for the encouragement and support and the Sri Lanka Transport Board for their committed contribution." With regard to the future of the Colombo City Tour and the industry as a whole Ms. Mendis elaborated, "This venture portrays a unique experience Sri Lanka’s foremost city has to offer to its visitors from around the world, whilst showcasing its unmatched tapestry of various cultural influences and history. This is only the start and other leading cities in the island should follow with this concept soon. I believe that ‘here and now’ is the long awaited time for all of us to make a unique contribution to help realize our dream, the dream of all Sri Lankans – Sri Lanka’s Dream. Ebert Silva, a pioneer and legend in Sri Lanka’s travel and tourism is indeed proud to be in collaboration with Sri Lanka Tourism in making another distinct contribution towards the industry through the Colombo City Tour, and contributing to make Sri Lanka attain its due place in the global map."

NNiittaa AAmmbbaannii sshhoowwss iinntteerreesstt iinn NNoorriittaakkee mmaaddee iinn SSrrii LLaannkkaa

Is it the quality of the product manufactured in Sri Lanka or the price? India's richest person, Mukesh Ambani, has built the world's most expensive house, Antilia , in South Mumbai's tony Altamount Road. His wife Nita is entrusted with furnishing the mansion and included in the shopping list is chinaware made in Sri Lanka - 25,000 pieces of Noritake crockery. She's settled for 106-year-old Japanese brand Noritake, whose 22 carat gold/platinum-trimmed porcelain crockery has fans round the world, the Times of India reported. Interestingly, the big-ticket order has not been placed at the exclusive Noritake showroom in Mumbai's Kemps Corner, a stone's throw from the Ambani tower. Rather, corporate India's first lady has chosen Sri Lanka for this acquisition as Noritake is 70-80% cheaper there than elsewhere in the world, including India. This is because the Japanese brand has its largest manufacturing facility in Sri Lanka, and exports its fine china to over 100 countries from there. M Deva Raja, General Manager of Noritake Sri Lanka, said the company had an enquiry from Ambani for more than 20,000 pieces but has not executed the order as yet.

Noritake, originating in a village of the same name near Nagoya in Japan, has been an A-lister ever since it hit the US market a little over 100 years ago. Cleverly appealing to both the mass market and the high end with a technologically superior and diverse product range, Noritake has been a favourite with homes, ho t el chains and airlines for its delicate designs and durable quality. An order of such a magnitude is good business for Noritake. Noritake's Raja said the company was studying the specifications in the order and whether they will be able to supply that many pieces. A 50-piece dinner set with 22 carat gold/platinum trimmings could cost $300-500 in Sri Lanka while the same would be priced between $800 and $2,000 in India. Multiply that by 500 (to cover Nita Ambani's 25,000-piece order) and the price could have hit $1 million at the upper end in India. Even a 500-room five-star hotel with five restaurants (the only other entity which could conceivably put in a similarly-sized order) would draw the line at that price tag, particularly if a cheaper option was available. Her thrift, therefore, was complimented by social commentator Shobhaa De. "If she is indeed buying her crockery from Sri Lanka, I would say that she is a practical Gujju housewife, cost-conscious and sensible and I admire her for it," Ms De said. "Why should she pay five times more for something here? She is setting a good example for others to follow!"

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CCoonnssttrruuccttiiioonn ttoo ccoommmmeennccee ssoooonn ffoorr WWoorrllldd CClllaassss HHoossppiiittaalll iiinn JJaaffffnnaa

The construction of buildings for the new hospital will commence shortly and is expected to be completed within one year. A fully fledged, 100-bed hospital of international standard named Northern Central Hospital is being launched in northern Jaffna as a Board of Investment (BOI) approved project, According to Dr. Keerthi Sri Edirisinghe, the consultant engaged in designing of the new venture, this will provide a boost to the medical sector in the region which is slow in moving into the north compared to other service sectors like banks, insuranceand finance companies. He said the new project is the second stage of the expansion programme of the Central Nursing Home which is already in existence and has enjoyed great reputation from the Northern population for the past 30 years. Internationally trained nursing staff would be engaged on a round-the-clock duty roster at the hospital. The recruitment of trainee nursing staff is already in progress, he said. Services would include Outpatients Department Service (OPD), Channeling, Cardiology, Neurology & Neurosurgical unit, Rehabilitation unit, Eye, ENT, Dental, Nephrology, Orthopedic, Plastic Surgery & Vascular, Maternity Home and other essentials such as Laboratory, CT scan, Nursing Home for Elders. Ambulance services to transport patients between the hospital and their homes would also be available.

MMaannuuffaaccttuurriiinngg bboooomm ppoowweerriiinngg UU..SS.. eeccoonnoommyy Associated Press WASHINGTON—U.S. factory output grew for the fifth straight month in November, adding to evidence that manufacturing remains an engine of economic growth. The Federal Reserve said Wednesday that output by the nation’s factories, utilities and mines increased 0.4 per cent last month, after falling 0.2 per cent in October. Factories produced 0.3 per cent more goods for consumers and businesses, after boosting output by the same amount a month earlier. The strongest factory gains came from big-ticket items expected to last for several years. Separately, the Labor Department reported that inflation remained tame with consumer prices barely increasing in November. Small increases in food and energy costs pushed the Consumer Price Index up 0.1 per cent. Excluding food and energy costs, core consumer prices rose 0.1 per cent, the first increase in four months. In the past year, the core index rose 0.8 per cent. That’s slightly higher than October’s 0.6 per cent annual increase, which was the lowest since the index began in 1957. Low prices are attracting consumers to stores and helping boost the economy. Retail sales in November rose 0.8 per cent — the fifth straight monthly gain. Consumer spending accounts for 70 per cent of economic activity. Manufacturing is the largest single component of industrial production. It has been a bright spot through most of the recovery. November’s report confirms that the sector remains strong. Output by auto factories fell unexpectedly. Excluding motor vehicles and parts, factory production jumped in October by 0.7 per cent. All other categories of long-lasting durable goods posted increases. Business equipment, construction supplies and business supplies each grew 0.9 per cent. More big-ticket consumer items rolled off assembly lines. Economist have worried that high unemployment and a weak housing market would stifle demand for goods such as home electronics, appliances and furniture. November’s gains in those areas could reassure them that a recovery in the consumer sector is under way. Production by utilities rose 1.9 per cent last month, while mines produced 0.1 per cent less. U.S. factories operated at 75.2 per cent of their capacity in November, up from 74.9 per cent in October.

NNeeww ‘‘‘OOttaarraa’’’ rraannggee ooff cceellleebbrriiittyy jjjeewweelllllleerryy

In its second year running, Sri Lanka's first ever celebrity jewellery line 'Otara' by Colombo Jewellery Stores presents yet another stunning line of contemporary jewellery. A great partnership between two of the country's most influential and desirable fashion brands, has seen this celebrity line of jewellery flourish in popularity and style. Otara Gunawardene and Colombo Jewellery Stores have come together yet again to present another striking and vivacious line of Jewellery for the fashion forward woman. Set in white and rose gold; dazzling diamonds, rubies, sapphires, garnets and topaz bring to life majestic pieces of art under five new collections. Rainforest, carousel, mock tails, sunset and ocean have been the inspiration for Otara's brilliant designs. Maintaining the signature 'O' in its styling, the collection features a myriad of color and contemporary styling; currently on display at Colombo Jewellery Stores at Alfred House Gardens, Crescat Boulevard and ODEL.

Otara has stood true to her essence of representing success and dreams coming true. CJS - a hallmark of excellence in quality and exquisite style, offers the modern woman an expression of her inimitable style and persona. Together, the line of Celebrity Jewellery offers you the best that life has on offer.

ODEL declares first dividend

Fashion retail brand ODEL has declared an interim dividend of 25 cents per share in respect of the company’s performance in the nine months ending 31st

December 2010, its first dividend since going public in July 2010. “The first three quarters of the year have been good for us and got a boost during the festive season; hence we would like to share the benefits with our shareholders,” ODEL Chief Financial Officer Nishan Fernando said in a statement. The company’s interim financial statements for the third quarter of 2010-11 are expected to be filed with the CSE shortly.

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SSttaattee IInnssttiiittuuttiiioonnss ttoo bbee rreennaammeedd ‘‘‘SSrriii LLaannkkaa’’’ ffrroomm ‘‘‘CCeeyyllloonn’’’

Ceylon gained independence in 1948 and changed its name to Sri Lanka when it became a republic in 1972. Over thirty-eight years have lapsed and still some state agencies, corporations and a few institutions in Sri Lanka use the prefix “Ceylon” and go by the name and style of “Ceylon”? This has prompted the Government of Sri Lanka (GOSL) to correct the situation and remove all remaining references to its British colonial name ‘Ceylon’ from state institutions. A few state institutions have continued to use the name ‘Ceylon’, and includes the country’s premier state owned banking institution - Bank of Ceylon, Ceylon Electricity Board, Ceylon Petroleum Corporation and Ceylon Fisheries Corporation to name a few. The Sri Lanka government released a statement late last month saying it will formulate legislation authorizing the change. With the government holding a large majority in Parliament, approval of suggested bills are considered a formality.

In accordance with the decision, GOSL decided to rename agencies, corporations and other entities coming under the Government of Sri Lanka (GOSL) to “Sri Lanka” from “Ceylon”. There are some state institutions still bearing the nation's former British Colonial name - Ceylon. Sri Lanka's Cabinet has taken the decision to make the change in the names of all public enterprises that begin as 'Ceylon'. The Cabinet has authorized the Ministry of Finance and Planning to take this matter with the Legal Draftsman and to prepare necessary legislation in a single Bill to change the names of all such Statutory Boards and public corporations. The government did not announce a date for the name change.

