Inside Asian Gaming

inside asian gaming December 2014 8 Cover Story “China, clearly, was the decisive factor in ending the war,” as Forbes has noted, and has been a “key factor” five years on in the government’s efforts to deal with the aftermath, “providing Colombo the diplomatic cover against the institution of a U.N. investigation into possible war crimes, or the appointment of a U.N. special envoy on Sri Lanka. In return for such support, Beijing has been able to make strategic inroads into a critically located country in India’s backyard.” Whatever injustices might have been perpetrated in the final days of the civil war, there seems to be a genuine desire among both Tamils and the predominantly Buddhist Sinhalese majority to put that long and regrettable episode behind them and begin the process of healing. In his international bestseller “Breakout Nations — In Pursuit of the Next Economic Miracles,” Morgan Stanley’s head of emerging markets, Ruchir Sharma, not only challenges the accepted wisdom that China’s economy will motor on ad infinitum, but he picks 10 economies that look positioned to significantly outpace their peers in economic growth and development over the next decade. Sri Lanka ranks highly among them. Mr Sharma points out that even during the civil war the economy grew at an average pace of nearly 5%. “With the nation whole again, achieving a 7% to 8% growth rate over the next decade should be well within reach,” he reckons. “It would be a mistake to sugarcoat the post-war mood,” he warns. “There is evidence that Tamils, embittered by the bloody end game of the war and suspicious of Rajapaksa, continue to leave the country. But many of those who remain seem determined to put the war memories behind them.” Moreover, he says, “The reintegration of the marginalized Tamils—with their high levels of educational achievement and English fluency—should provide a huge boost to a nation that multiple Chinese President Xi Jinping visited Sri Lanka in September and inaugurated a Chinese-backed $1.3 billion coal power plant that enabled President Mahinda Rajapaksa to score populist points ahead of provincial and national elections by cutting citizens’ electricity tariffs. consulting firms already rank highly as a potential destination for multinationals looking to outsource customer service, IT and other back-office operations.” Tourism is playing an important role as well, and here, too, the China factor is significant. In 2009, the year before the civil war ended, visitor arrivals totaled around 438,000. In 2013, they surged to more than 1.2 million. And it’s the Chinese who are contributing most to the growth on a percentage basis, with the number of arrivals from China approaching 95,000 through the first nine months of 2014, a jump of 141% over the same period last year. The government has set a target of 1.5 million tourist arrivals for this year and hopes to attract 2.6 million by 2016 and is counting on a number of high-profile marketing and promotional campaigns within China to help make it happen. The government expects that before the end of this year China will overtake the UK to become the country’s second-largest tourist source market behind India, which will likely retain the top spot, given its proximity and strong social and economic ties. PLUGGING THE HOTEL GAP Even before Sri Lanka achieved peace it was one of the world’s leading travel destinations. The “Pearl of the Indian Ocean,” as the island is known, boasts hundreds of miles of beaches, tropical forests, lush, unspoiled highland valleys, stunning waterfalls, 15 national parks, botanical gardens, sprawling plantations where those legendary Ceylon teas are grown, centuries-old temples, ornate colonial-era landmarks, eight UNESCO World Heritage sites, even wild elephants. What’s lacking, however, are sufficient accommodations to cater to the kind of big-spending tourists the government is after. One man on a mission to address this is Dhammika Perera, by many accounts the country’s richest individual and also the biggest casino operator in the country. He began investing in the tourism sector as far back as 2000 and now owns a number of luxury resorts and hotels with 700 rooms in total and another 1,200 in the pipeline. Of the rooms under development, around 500 will be within his US$350 million Queensbury casino resort planned for Beira Lake in Colombo’s tourism core, not far from the US$400 million, 450- Sri Lanka Tourist Arrivals top ten countries as at end of september 2014 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 China Germany France Maldives Russia Australia Japan U.S.A. U.K. India 2013 2014