Pestle Analysis of Sri Lanka PDF

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PESTLE ANALYSIS OF
SRI LANKA
Ceylon, also known as the Democratic Socialist Republic of Sri Lanka, is an island
nation in South Asia. The Gulf of Mannar and the Palk Strait divide Sri Lanka from the
Indian Subcontinent. Sri Jayawardenepura Kotte is the nation's capital, while Colombo
is the nation's capital, while Colombo operates as its commercial center and largest
municipality. In terms of size and territory, it ranks as the 120th largest nation. The
Island is home to about 21,803,000 people, making it the 58th most populous nation
in the world.
We'll discuss Sri Lanka's pestle analysis today. The macroenvironmental elements
affecting the top developing nation in the globe will be examined. The following is a
comprehensive analysis of Sri Lanka:
POLITCAL FACTORS
Sri Lanka follows the semi-presidential system of government and administration. The
country has multiple democratic parties. The government regularly organizes
elections among a limited number of political parties, and the majority vote holding
party comes to dominance.
Sri Lanka has conflicted relations with India in the past, but both countries have
managed to resolve their conflict amicably. However, the country has also developed
very relations with regional countries like China and Pakistan.
Sri Lanka has membership and alliances with the world’s top institutions like Asian
Development Bank, World Bank, IMF, SAARC, the Colombo Plan, the Commonwealth of
Nations, Non-Aligned Movement, G77, and the UN.
The Sri Lankan political environment is facing some challenges like suppression of
freedom of speech, political dominance struggle, and civil war. The country needs a
lot of reforms like equal treatment of minorities, human rights, communal harmony,
and a stable political environment in order to compete with the world.
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ECONOMICAL FACTORS
Inflation is the key driver of the Sri Lankan economy. The country is facing a payment
crisis due to a growing debt and a heightened inflationary risk. The government is
heavily dependent on external debt bailouts to keep the economy running. So that Sri
Lanka has struggled with macroeconomic crises, including currency devaluation,
current account deficits, and inflationary pressures.
The economic outlook for Sri Lanka is bleak. Its currency has weakened significantly
since the election of the new government, while the country's economy has
experienced a string of problems. The government has been attempting to increase
foreign investment, but the lack of foreign capital has hindered growth. Meanwhile, its
electricity and water costs continue to rise, causing many factories to shut down.
SOCIAL FACTORS
As evidence of Sri Lanka's exposure to various civilizations over the course of history,
the fact that it was known as "Taprobane" by ancient Greek geographers, "Serendib"
by Arabs, and "Ceylon" by European mapmakers (Peiris, 2021). India and it connect
culturally in a very close way.
Sri Lanka's population is over 21 million people, roughly. Over 70.2% of the population
identify as Buddhists, making it the religion of choice. Hinduism (12.6%), Islam (9.7%),
and Christianity (7.4%) are further minority religions. Even though, men and women in
the nation live an average of 72 and 78 years, respectively. It's important to note that
the nation has an esteemed literacy rate of more than 92%.
The economy of Sri Lanka is highly unequal which leads to discrimination towards
lower caste, communal conflict, the higher unemployment rate among women, and
over-reliance on agriculture, extreme poverty, and dense population.
TECHNOLOGY FACTORS
Over the years, Sri Lanka has made excellent scientific and technological
achievements in science and technology. Governments have undertaken a variety of
steps in recent years to digitalize various economic sectors. To speed up the
digitalization process, additional work must be done. The computer literacy
percentage, which was only 27.5% in 2019, also requires development (Hewage and
Munasinghe, 2019).
Social media platforms such as Facebook and Instagram have become popular in Sri
Lanka, and the number of users rising fast. However there is still a lack of internet
connectivity in some areas of the country, and the government must improve
connectivity and invest in digital skills and innovation to help the country catch up
with the competition.
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LEAGAL FACTORS
Due to the country's complex legal structure, there is no distinction made between
local and international workers under its employment regulations. Employees are
guaranteed a national minimum monthly income of 10,000 Sri Lankan rupees, which is
roughly equal to $50 USD, under the National Minimum Wage Act, No. 3 of 2016.
Media freedom is the biggest concern for the country. The lack of political will, delays
in judicial processes, incompetence, and inadequate resources have led to a culture
of impunity.
ENVIRONMENTAL FACTORS
Sri Lanka is one of the most attractive nations on earth, drawing visitors from all
around. Seafood, trumpeting animals, constant bird singing, picturesque landscapes,
islands, tea gardens, national parks, and UNESCO world heritage sites are a few of the
tourist attractions. They all support the nation's tourism sector. Theses forests are
amongst the most beautiful and rich in Asia and for some faunal groups, it has the
highest density of species diversity in the world. These forests have been largely
cleared for agriculture, timber, or grazing, and many of the dry evergreen forests have
been degraded to thorn scrub, savanna, or thickets.
Poor waste management, overfishing, the decline of mangroves, pollution of the
water and air, and inadequate waste management are only a few of other serious
environmental problems brought on by Sri Lanka's economic development.
REFERENCES
Peiris, G. (2021) Sri Lanka, available at: https://www.britannica.com/place/Sri-

Lanka (accessed 08 March 2022)
Hewage, K. and Munasinghe, D. (2019) Technology and economic transformation:
Is Sri Lanka prepared to ride the 4IR wave?, available at:
http://www.ft.lk/opinion/Technology-and-economic-transformation–Is-Sri-
Lanka-prepared-to-ride-the-4IR-wave-/14-676196 (accessed 08 March 2022)
Trading Economics (2021) Sri Lanka GDP, available at:
https://tradingeconomics.com/sri-lanka/gdp (accessed 10 March 2022)
BBC (2019) Sri Lanka country profile, available at:
https://www.bbc.co.uk/news/world-south-asia-11999611 (accessed 10 March
2021)
AUTHORS
Rubasinhage Dona Samitha Madushika
Angarukarage Dinusha Lakmali

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Peiris, G. (2021) Sri Lanka, available at: https://www.britannica.com/place/Sri-

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