In ancient times, the island nation was called by a variety of names — with Greek geographers calling it Taprobane and Arabs referring to it as Serendib. The Portuguese, the island's first European colonial rulers, called it Ceilao. Ceylon is a transliteration of Ceilao made by the British when they took over control of the island in 1815. The name Ceylon is likely to remain in common use in the tea industry, where it is recognized in the international market for its quality. The Ceylon Tea label is unlikely to change, as the industry believes it's a brand of quality for the country's most famous export.

The two pics above may bring back memories especially to people who still remember the visit in 1954 by Queen Elizabeth and Prince Philip. Left: Queen Elizabeth II and Price Philip visited then-Ceylon in 1954 on a Commonwealth tour. Here they stand with the then Colombo Mayor T. Rudra and his wife at the Colombo Town Hall. Right: The scene in the Freedom Hall, Colombo, as Queen Elizabeth II, with Prince Philip, arrived to open the Parliament of Ceylon on their 1954 tour. The pillared hall, in the Kandyan style with open sides, was built as a memorial to Ceylon's independence. Ceylon’s Prime Minister Rt. Hon. Sir John Kotelawala is seen leading the way ahead of Queen Elizabeth and Prince Philip.

New Year’s Eve: Fireworks light up the sky near the Municipal Council in Colombo

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2011 started on an auspicious note for Sri Lanka Tourism and its stakeholders. The first few visitors to Sri Lanka in the early hours of New Year’s Day were in for a pleasant surprise. Arriving at Bandaranaike International Airport at Katunayaka they were welcomed by Deputy Minister of Economic Development Lakshman Yapa Abeywardena; Chairman, Sri Lanka Tourism Dr. Nalaka Godahewa and Acting Managing Director, Sri Lanka Tourism Promotion Bureau Malraj Kiriella along with other heads of the tourism and travel trade. The surprise welcome was an initiative of the Sri Lanka Tourism Promotions Bureau. With the dawn of peace in the country, tourism has become Sri Lanka’s most valuable commodity that could be traded round the world. Styling itself as “aggressive marketers” of an old product with a new twist, Sri Lanka Tourism trade including its minister, deputy minister and other stakeholders’ have joined together to win the tourists over by reaching out with innovative methods. For the sustenance of the tourism industry as a whole, it is academic that tourists are treated as “friends” and welcomed with open arms. Sri Lanka Tourism has just begun this new marketing approach that should stand the growing industry sector in good stead. With an ambitious target of achieiving 2.5 million visitors by 2016, Sri Lanka Tourism must come up with novel marketing strategies to reach this target.

Deputy Minister of Economic Development, Lakshman Yapa Abeywardana welcomed the first tourists to arrive in Sri Lanka for 2011 - Mike Yeoman and Clair Yeoman from Scotland. Upon arrival and after been welcomed the tourists experienced the vibrant sounds of traditional drummers and dancers who made a terrific impact with a breathtaking performance. They were then garlanded and offered surprise gifts. The incoming tourists were also invited to a typical buffet table of Sri Lankan sweetmeats with kiribath and kavum and also to light the traditional oil lamp on New Year’s Day. With all this fanfare, it is almost certain these tourists will come back to Sri Lanka many times over.

Tourism service providers to network Tourism will be the leading foreign exchange earner and within the next five years one out of seven in the country will be earning from the industry, said Deputy Minister of Tourism Lakshman Yapa Abeywardena. He was addressing a ceremony to launch the Sancharaka Udawa, the Tourism Products Meet Mart organised by the Sri Lanka Association of Inbound Tour Operators (SLAITO). He said the tourism industry has recorded an unprecedented growth and it has the potential to be the main revenue earner in the country. Hotel occupancy has recorded a remarkable growth due to the large influx of tourists to the country. "The 2011 Visit Sri Lanka campaign is expected to have a major impact on Sri Lanka tourism. An event a month and a host of activities to captivate the discerning traveller have been lined up for the mega promotion", Abeywardena said. "The remaining sites of the Kalpitiya Tourism Promotion Zone have been leased to investors and the location will be ready for tourism soon", he said. The tourism industry is the main beneficiary of the peace dividends with a 45 percent growth in arrivals this year compared to last year. Improvement of roads, resumption of sea planes, increase in the number of hotel rooms, logistics and trained personnel will help achieve the tourism targets.

Chairman, Sri Lanka Tourism, Dr. Nalaka Godahewa said the benefits of tourism should be shared by all, for which there should be a collective effort to develop the industry. He said even a winsome smile will carry a long way in enticing visitors. Cottage industries and the village community could help promote tourism in a responsible way. "The tourism industry must be focused on providing the best service if it is to reach the target of attracting 2.5 million visitors by 2016. The duration of stay and the spending of tourists have to increase for tourism to bloom", Dr. Godahewa said. The SLAITO Meet Mart which will be held on January 27 will provide an opportunity for all tourism related service providers to network and promote products and services. This year, Sri Lanka Tourism Promotions Bureau (SLTPB) will be offering surprise packages to the 250,000th, 500,000th, 600,000th and 700,000th tourist that arrives in the island to mark ‘Refreshingly Sri Lanka Visit 2011’. All future promotional activities and events are planned for the next couple of years with the goal of achieving a target of 2.5 million tourists. After achieving the milestone of over 600,000 tourists this year, Sri Lanka is preparing for a target of over 700,000 arrivals in 2011. A record 725, 000 tourists are due to arrive in Sri Lanka this year, designated ‘Visit Sri Lanka 2011’, to savour its natural beauty and the hospitality of the people. Sri Lanka Tourism is set to conquer the target of 700,000 tourists in 2011. Sri Lanka was hitherto known as a beach destination catering the needs of ‘sun and sand’ tourists. However with the events planned for year 2011 and the products created surrounding the events and themes, the intention is to highlight the various products that could cater to different market segments for tourists the world over. Sri Lanka now has a diverse range of tourism attractions to cater to a multitude of tourists coming from the European Union, South Asia, North America, China, Malaysia, Australia, and the Middle East.

Sea planes, air taxies a beautiful solution, says tourism Chairman Introducing sea planes and air taxies was of utmost importance if Sri Lanka wants to attract high- spending tourists, a senior official of Sri Lanka Tourism said. The government is hoping to attract high- end tourism and is urging the industry to focus of quality, not quantity. It is also considering introducing a green tax on tourists visiting the island. Sri Lanka Tourist Board Chairman Dr. Nalaka Godahewa said that he believed introducing sea plane services was something essential for development, targeting high- end tourism. He said the government was not worried about the quantity but the quality. To get quality tourists the country has to have new productions and innovations. "Sri Lanka is heading for good times with tourist arrivals increasing 45 percent to 650,000 in 2010. The US came in second with an increase of 28 percent in tourist arrivals last year," he said.

Dr. Godahewa said achieving the target of 2.5 million tourists in 2016 was not a huge task when considering that unlike countries such as Malaysia and Thailand, that attract tourists in larger numbers, Sri Lanka’s target group was high spending tourists. "The rich clientele have no time to drag about and waste time and sea planes and air taxis are better options. It is a beautiful solution," he added. Dr. Godahewa said that apart from the national carrier SriLankan, other airlines too could get licenses to operate sea planes and air taxies. Responding to a query from The Island Financial Review, he said the government was considering introducing a green tax for tourists.

A sign of the fact that Indian government has seen the immense potential in Tourism is visible with the first seaplane taking flight in India, a thought which was a far cry till now. Civil Aviation Minister Praful Patel launched seaplane operations last year in December in Andaman and Nicobar. It will be operationalised in Andaman and Nicobar Islands as per MoU signed between Andaman and Nicobar Administration and Pawan Hans Helicopters Limited (PHHL). This is the first time that seaplane operations are being introduced in India. The service will be provided with a Cessna 208A (capacity 2+8 passengers) Amphibian seaplane. The operation of seaplane is a scheme approved by Government of India for Andaman and Nicobar Islands to provide impetus to tourism infrastructure in the island. The operations will be on a 50/50 profit and loss sharing basis between Pawan Hans Limited and Andaman and Nicobar Administration. This seaplane service will connect Port Blair with Havelock island and subsequently other islands in North Andaman to promote tourism. In Port Blair the seaplane is proposed to operate from the airport and in Havelock and Diglipur in the identified waterdrome. To facilitate safe operations, facilities for ferrying passengers from the shore to the pontoons, sanitization of the waterdrome before takeoff and landing, speed boat of ten (10) passenger capacity and one stand-by boat (inflatable Gemini boat) and one floating jetty (pontoon) each in the above locations have been placed. The seaplane operations are being introduced as a major tourist attraction. Seaplanes will also be introduced in other areas of India such as Lakshadweep, Goa, Odisha, etc. Government of India has allowed 100 per cent FDI in this sector.

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NNeeww SSrriii LLaannkkaa TToouurriiissmm lllooggoo Sri Lanka Tourism launched ‘Visit Sri Lanka 2011’ with 12 theme events spread across the year. Twelve themes will be promoted during each month of 2011, symbolizing the 12 letters in the “Wonder of Asia”. These 12 themes include beaches, sports and adventure, MICE, people & culture, religious tourism, weddings & honeymoons, body & mind wellness, heritage, nature & wildlife, community & education, culinary and shopping & entertainment. Sri Lanka Tourism’s aim with the campaign is also to the get the involvement and the support of the domestic market and to develop these products by the end of the year. With the help of the locals, the idea is to create a safe and beautiful environment for visiting tourists. It is imperative that the locals cooperate with the tourism authorities to ensure a clean environment is maintained in tourist areas and also to be free from security issues. At a well attended World Travel Market (WTM) press conference held recently, Sri Lanka Tourism Chairman Dr. Nalaka Godahewa launched the Sri Lanka tourism campaign and its new logo. The theme focus was 'having eight wonderful experiences in just eight days'. The eight different colours of the letters in 'Sri Lanka' in the logo represent the following eight areas:

 Pristine;  Beach Wild;  Wildlife and nature Thrills; Sports and soft adventure Scenic;  Tea and hill country Heritage;  2500 years of civilization and eight UNESCO sites Bliss;  Ayurveda and upmarket boutiques for those chilling out Essence;  Authenticity of people, eco- tourism, culture, the arts, shopping Festive;  Entertainment - festivals and events and a unique place for weddings and honeymoons.

Deputy Minister joins in Beach Conservation Day The Month of January is for "Pristine Beaches of Sri Lanka" and the first programme of the month was a ‘Beach Conservation Day’ conducted covering popular beach destinations of the island. The main event was held at Wadduwa beach with the participation of Hon. Lakshman Yapa Abeywardena – Dy. Minister of Economic Development, Dr. Nalaka Godahewa - Chairman Sri Lanka Tourism, Malraj Kiriella - Acting Managing Director, Sri Lanka Tourism Promotion Bureau, Anura Lokuhetty - President, Tourist Hoteliers Association of Sri Lanka. During the month similar programmes were conducted in Bentota, Hikkaduwa, Negombo,Trincomalee, ArugamBay and many other beach destinations in the island. Foreign and local tourists, tourism stakeholders along the sea side hotels and enterprises, environmentalists, school children and interested general public actively participated in this programmes conducted island wide. The Beach Conservation Day is to create awareness that greater focus has shifted to keeping the L to R: Malraj Kiriella-SLTB; Anura Lokuhetty, Tourist environment clean for the greater good of tourism. Hoteliers Assn; Dy. Minister of E conom ic Dev. L a ks hman Tourism gears for February influx Yapa Abeywardana, and Dr.Nalaka Godahewa, Chairman Sri Lanka Tourism "The event a month program next year will thrill visitors with some of the finest entertainment under twelve themes throughout the year", he said. Beaches, sports and adventure, conferences, people and culture, religious, weddings and honeymoons, body and mind wellness, heritage, nature and wildlife, community tourism, culinary and shopping are some of the themes for the promotion of tourism. Kiriella said February has been dedicated to sports and adventure to coincide with the Cricket World Cup. Hambantota has been selected as the venue to host some of the matches. He said special air packages will be introduced to facilitate travel of domestic and foreign visitors. Air Force helitours will operate during the season. "Sri Lanka Tourism has planned to set up tented camps for visitors during the month", Kiriella said.

In keeping with the tourism campaign theme, “Visit Sri Lanka 2011’, Sri Lanka Tourism targets 700,000 tourists and a revenue of US$ 500 million in 2011. Acting Managing Director, Sri Lanka Tourism Promotion Bureau, Malraj B. Kiriella said tourist arrivals this year recorded a 45 percent month-on-month growth compared to last year. A 31 percent growth was recorded in January and 63 percent in November this year against last year. There has been a significant growth in arrivals from all major markets from North America, Western and Eastern Europe, Africa, Middle East, East Asia, South Asia and Australia.

"The tourism industry hopes to build around 1,500 rooms next year under the long-term strategic plan to attract 2.5 million visitors by 2016", Kiriella said. The tourism industry plans to increase the number of hotel rooms to around 40,000 from the current 14,000 rooms. Hotels are being built in the East coast and more locations have been identified for construction. Kiriella said tourists arrivals this year would be around 620,000 the highest since 2004 which recorded around 570,000. The Visit Sri Lanka campaign will help attract the high end tourists to the country. "Sri Lanka Tourism is targetting the high end sector of tourists who spend more on a longer holiday", Kiriella said. The earnings from a tourist per night has increased to US$ 80 from US$ 50 which is a significant growth in the revenue from the tourism sector.

FFiiirrsstt pphhaassee ooff KKaalllppiiittiiiyyaa TToouurriiissmm PPrroojjjeecctt ttoo ccoosstt oovveerr UUSS$$ 44 bbiiilllllliiioonn

Work on three of the 17 islands, earmarked for the Kaplpitiya Integrated Tourism Resort Project, has begun and bidding was open for the others, Deputy Economic Minister Lakshman Yapa Abeywardena said. Speaking during the launch of the Cocoon Resort & Villas Website, at Ceylon Continental Hotel last week, he said that applications from prospective investors seeking to lease the islands from private companies, have been forwarded to the Cabinet of ministers for approval. "Kalpitiya will be developed into a tourist zone, similar to the ones found in Bali and the Maldives. The lease agreements would range between 30 to 40 years, depending on the quantum of capital invested." Yapa said that the first phase of the project, estimated to cost over US$ 4 billion, would be carried out by the private sector, while the government will facilitate infrastructure development of the islands.

"We are targetting a figure of 700,000 tourist arrivals in 2011. For this year, the 600,000 mark has already been crossed. We hope to attract 2.5 million tourists by 2016."With the demand for hotel rooms increasing throughout the country, institutions such as Cocoon Resort and Villas situated at Kaikawala in Induruwa, were helping to ease the pressure, he said. Yapa said that U. K. Sharma, who had given a facelift to Sri Lanka’s first five star city hotel ‘Ceylon Continental Colombo’, has this time round captured the opportunity in transforming Cocoon Resort and Villas, spead over eight and a half acres, into the most luxurious Boutiue Resort, whilst preserving old heritage and nostalgia, combined with pleasure of serenity in exquisite surroundings. Director General of Investment and Tourism Saj U Mendis said that with the end of a near 30-year war, the sky was the limit for Sri Lanka. Cocoon Resort and Villas, by establishing a unique and luxurious resort, was actually helping the government to promote tourism, he said. Sandesh Sharma, the President of Cocoon Resort and Villas, said that his father and Chairman U. K. Sharma, ably assisted by his staff, had gone into every minute detail in producing a dream of a Resort, which consists of three Grand Villas with private plunge pools equipped with Massage Jets, eight Premier Villas with Private Jacuzzies and 16 lavish "Silk" rooms with Jacuzzies in the bathrooms and having large terrraces and balconies. "The Stage is where cultural performances will be conducted in promoting our national dance culture," he said. "The Private beach which is a stone’s throw away from the main Resort, offers an exclusive escape, where one can walk on truly pristine, unadulterated, golden sands or swim in sparkling turquoise waves or relax under the swaying palm trees."

TToouurriiissmm gguuiiiddeellliiinneess ttoo bbee rreevvaammppeedd

The government is to introduce new tourist guidelines for those visiting Sri Lanka from next year especially regarding their conduct and a dress code when they are outside of designated tourist zones. Culture and Aesthetic Affairs Minister T B Ekanayake told News Now.lk that the dress code will look at ensuring that tourists respect the local culture and traditions when visiting certain places. He said that the matter is still under discussion and a final decision will be reached once he obtains a proposal from the relevant institutions regarding the attire worn by tourists.While tourists are likely to be permitted to wear certain attire in the beach within tourists zones such attire will not be permitted on the streets or public places. The government had recently announced that a dress code will also be introduced for people visiting places of worship.

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EEssnnaa VViiillllllaass SSLLIIICC ttoo bbuuiiillldd aa ffiiivvee--ssttaarr hhootteelll iiinn HHaammbbaannttoottaa

ttoo bbuuiiillldd Dec 30, Colombo: State-owned Sri Lanka Insurance Corporation (SLIC) has announced that it will construct a five-star hotel in llluuxxuurryy Hambantota in the South. The construction will begin next year and the hotel will be operational by 2013, the bboouuttiiiqquuee Managing Director of SLIC Mohan De Alwis said. He says that the hotel is an investment of Rs. 3 to 4 billion hhootteelll iiinn funded entirely by the SLIC. The 200-room hotel will be run by Sri Lanka Insurance Resorts and Spa Private NNiiilllaavveellliii Limited, a subsidiary of SLIC. Sri Lanka Insurance Esna Villas, a company fully owned by Esna Holdings, has invested in a beach Corporation is also currently looking for a suitable property on Nilaveli beach, Trincomalee with a 144 feet beach frontage. This internationally well known partner to help them manage and market the hotel, project, which is valued at USD 1 million, is the company's first foray into the reports say. The hotel is the first 'star class' leisure facility to come up in leisure sector. The company plans to set up an "all suite" boutique hotel on Hambantota and it is located close to the Peacock Beach. the property with construction already being in progress. Eshana De Silva, Chairman, Esna Holdings, observed that this project includes a "Presidential Villa" which has a private swimming pool with all the luxury amenities of a SSrriii LLaannkkaa TTaajjj oowwnneerrss mmaayy bbuuiiillldd aannootthheerr hhootteelll Five-Star property. We are very excited as this would be the only project of this The Indian Hotels Company Limited (IHCL) kind in Trincomalee. Sri Lanka has seen a massive influx of tourists after the and its subsidiaries are collectively known as much anticipated post-war tourism boom. Esna Villas plans to set up similar Taj Hotels Resorts and Palaces and are boutique hotels in other prime tourist locations around the Island. recognized as one of Asia's largest and finest hotel company. Incorporated by the founder of JJeettwwiiinngg SSeeaasshheellllllss rree--ooppeennss aass JJeettwwiiinngg SSeeaa iiinn the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj NNeeggoommbboo Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. Jetwing Seashells, located

in Negombo re-opened Taj Hotels Resorts and Palaces comprises 66 recently as Jetwing Sea. hotels in 42 locations across India with an The Jetwing Hotels additional 16 international hotels in the Maldives, Malaysia, Australia, UK, USA, Chairman Hiran Cooray Bhutan, Sri Lanka, Africa and the Middle East. Investors connected to Taj said, "It is a significant Samudra Hotel in Sri Lanka's capital Colombo may build another hotel in the achievement and one that same premises, Economic Development Minister Basil Rajapaksa said. The Taj epitomizes the Jetwing Samudra hotel is controlled by Taj Asia, a joint venture between India's Tata promise of delivering and Cinnovation, a firm owned by Nepali entrepreneur Binod Chaudhary. The Minister Basil Rajapaksa examining one of the rooms highest quality and hotel is operated by Taj Resorts. Rajapaksa said Taj may build another hotel in in the Jetwing Sea while Jetwing Hotels Chairman excellence in everything the same premises after meeting Chaudhary who is currently visiting Colombo Hiran Cooray and Pushpa Rajapaksa look on. Pix: we do. We shall continue to open a re-built hotel belonging to Sri Lanka's Jetwing group. Chaudhary's Chaminda Hittatiya to strive, reach higher and Cinnovation has stakes in Jetwing hotels. Taj Samudra is located by the 'Galle bring you the best in service and standards that has become our very hallmark." Face' beachfront in Colombo. The beach front is to get two new hotels from The chief guest at the occasion was Economic Development Minister Basil Hong Kong based Shangri La group and a Chinese state aviation firm. Sri Lanka Rajapaksa, and the guest of honour was External Affairs Minister Prof G L Peiris. is going through a tourism boom after the end of a 30-year war in May 2009. In Jetwing Sea General Manager Rookmani Fernando said, "Our name speaks for 2010 arrivals were up 46 percent. Room rates are rising around the country itself. We are blessed with a pristine beachfront and close proximity to the and occupancy in hotels are also high. The Taj group said late last year that the ocean, with gentle waves literally swirling at our doorstep, allowing guests to existing 5-star Taj Samudra may go through a 60 million US dollar upgrade. enjoy a unique experience." The newly revamped Jetwing Sea is one of the four The group manages a 4-star hotel near Sri Lanka's main international airport Jetwing properties situated in Negombo. It is neighboured by Jetwing Beach - a and also has a beach resort in the Southwest coast. landmark Bawa creation and a member of the Small Luxury Hotels of the world and the soon to be launched Jetwing Blue - formerly Jetwing Blue Oceanic, the Another Chiinese company to buiilld a hotell very first Jetwing venture. The purpose built Ayurveda spa hotel, Jetwing Another Chinese company to build a hotel Ayurveda Pavilions is also located nearby. With such a strong presence in the ccoommppllleexx iiinn SSrriii LLaannkkaa ccaappiiittaalll area, Jetwing is well at the forefront of setting the stage for Negombo to become the quality resort hub in Sri Lanka. Jetwing Sea offers resort accommodation at 28 standard rooms, 53 spacious deluxe rooms and two chic The Government of Sri Lanka (GOSL) has suites offering elegantly designed luxurious living spaces with king sized beds decided to proceed with a proposal from Chinese and a new and improved ambience. company to build another luxury hotel and shopping complex in the heart of the Sri Lankan capital. China National Aero Technology Import and Export Corporation (CATIC) intends to purchase land around Galle Face Green area to build a multifunctional complex comprising a five star hotel and a shopping mall with direct investment of nearly US $500 million, the government announced Thursday. The Cabinet of ministers Wednesday has approved the proposal submitted by the Minister of Economic Development, Basil Rajapaksa to build the Skyline Hotel and Rainbow Multifunctional Complex in the city. Earlier Hong Kong-based Shangri-La Hotels entered into an agreement with the government to invest US$ 500 million to build a 500-room luxury hotel- shopping complex in the same area. The project is to be completed by 2013. The government says the proposed projects will assist developing Colombo as a Middle Income Commercial City and also to accommodate nearly 2.5 million tourists expected by 2016.

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UUNNIIIVVEERRSSIIITTYY DDOONNSS RREECCOOGGNNIIISSEEDD

Six outstanding academic staffers in the Sri Lankan University system were recognized by the Government for their accomplishment and contribution. The awards were given away at the third awards of Committee of Vice Chancellors and Director of Sri Lanka (CVCD) at the Presidential Secretariat yesterday (16), for those who showed exemplary performances and made remarkable achievements in the fields of Health Science, Technology, Biological sciences, Physical Sciences, Humanities and Social Sciences.

President Mahinda Rajapaksa awarded CVCD awards to the six outstanding performers at the awards ceremony was organized by CVCD. The organization was established in 1979 under the Universities Act as an advisory body to the University Grants Commission. It comprises 17 Vice Chancellors of State universities and three rectors of university campuses. Ruhuna University Senior Lecturer Dr Manjula Deshapriya Hettiarachchi received the award for the most outstanding young researcher. Professor N T Sohan Wijesekera of Moratuwa University, Prof M J S Wijeratne of Kelaniya University, Prof MAKL Dissanayake of Peradeniya University and Prof Mahinda Wijeratne of Ruhuna University received awards for Most Outstanding researchers at the awards ceremony. Prof S A M Kularatne of the Peradeniya University also received awards for his contribution in the field of medicine. Higher Education Minister S B Dissanayake, CVCD Chairman and Kelaniya University Vice Chancellor Prof. Sarath Amunugama and University Grants Commission Chairman Prof. Gamini Samaranayake were present.

WWEEDDDDIIINNGG BBEELLLLSS FFOORR SSRRIII LLAANNKKAA CCRRIIICCKKEETTEERR AAJJAANNTTHHAA MMEENNDDIIISS && HHIIISS BBRRIIIDDEE YYOOSSHHIIINNIII President Mahinda Rajapaksa and His Eminence Rev Fr. Malcolm Cardinal Ranjith congratulate Sri Lanka Cricketer Ajantha Mendis and his new bride Yoshini de Silva on their marriage at St. Theresa’s Cathedral at Thimbirigasyaya on January 06. Army Commander Lt. Gen. Jagath Jayasooriya, Inspector General of Police Mahinda Balasuriya were also among the invitees. (Pic by Chandana Perera)

Born in 1985, Sri Lankan Spinner Ajantha Mendis started his international career in 2008, playing against West Indies where he captured 3 for 39. He is an officer in the Sri Lanka Army. He came into cricketing prominence owing to his mysterious deliveries which bamboozled many of the opposition batsmen. The Carrom Ball which he releases with a flick of his middle finger gained much attention.

BBAANNDDUULLAA JJAAYYAASSEEKKAARRAA –– DDIIIRREECCTTOORR GGEENNEERRAALL,,, PPRREESSIIIDDEENNTT'''SS MMEEDDIIIAA UUNNIIITT

BANDULA JAYASEKARA assumed duties recently as Director General, President's Office Media Unit. A product of Trinity College, Kandy, he had previously served with distinction as Sri Lanka's Consul General in Toronto, Canada and Sri Lanka's Deputy Permanent Representative to the United Nations in New York. He also served as Editor-in-Chief of the Ceylon Daily News from 2005 to mid-2007. In this position, he led a vociferous campaign against terrorism and initiated a media campaign to support the Security Forces in the battle against terrorism. Mr. Jayasekara functioned earlier as Director General (Public Communication) at the Ministry of External Affairs (formerly Ministry of Foreign Affairs). It is likely that this vacancy will now be filled by another high achiever Ravinatha Aryasinha who will be returning to Sri Lanka after completing his term in office as Sri Lanka’s Ambassador to Belgium, Luxembourg and the European Union. It is widely accepted that Mr. Aryasinha would an ideal choice for this job with his extensive media experience coupled with international exposure.

Editor’s Note: As Consul General for Sri Lanka in Toronto, Bandula Jayasekara’s two-year stint here can be called “monumental” in that he was in the right place at the wrong time (2008-2010). The Civil War in Sri Lanka had reached its peak and Toronto was a hotbed of restless activity. Canada embraces the second largest Sri Lankan Diaspora after the United Kingdom, estimated to be around 175,000 - 200,000. Here was a time when sympathizers of the LTTE in Canada were active in lobbying politician’s at all three levels of government (Federal, Provincial and Municipal) and had earned a reputation for organizing demonstrations at the drop of a pin. With this backdrop, Mr. Jayasekara assumed duties in Toronto. He faced the challenges courageously and asked for no quarter and gave no quarter as he dealt effectively with the militant section of the Sri Lankan Diaspora in Canada and even took on the politicians head-on. He was a man on a mission – to serve his beloved country to the best of his ability and nothing else mattered. He made an instant impact with his presence upon arrival in Toronto. Therefore, it is no surprise to the Sri Lankan expatriate community in Canada that within such a short period in time, he has been rewarded with an appointment to the highest media position in the country – President’s Office Media Unit. The editorial staff of TradeWinds e-Magazine joins me in saluting Mr. Jayasekera and wish him well as he embarks on one of the biggest challenges in his life. A true patriot with a proven track record he has earned a reputation as a dedicated and committed officer of the Government of Sri Lanka (GOSL). He believes in rolling down his sleeves and getting the job done. Sri Lanka needs people like him to guide its destiny over the next few decades. In the context of a Cricket team, he is a Captain’s dream all-rounder who gives his 100% on the field and performs well with the bat, ball and fielding. We wish him well!

RROOHHIIITT KKHHOOSSLLAA –– NNEEWW AARREEAA DDIIIRREECCTTOORR,,, SSRRIII LLAANNKKAA TTAAJJ HHOOTTEELLSS The Taj Group recently appointed Rohit Khosla as its new Area Director for Taj Hotels in Sri Lanka. Excited to be in Sri Lanka with the country poised for a new deveopment phase, Mr Khosla said: “With the war clearly over and replaced with the euphoria of the islands great tourism potential, there couldn’t a better place to be than Sri Lanka at this point of time. The industry will experience unprecedented growth”. The challenge now, he believes is to make a significant impact on existing standards in the industry – standards he is certain can be developed into global hospitality benchmarks. Mr Khosla has over 22 years of experience including other global hotel chains and in the last decade with the Taj Group. “Sri Lanka’s palm fringed beaches, treasured heritage, exotic landscape and wildlife are not the only traits she is known for – it is her warm and gracious people that keep our travellers returning,” he said. To date, the Taj Group remains the only international chain with three properties in the island -- Taj Samudra, Colombo; Taj Exotica, Bentota and Taj Airport Garden, Seeduwa. Taj Asia Ltd also operates two properties in the Maldive Islands – the award winning Taj Exotica, Maldives and Vivanta by Taj, Coral Reef.

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Rear Admiral D.W.A.S. (Somathilake) Dissanayake is Sri Lanka’s new Navy Chief as of January 15. He will succeed Admiral Thisara Samarasinghe. Rear Admiral Dissanayake will be the 17 Commander of the Sri Lanka Navy.

Vice Admiral Dissanayake joined the Sri Lanka Navy as an Officer Cadet on 1st June 1977 and successfully completed his basic training at the renowned Naval and Maritime Academy in Trincomalee before attending the Sub Lieutenant Technical Course in India. As a young officer, he also attended the International Warfare Course of the British Royal Navy in the United Kingdom. During his over 33 years unblemished carrier in the SLN has served in many command positions, including the Northern Area Commander. Rear Admiral Dissanayake is the recipient of the highest number of medals and decorative badges including "Weerodara Vibushana". The New Navy Commander Vice Admiral D. W. A. S. (Somathilake) Dissanayake assumed duties at the Navy Headquarters on January 15. Pix: Gayan Amarasekara

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The National Chamber of Exporters of Sri Lanka (NCE) held its 16th Annual General Meeting on Friday, 26 November 2010 at Hotel Taj Samudra, Colombo. The Chief Guest was Dr. Koshy Mathai, International Monetary Fund (IMF) Resident Representative Sri Lanka and the Maldives. In addressing the gathering he stated that Sri Lanka now is a middle income country, but it should become a richer middle income country. In order to develop he stated that the country should have a stable policy climate, favourable macroeconomic condition and high literacy rate means knowledge workers, good managers, CEOs NCE President Sarath De Silva addresses the Annual General Meeting. Others from left are Mangala and other people who think out of the box. He also stated that a Yapa - Vice President, Jagath Peiris - Vice President, Patrick Amarasinghe - Founder President, Chief quality University system can generate these people. Developing Guest Dr. Koshy Mathai, International Monetary Fund (IMF) Resident Representative Sri Lanka and human capital is enabling the modern and long term growth in a the Maldives Rohan Fernando - Immediate Past President, Ms Diruni Chanmugam - Hony. Secretary, country. He was quite optimistic of the Government's decision to and Rasa Weerasingham - Executive Director have private universities in the country.

The NCE President, Sarath de Silva was unanimously re-elected as the President. In his address, he highlighted the very business friendly proposals presented by the H.E. the President, some of which are outlined below. Among them we should appreciate the fact that the President urged the Shipping lines to remove the anti-competitive practices, such as the terminal handing charges and other burdens on the exporters and importers within the next 100 days. A request to the banks to reduce the interest rates further, so that the local companies could invest further and expand their businesses. Special emphasis on SME's Impressive achievements of Sri Lanka and targeted per capita income of USD4000 by the year 2016. Increased private investments from the present level of 21% of the GDP to 28% over the next six years. Targeted 8-10% growth in the GDP in future.

The following were elected to the Management Committee for the year 2011: President: Sarath de Silva; Founding President: Patrick Amarasinghe; Immediate Past President: Rohan Fernando; Past President: D K Rajapaksa; Vice Presidents: Jagath Peiris & Mangala P. B. Yapa; Hony. Secretary: Diruni Chanmugam; Treasurer: Haris Guruge; Council Members: Sarada M. de Silva and Ramal Jasinghe.

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SSRRIII LLAANNKKAANN AAMMEERRIIICCAANN EELLEECCTTEEDD UUSS DDIIISSTTRRIIICCTT CCOOUURRTT JJUUDDGGEE IIINN UUSSAA

On November 2, 2010 Roy Wijewickrama becomes the first Sri Lankan American to be elected District Court Judge by popular vote in the 30th Judicial District of North Carolina, USA. According to the NC State Board of Elections Roy defeated Stephen Ellis by more than 4,000 votes. He garnered 53.88% of the vote. Roy won all seven counties in the district. Roy was sworn in as a Judge on January 1, 2011, and assumed duties immediately thereafter. He took oath of Judge in the Haywood County Superior Court in Waynesville, North Carolina. Roy served as Assistant District Attorney (Crown counsel) for the 30th Judicial District in the State of North Carolina from September 2001 until August 2007. During this period, he prosecuted a multitude of cases in all seven counties, including criminal cases from murder and rape cases to child sex abuse cases. These included hundreds of jury trials and bench trials. In addition he served as a board member for the County’s Child Abuse Advocacy Centre. He led multidisciplinary teams with numerous agencies including law enforcement, Department of Social Services, and the District Attorney’s Office. Thereafter, he worked as a partner in the Waynesville, NC, law firm, Kerstien, Davis & Wijewickrama for a period of one year. While in private practice, he focused on both criminal and civil litigation, handling cases in State, Federal and Tribal courts. In 2008, he was appointed as Tribal Prosecutor for the Eastern Band of Cherokee Indians. During this time he was responsible for prosecuting crimes occurring in the Cherokee Indian Reservation. Since he was appointed to this post, the number of convictions leading to active jail time, increased dramatically.

Roy is a 1993 graduate of Tuscola High School in Waynesville, NC, USA. He received a BA in Political Science from North Carolina State University in Raleigh, NC and a Juris Doctor, JD degree from Cleveland State University’s Cleveland-Marshall College of Law. He is married to Jodi O’Neil and resides in Waynesville, NC with his wife and two daughters. Roy is the son of Chandra and Ramanee Wijewickrama of Panadura and Makola, Sri Lanka. They immigrated to NC, USA in 1964 from Sri Lanka. Roy has two brothers, David Wijewickrama, an Attorney-at-Law in private practice in Waynesville, North Carolina and the other Rohan Wijewickrama an ENT Surgeon, working in Buffalo, New York.

CCHHIIINNEESSEE DDEELLEEGGAATTIIIOONN VVIIISSIIITTSS FFCCCCIIISSLL January 7, 2011, 6:43 pm

At the Invitation of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) a delegation led by Yao Yunxiang, Vice Chairman – China Council for the Promotion of International Trade (CCPIT) Yunnan Sub-Council, China made a visit to Sri Lanka and had a meeting with Tissa Jayaweera, President, Board Members and senior officials of the FCCISL. During this meeting a Memorandum of Understanding for Friendly Corporation was also signed to strengthen friendly relationship and corporation in economic, trade and investment, based on the principles of friendliness, equality and mutual benefit between China – South Asia Business Council (CSABC) and the FCCISL.

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SLASSCOM acts as the catalyst of growth for the Sri Lankan IT and BPO industry by facilitating trade and business, propagation of education and employment, encouragement of research and innovation, and by supporting the creation of a progressive national policy framework. The IT and BPO industry is projected to grow by 26% with export earnings estimated at US$ 390 million for 2010. Mass employment generation with more foreign direct income is being targeted by the national IT/ BPO chamber. Sri Lanka plans on building a niche focus on a few core areas in the IT and BPO industries globally to differentiate the countries offerings with other outsourcing destinations and with a vision to make the IT/ BPO industry the number one export earner for the country. SLASSCOM elected its third Board and General Council consisting of key industry leaders and decision makers to drive this vision for 2011. SLASSCOM ELECTS NEW BOARD FOR 2011

Seated (From Left) Jehan Perimpanayagam- Dir e ctor and Treasurer (CEO, Info Mate (Pvt) Ltd) ,Madu Ratnayake - Director and Vice President ( GM, Virtusa), Dinesh Saparamadu – Chairman (CEO, hSehid) , Mano Sekaram - Director & General Secretary (CEO, Eurocenter), Sujiva Dewaraja - Director and Vice President (EVP/Head of IT Sector, John Keels Holdings)

Standing (From Left) Nalina Wijesundara - Director(Director & GM, eCollege Lanka (Pvt) Ltd), Ashique M. Ali – Director (CEO, Talliance) , Sanath Fernando - Director (CEO, Ridgecrest Asia (Pvt) Ltd), Sandra De Zoysa –Director (Group Chief Customer Officer, Dialog Telekom PLC), Mark Webster- Director (Centre Manager, HSBC Technology and Services - Service Delivery), Jayantha De Silva – Director (VP South Asia and Managing Director Sri Lanka, IFS) , Jit Seneviratne – Director (Director, Millennium Information Technologies Limited)

CHRISTMAS IN TORONTO – Palitha and Pushpa Collure are long standing Toronto residents. The couple, with their two daughters are credited for this spectacle captured in the two pics. The grandeur of strings of Christmas lights adorned the outside of their Toronto home and ran along the rafters, roof lines, garage and porch railings. One of the most enchanting sights to behold during the Christmas season is the beauty of the Christmas lights and the Collure house certainly displayed this in abundance.

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WWOORRLLDD BBAANNKK:: SSRRII LLAANNKKAA’’’SS EELLIIGGIIBBIILLIITTYY FFOORR IIBBRRDD FFIINNAANNCCIINNGG Courtesy: World Bank

Colombo, December 17, 2010 –World Bank Managing Director, Dr. Ngozi Okonjo-Iweala today announced moves which could pave the way for Sri Lanka to receive increased support from the development institution. The move came after Dr. Okonjo- Iweala met President Rajapaksa, Central Bank Governor Nivard Cabraal, along with other senior officials and spoke at the Central Bank’s 60th anniversary commemorations, during which the Managing Director reaffirmed the World Bank’s strong and expanding support to Sri Lanka as it transitions towards a middle-income country in lasting peace. In recognition of the country’s emergence as a growing economy, Dr. Okonjo-Iweala announced Sri Lanka’s new eligibility for financing from the IBRD, the World Bank’s lending arm for middle-i n c o m e countries in addition to the current assistance from the IDA. This development has the potential to more than double the amount of resources available to Sri Lanka every year, currently close to $200 million annually from IDA.

“Sri Lanka’s remarkable rise from past challenges is a testament to the tenacity of the Sri Lankan people and the commitment of the country’s leadership,” said Dr. Okonjo-Iweala. “Eligibility for IBRD borrowing is an important recognition of Sri Lanka’s middle income country status and signals an important step in the evolution of our relationship going forward – a relationship that is founded on knowledge and experience- sharing that complements the available financing.”

Conveying the news on IBRD financing to President Rajapaksa, Dr. Okonjo-Iweala reiterated the World Bank’s commitment to Sri Lanka, especially in supporting programs designed to encourage inclusive growth throughout the country. She also noted the World Bank’s willingness to increase support to complement the ambitious development aspirations of doubling per capita income and growth in excess of 8%, which will be aided by increasing private investment from both foreign and domestic sources as envisioned in the Mahinda Chintana, the Government’s vision for future development. President Rajapaksa conveyed his appreciation to the World Bank for providing support to complement the country’s development goals and noted that he looks forward to working with the Bank on the implementation of the Mahinda Chintana.

In her speech to the Central Bank, Dr. Okonjo-Iweala also emphasized the importance of investment and innovation towards development and exchanged ideas from global perspectives that could help Sri Lanka reach its full potential as a growing middle income country. “The expansion of the knowledge economy and the search for innovative ideas by all Sri Lankans will be important to successfully accelerate growth and improve living standards,” she said. Dr. Okonjo-Iweala also stressed that in order to foster the economic well-being of all Sri Lankans, the ultimate recipe for growth must be unique to the country and that it would be expected to share its accumulated expertise with others in South Asia. “The World Bank can play complementary role in facilitating this process by sharing not only our own knowledge, but also the expertise of other emerging economies through South-South exchanges,” she said. Dr. Okonjo-Iweala will visited World Bank supported projects in Eastern Sri Lanka tomorrow aimed at increasing opportunities and improving livelihoods. Her stops include projects assisting with higher education, employment generation for vulnerable groups, small and micro enterprise development and increasing computer use and literacy.

Since the World Bank Group’s first development credit to Sri Lanka for the Aberdeen–Laksapana Power Project in 1954, the institution has become one of Sri Lanka’s largest development partners. It has worked closely to support the country’s progress in infrastructure, education, health, and environmental protection. It is currently supporting the implementation of 17 projects totaling $1.25 billion in assistance aimed at maximizing impact and results.

EExxppeerrttss ssaayy UUAAEE eeccoonnoommyy ppooiiisseedd ttoo ssttrreennggtthheenn iiinn 22001111 Economists foresee a rosier economic outlook next year as the UAE gains momentum from stable oil prices and robust emerging markets. Growth should accelerate to 3.5 per cent next year, according to the average forecast in a poll of 10 leading economists by The National. Only one of the respondents said they expected the economy to record lower expansion compared with this year. The IMF forecasts growth of 2.4 per cent this year. "Growth is coming back," said Giyas Gokkent, the chief economist and head of research of the asset management group at National Bank of Abu Dhabi. "Arguably, excessively rapid growth created vulnerabilities in the past." Expected expansion next year is still about half the level of the peaks of the rapidly growing boom years when the country was catapulted forward by high leverage and runaway oil prices. The poll asked respondents their views about the economy including signs for optimism and barriers to higher growth. Not all of those polled answered every question. The results suggest parts of the economy would still be in a state of recovery from the depths of the global downturn. They also provide a gauge as to where the UAE may rank within the global economic picture next year. Growth should outflank many developed countries in the West still grappling with debt and unemployment. However, it will lag the top-performing BRIC countries - Brazil, Russia, India and China - and even most other GCC states. The economists based their outlook on an average oil price projection of US$86 per barrel. Respondents were split on the question of whether it was more likely the economy next year would outperform their forecasts than under perform. Four economists said the risks were more to the downside; three believed they were more to the upside. Two said risks existed in both directions. An improving economic outlook for the UAE follows a period of transition since the global downturn. The recession choked demand for oil, sending prices plummeting as low as $33 per barrel in December 2008. Declining valuations in the country's property market, a contraction in lending and debt from global investments that soured also hurt the economy. Some of these problems were cited by economists as barriers to higher growth. Credit availability was attributed as a roadblock to growth by six economists. Some businesses, especially smaller firms, have complained that a lack of credit access was constraining their ability to expand. In addition, sluggish lending conditions are making it difficult for the Federal Government to offload some of the burden of driving the economy to private industry. Part of the problem is that banks remain hampered by their ability to lend until they improve their loan-to-deposit ratios. "The sharp slowdown in credit growth, if it persists, may expose problematic loans that have been masked by the generally favourable bankin g profitability conditions in the UAE," said Garbis Iradian, the deputy director of the Africa and Middle East department at the Institute of International Finance (IIF). The property market was pinpointed as the economic sector all respondents said they were least optimistic about. An oversupply of housing and offices in some areas means the market is expected to remain weak for the next year at least.

DDoommiiinnoo’’’ss PPiiizzzzaa ttoo rree--eenntteerr SSrriii LLaannkkaa

Jubilant FoodWorks Limited (JFL), a Jubilant Bhartia Group Company based in India, which presently holds the master franchisee rights for Domino’s Pizza in India, Nepal, Sri Lanka and Bangladesh, has plans to re-open its first store in Sri Lanka soon, a recent foreign media report stated. “It is under construction and we are hopeful that by either March-April, we should be able to open it,” Bloomberg newswires reported quoting Ajay Kaul, chief executive officer of Jubilant FoodWorks Ltd, the Indian franchisee of Domino’s Pizza Inc. Accordingly, the company plans to set up a subsidiary for this purpose. Domino’s Pizza entered Sri Lankan market for the first time in December 2000 through a joint venture with Cargills. The five stores in Sri Lanka all based in Colombo suburbs and which were under a sub-franchise agreement, has ceased to operate as of date. “JFL is to take forward their plans to enter the Sri Lankan market through company-owned stores which are a preferred mode of operation,” the firm said in a statement to the Bombay Stock Exchange accompanying its September 2010 quarterly results. JFL, formerly known as Domino’s Pizza India, also said it plans to open stores in Bangladesh next year. Accordingly, the company plans to set up a subsidiary for this purpose. The five stores in Sri Lanka all based in Colombo suburbs and which were under a sub-franchise agreement, has ceased to operate as of date. Founded in 1960, Domino’s Pizza is the recognised world leader in pizza delivery operating a network of company-owned and franchise-owned stores in the United States and international markets. The company delivers on an average over one million pizzas a day, and operates more than 8,500 owned and franchise stores in the United States and 64 international markets. Among pizza chain operators in India, Jubilant is the largest player with around 340 outlets. According to Kaul, Jubilant had about 339 Domino’s Pizza stores at the end of September 2010. In the second quarter of the current financial year, it had added 18 stores with net sales going up 67 per cent during the quarter.

TradeWinds e-Magazine is an independent electronic publication published by The Times of Sri Lanka in collaboration with Canada-Sri Lanka Business Development Network. You may contact us via e-mail: [email protected]

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January 25, 2011 - Ottawa, Ontario

Prime Minister Stephen Harper today issued the following statement declaring 2011 the Year of the Entrepreneur:

Canada’s entrepreneurs are the backbone of our economy, creating jobs and driving economic growth in communities large and small across our country. They invest themselves completely in their businesses working countless hours on every aspect of their enterprise from research and development to manufacturing, marketing and delivery.

I am therefore pleased to declare 2011 as the Year of the Entrepreneur as part of our Government’s efforts to raise public awareness of the importance of entrepreneurs to Canada’s economy and pay tribute to their drive and dedication. Our Government has listened carefully in the last five years to what entrepreneurs told us they need to succeed. We have listened and have taken decisive action to address their needs and concerns, including reducing taxes and red tape, improving access to business financing, making substantial investments in training, research, and development and opening up new markets.

I encourage Canadians to participate in activities taking place this year to support local entrepreneurs and to thank them for contributing to the quality of life we all enjoy.

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Courtesy: The Toronto Star - Brett Popplewell Staff Reporter 1/29/2011 Despite the “Great Recession,” a formidable loonie and the lasting image of police cars burning on the city’s streets, 2010 was a record-breaking year for Toronto tourism. Statistics released by Tourism Toronto show the city’s hotels rented out more rooms last year than ever before. The approximate number of “hotel room nights sold” in Toronto in 2010 was 8.93 million, giving the city’s hotels an annual occupancy rate of 68.3 per cent, up 9.7 percentage points from 2009. Though hotel occupancy rates are just one barometer by which tourism statistics are calculated, they are the key indicator by which such data is judged, says David Whitaker, president and CEO of Tourism Toronto (an industry association that markets Toronto around the world).

“This is the kind of barometer that really matters,” he says.

“The more people who are staying in our hotels translates into more taxi patrons, shoppers, restaurant patrons,” he says.

Toronto has become an increasingly popular destination, judging by these numbers. It now places sixth among North American cities (behind New York City, Oahu Island, San Francisco, Miami and Boston). By comparison, Toronto was 16th in 2006, 13th in 2007 and tenth over the last two years. All told, Whitaker says tourism brought $4.5 billion in revenue to the city last year. Roughly 33 per cent of all visitors to Toronto in 2010 came from outside Canadian borders. Visitors from the United States make up the bulk of foreign visitors to the city, followed by visitors from the United Kingdom and China. The vast majority of visitors, however, still come from across Ontario. And though he’s hesitant to single out any one tourist attraction as being responsible for the increase in visitors, Whitaker concedes the figures do show that the G20 gave a substantial boost to the city’s tourism numbers.

“Clearly June was a tremendous month, regardless of all those other aspects (associated with the G20 summit),” he says. “Most of our hotels were full of either delegates or people working the events.”

Traditionally the best month for tourism is September when the city hosts its annual Toronto International Film Festival. Last year was different. While the September occupancy rate for 2010 was 76.9 per cent (up 2.9 percentage points from 2009), the June occupancy rate was 80 per cent (up 12.8 percentage points from 2009). On the flip side, January, February and December were all bad months for the city’s hotels. But that’s to be expected. After all, does anybody really come to Toronto to witness what this city calls winter? Toronto, however, still wasn’t the most expensive city in Canada to rent a room. That honour goes to Vancouver, which hosted the Winter Olympics last February. There, the average daily rate was $151.80 in 2010, making it the second most expensive city in North America in which to rent a room (New York City was the priciest at $232.30 (U.S.)). By contrast, Toronto’s hotel rooms rented at an average rate $134.80 per night in 2010, making the city the eighth most expensive city in North America in which to rent a room. In light of the strong Canadian dollar and the prolonged recession in the U.S., exactly how and why the city remains an attraction to Americans might be puzzling to some. For his part, Whitaker says that, while the historically weak loonie may have attracted discount travellers in the past, the city has successfully refocused its image as a cultural hub that offers a variety of attractions appealing to “sophisticated urban travellers.”

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Jan 15, Colombo: The Canadian High Commission in Colombo announced that it has made an immediate contribution to supplement the flood relief efforts by the Sri Lankan government, UN and other agencies. The High Commission said in a statement that the Social and Economic Development Centre (Caritas Sri Lanka) will receive $20,000 toward a project that it will manage over the next three months. "We have all been touched by the accounts of terrible hardship as a result of the floods," Canada's High Commissioner, Bruce Levy said. With the contribution made from the Canada Fund for Local Initiatives, the High Commission intends to encourage others to contribute, the High Commissioner said. The Caritas project aims to bring relief to almost six thousand families and will focus on the provision of emergency relief supplies and shelter materials. "We wanted to help get assistance to people quickly," said Levy adding that Caritas has a record of being able to deliver efficiently. "We will also give careful consideration to any further appeals that may come from the Government of Sri Lanka and other agencies," the High Commissioner said.

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IIFA will rock Toronto, says Anil Kapoor and Preity Zinta

Having traveled to over 9 countries and 3 continents in the last decade, it will be IIFA’s North American Premiere in Canada’s largest city, Toronto. The first IIFA Awards were held at the Millennium Dome in London in 2000 and have gone on to cities like Sun City, Dubai, Amsterdam, Singapore, Yorkshire amongst others, with the most recent being celebrated in Colombo, Sri Lanka. Glitz, glamour and the biggest stars from the Indian film industry will converge in Canada's business capital Toronto this summer for the 12th International Indian Film Academy Awards (IIFA). It will be the first time the awards, known as Bollywood's version of the Oscars, are held in North America.

(Story and Pics by Upali Obeyesekere – Editor, TradeWinds e-Magazine).

The trademark green carpet will be laid out as the superstars of Indian cinema descend upon Canada for an unforgettable weekend of cinematic magic and glitz galore. The capital city of Ontario, Canada also known as Bollywood North is gearing up full steam as it becomes the first North American city to host the International Indian Film Academy (IIFA) Awards. The IIFA itinerary is set to include a Film Festival, Film Workshop, Film premiere, Global Business Forum, Fashion Extravaganza along with various Film briefings and Post Parties. Fringe activities are also to take place in parts of Brampton and Mississauga. The IIFA Weekend escalates to a grand finale, the IIFA Awards on the concluding night capping a three-day celebration of Indian Cinema. A big city with a small town and homely feel, Toronto has a large Indo-Canadian and Asian population. Known for its cultural, entertainment and metropolitan scene, the city annually hosts one of the most prestigious film festivals in the world - the Toronto International Film Festival where films from all over the world are showcased including featured presentations from India.

Anil Kapoor Preity Zinta Premier Dalton McGuinty & Preity Zinta Minister Sandra Pupatello with the stars Minister Michael Chan

At a well attended news conference on January 19 at Fairmont Royal York Hotel, Ontario Premier Dalton McGuinty also addressed the news conference saying, "We're here in big numbers because this is a big deal." McGuinty was accompanied by his ministers of tourism and culture, and trade and economic development, sponsors and organisers who discussed preparations for the event. "Ontario's diversity makes us strong and the IIFA weekend and awards are proof of that. The weekend will build on the growing economic and cultural ties between our province and India and showcase Ontario to the world," he said. Premier McGuinty said he was "thrilled" with the decision of the IIFA. "With so many film buffs living in Ontario, Indian film stars and executives will feel right at home," McGuinty, who is leading a trade mission to India, said. "Our standing as the host of the Toronto International Film Festival put us in really good stead. We have the know-how, we've got the experience and we've got the infrastructure. It's really quite an honour for us to score this coup," he said. IIFA will make magic, promised Bollywood stars Anil Kapoor and Preity Zinta as they announced that the International Indian Film Academy (IIFA) awards would be held in this Canadian city in June. "IIFA will create magic, IIFA will rock," said Anil Kapoor Wednesday announcing the 12th IIFA awards ceremony from June 23-25. "IIFA stands for building bridges. It will bring a little slice of India to Toronto," beamed Preity who joined Anil in the introductory ceremony attended by Ontario premier Dalton McGuinty, his ministers and Indian envoy Preeti Saran. Looking at McGuinty who persuaded Bollywood to bring the mega-show to this Canadian city during his visit to Mumbai in 2009, Preity said amid applause: "It is the first premiere of IIFA here thanks to Premier McGuinty." Calling IIFA "a truly grand celebration of Bollywood," she said the event will be a big treat for the Indian diaspora in Canada. Thanks to IIFA, she said, "about 25 percent of our (Bollywood) revenue comes from overseas now." Actress Preity Zinta, who is also here to promote the event. "Finally IIFA has made it here and I think it's going to be a real treat for the people because it's not just about the awards. There's so much cultural exchange," she added. Toronto holds a special place in her heart, Preity told fans and media who greeted her shortly after her arrival. "This place is special because I shot a difficult film here called 'Heaven on Earth' with Deepa Mehta. It's the film that got me my first international award," she said.

Premier, Anil K apoor & Minister Chan Consul General for India Minister Harinder Takhar

Premier McGuinty, who presented Canada's trademark BlackBerry smart phones to Preity Zinta and Anil Kapoor, said he cannot wait to see the mega-show start. "Toronto will be Bollywood central (during the event). It will redefine our city as a tourist destination and provide networking opportunities. We will put our best foot forward (to hold the event). It will be an unforgettable experience," he said. A prominent local politician, Mississauga-Erindale provincial Parliament member and Minister of Government Services Harinder Takhar, said, “As a one-of-a-kind multicultural city and one of the top financial centers in the world, Toronto is a perfect destination for showcasing the film industry of a country which is fast making its presence felt on a global platform.” "Toronto will be Bollywood central," said actor Anil Kapoor at the official launch of the International Indian Film Academy celebrations to be held here June 23-25. Anil Kapoor, overwhelmed by the hospitality and warmth of Toronto, said: "IIFA Toronto will be wonderfully staged. It will be the biggest landmark event and redefine the relationship between our two countries." "Premier, let me assure you that we will create magic. IIFA will rock Toronto," he added. The 'Slumdog Millionaire' star said "I think Toronto’s going to rock this summer," He said: "Premier McGuinty and the Province of Ontario have welcomed Indian cinema with open arms.

Introducing the event to Canadians, Indian consul general Preeti Saran said: "IIFA could not have chosen a better venue than Toronto that celebrates integration and multiculturalism as no one else in the world." "It is momentous that this prestigious award should be held in Toronto this year when we celebrate the Year of India in Canada," she added. Calling McGuinty India's "closest friend and supporter", she said it is he who "made IIFA Toronto 2011 possible". More than 500 film stars and 40,000 visitors are expected to descend on Canada's biggest city during the event. The three-day show will feature the world premiere of a select films, an awards gala, a fashion show and interactive events across the cities of Toronto, Brampton, Mississauga and Markham in the Greater Toronto Area. The Federation of Indian Chambers of Commerce and Industry (FICCI) will also join the Bollywood bandwagon to talk business with its Canadian counterparts. With its motto of 'One People. One World,' IIFA has travelled to four continents during the past 11 years to take Bollywood to the wider global community.

TradeWinds e-Magazine January 2011 Page 25 of 28

400,000,000

350,000,000

300,000,000

250,000,000

200,000,000 EXPORTS 150,000,000 IMPORTS 100,000,000 BALANCE OF TRADE

50,000,000

0

2008 2009 2009 JAN-JUNE 2010 JAN-JUNE

Canada’s Trade with Sri Lanka (C$)

January - December January - June Note: All merchandise is assigned Harmonized S y s t em ( HS) codes in order that accurate trade records can be kept, tariffs collected appropriately, customs procedures followed, and 2008 2009 2009 2010 so forth. The HS system of codes, at its most disaggregated, assigns a 10-digit code to a given item. As the degree of aggregation increases, the number of digits in the code decreases. Exports 391,446,375 332,401,846 170,928,238 187,106,494 Thus, for example, the 6-digit HS code assigned to a motor vehicle with a spark-type ignition and a cylinder capacity of more than 3000 cc is 870323. The 2-digit HS code (in this case it is Imports 119,566,192 115,718,740 57,539,432 58,081,834 87) includes not only this type of vehicle, but also many other types of vehicles and a wide variety of vehicle accessories and parts. The table above is based on Harmonized System (HS) Trade 271,880,183 216,683,106 113,388,806 129,024,660 codes at the 2-digit level. Balance

Canada’s Merchandise Trade with Sri Lanka, 2009

Canadian Imports from Sri Lanka Canadian Exports to Sri Lanka

Merchandise Classification % Merchandise Classification %

1 Woven clothing and apparel articles 26.88 Cereals 74. 06 2 Knitted or crocheted apparel 23.53 Edible vegetables, roots and tubers 21. 00 3 Rubber and rubber articles 11.83 Salt, sulfur, earths, lime, stone, cement 1.1 3 4 Coffee, tea, spices, etc. 8.39 Boilers, mechanical appliances, etc 0.6 9 5 Vegetable textile fibers, yarns, fabrics 2.83 Plastic and plastic articles 0.6 6 6 Boilers, mechanical appliances, etc. 2.82 Electrical machinery and equipment 0.4 8 7 Mineral fuels, oils 2.63 Paper and paperboard 0.4 2 8 Leather articles 2.36 Optical, medical, scientific, technical instrumentation 0.1 9 9 Fish, crustaceans, molluscs 2.04 Tools, cutlery, base metal items 0.1 7 10 Ceramic products 1.78 Eggs, dairy products, honey, etc. 0.1 6 Top 10 as % of total from Sri Lanka 85.09 Top 10 as % of total to Sri Lanka 98. 97 Sri Lankan imports as % of Cdn total 0.03 Sri Lankan exports as % of Cdn total 0.1 0

Asia's Market Share in Canada - The Asia Pacific region’s share of Canadian imports decreased last year to 20.7% of the total. Most of the decrease was the result of the decline in imports from China and Japan. Overall, the East Asian region captured 15.9% of Canada’s total imports, more than the 15.6% share of Europe in 2009. Chinese imports to Canada, decreased by $2.9 billion between 2008 and 2009, but still captured about half of all Canadian shipments from Asia. To some extent, the steady increase in Chinese imports is due to our other major Northeast Asian trading partners – South Korea, Taiwan and Japan – relocating their production facilities to China. While the majority of Canadian imports are sourced from the United States, Asia as a region captures the largest proportion – 42% – of non-US Canadian i m p o r t s .

Canada's Market Share in Asia - Canada’s market share in Asia increased from 0.96% in 2007 to 1% in 2008. There were gains in our share in over half of the economies. O f Canada’s share of the markets in four of its top six economies in the region - the major economies of Japan, China, South Korea and Taiwan – only Taiwan recorded a slight decline. Canada supplies about 2.7% of imports around the globe, and this provides some context for interpreting the rather small market share numbers in Asia. However, Canada should not necessarily be the source of 2.7% of any particular country or region’s imports. Globalization and freer trade allow for specialization and greater scope for products to be built using materials sourced in several countries. This, along with an increasingly regional focus in trade liberalization and facilitation efforts, has led to much higher intra-regional trade flows in East Asia, explaining in part the long-term decline in Canada’s share in the region’s imports. As these trends continue, Canadian exporters may well see greater overall exports to Asia and yet capture a decreasing share of the Asian m a r ke t .

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CCAANNAADDAA’’’SS BBLLAACCKKBBEERRRRYY MMAAKKEERR BBEEAATTSS FFOORREECCAASSTTSS Canada’s biggest technology company topped analysts’ forecasts for its third-quarter profit, but missed expectations on the key metric of subscriber growth prompting shares in Research In Motion Ltd. to bounce around in late trading Thursday, December 17. Earnings per share of $1.74 (U.S.) easily exceeded the consensus analyst forecast of $1.65 on strong demand in North America and internationally for the Waterloo-based company’s BlackBerry Curve and touch-screen Torch smart phone devices. Net income for the third quarter ended Nov. 27 climbed to $911.1 million from $628.4 million, or $1.10 cents a share, from a year earlier. Sales rose 40 per cent year-over-year to $5.49 billion, in line with expectations as the “BlackBerry continues to take off around the world,” RIM co-chief executive Jim Balsillie said in an earnings conference call.

But subscriber growth was weaker than expected, coming in at 5.1 million new users, consistent with the company’s guidance but below the analyst forecast for 5.2Research million. in Motion RIM (RIM)said Presidit shippedent Mike 14.2 Lazaridis million and coBlackBerries-CEO Jim Balsillie in the quarter, up 40 per cent from a year earlier. The result brings its base of subscribers to 55 million. RIM says it will no longer report subscriber growth in future qua The company sees fourth-quarter revenue of between $5.5 billion and $5.7 billion and earnings per share in the range of $1.74 and $1.80 per diluted share, with both forecasts ahead of the average analyst estimate. And while a marketing campaign in the United States, an improved BlackBerry 6 operating system and AT&T Inc.’s price cut to $99.99 drove strong Torch sales in the quarter, the company continues to lose customers to Apple Inc.’s iPhone.

RIM is offering less-expensive devices internationally in an effort to ease the loss of market share to the iPhone and handsets based on Google Inc.’s Android software. The company’s shares, initially down 2 per cent after the earnings release, closed up 4.4 per cent in late trading. The stock is up 38 per cent since August on expectations for the BlackBerry PlayBook tablet computer, but is down 12 per cent since the start of the year. The PlayBook, slated for release in the U.S. sometime in the first quarter of 2011, will compete with Apple’s iPad and new devices from rivals including Motorola Inc. and, possibly, a second version of the market-leading iPad. RIM, meanwhile, named Balsillie and co-chief executive officer Mike Lazaridis as co-chairs. Balsillie stepped down as RIM chair in 2007 after a review of its stock-option grants and results restatement.

RIM tells India no access for BlackBerry emails Courtesy: Agence France-Presse

NEW DELHI (AFP) – BlackBerry maker Research In Motion (RIM) said Thursday (Jan.27, 2011) it could not give Indian law enforcers a way to monitor its corporate mail service, days ahead of a government deadline for access. India had given RIM until the end of the month to come up with a solution allowing security forces to monitor encrypted data transmitted on the smartphone or face a shutdown of the core service. "There is no solution, there are no keys (to the corporate email service)," senior RIM executive Robert Crow told reporters in New Delhi. "It's not possible to do so because the keys of the service are in the possession of the corporate enterprises," said Crow, reiterating previously stated remarks. India's government, battling multiple insurgencies in areas from Kashmir in the northwest to the remote northeast, is worried militants could use encrypted services to coordinate attacks. Earlier this month, RIM announced it had given the government the tools to monitor its popular instant messaging service. However, Crow said BlackBerry's corporate email service was part of a wider issue that needed to be tackled on an industry-wide basis. "This is not an issue unique to BlackBerry. BlackBerry represents a very small fraction of the total population of VPN (virtual private networks) in India," he said. There may be more than a million VPNs in India with high security features, he said. India has also told Google and Skype that they must set up servers in the country to allow law enforcers to screen traffic, as the country widens its security offensive on Internet communications firms. In October, the United Arab Emirates withdrew a threatened ban on Blackberry services after saying they had been brought into compliance with the Gulf state's regulatory framework, though it did not provide details of the changes. Ultra-conservative Saudi Arabia made a similar announcement last year when it decided not to impose a proposed ban. India, which has the world's fastest-growing number of mobile users, is a key market for BlackBerry, which has 1.1 million customers in the country. BlackBerry has become a global market leader in the smartphone sector thanks to its heavy encryption.

Editor’s Note About Research In Motion (RIM) Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999. Today, BlackBerry products and services are used by millions of customers around the world to stay connected to the people and content that matter most throughout their day. Founded in 1984 and based in Waterloo, Ontario, Canada - RIM operates offices in North America, Europe, Asia Pacific and Latin America. RIM is listed on the NASDAQ Stock Market (NASDAQ: RIMM) and the Toronto Stock Exchange (TSX: RIM).

SOLIDLY BUILT COMPLETE HOUSE FOR SALE AT PILIYANDALA

Mrs. Fernando – Tel: +94 11 4360443, +94 72 4414247

TradeWinds e-Magazine January 2011 Page 27 of 28

FFEEBBRRUUAARRYY 33,,, 22000011 --- PPUUBBLLIIICC RREELLAATTIIIOONNSS && CCOOMMMMUUNNIIICCAATTIIIOONN SSPPEECCIIIAALLIIISSTTSS FFOORRUUMM --- FFEEBB A galaxy of some of the most successful and eminent experts in communications and public relations are billed to come together to share their expertise, personal experiences, and hands on insights into the art of effective communication at a high powered communications seminar ‘Communications solutions for organizational success’. The seminar will be held on Thursday, February 3, 2011 from 1 to 6 pm at the Ceylon Chamber of Commerce auditorium. This event focuses on the need for vibrant and innovative communication and public relations techniques, keeping abreast with modern global trends to accelerate organizational growth in Sri Lanka in the new decade. The seminar is tailored to equip participants to take control of key concepts and techniques of effective organizational communication and public relations, including new media and social media best practices and learn secrets of successfully proven communication techniques that can be put to immediate use and lasting results obtained. “Communications solutions for organizational success,” is presented by Rainbow Resources Lanka.

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