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WB: Lanka projected to grow by 3.3% amidst uncertainties

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Faris Hadad-Zervos, WB Country Director for Maldives, Nepal, and Sri Lanka

Sri Lanka’s economy is projected to grow by 3.3 percent in 2021, but the medium-term outlook is clouded by pre-existing macroeconomic weaknesses and the economic scarring from the COVID-19 pandemic, said the World Bank on Thursday (7).

A gradual recovery will likely lead to corresponding improvements in labour market conditions.

Most countries in South Asia are far from pre-pandemic trend levels, says the World Bank in its twice-yearly regional update.

The latest South Asia Economic Focus titled Shifting Gears: Digitization and Services-Led Development projects the region to grow by 7.1 percent in 2021 and 2022.

While the year-on-year growth remains strong in the region, albeit from a very low base in 2020, the recovery has been uneven across countries and sectors.

South Asia’s average annual growth is forecast to be 3.4 percent over 2020-23, which is 3 percentage points less than it was in the four years preceding the pandemic.

COVID-19 has left long-term scars on the region’s economy, the impacts of which can last well into the recovery. Many countries experienced lower investment flows, disruptions in supply chains, and setbacks to human capital accumulation, as well as substantial increases in debt levels.

The pandemic is estimated to have caused 48 to 59 million people to become or remain poor in 2021 in South Asia. Sri Lanka’s poverty at $3.20 per day poverty line is projected to fall to 10.9 percent in 2021, which is still significantly above the 2019 level of 9.2 percent.

“Sri Lanka has done well to vaccinate more than 50 percent of the total population so far and the Government is now focusing on targeted measures to prevent further COVID-19 waves, which could dampen the economic recovery,” said Faris Hadad-Zervos, Country Director of the World Bank for Maldives, Nepal, and Sri Lanka.

“The pandemic has brought unprecedented disruptions to education and the learning losses will be a drag on the country’s human capital gains. Targeted policies to reverse trends of long-term inequality and reduce gaps in equity are priority to realize growth prospects.”

In Sri Lanka, continued macroeconomic challenges, particularly the high debt burden, large refinancing needs, and weak external buffers will adversely affect growth and poverty reduction over the medium term.

Despite increased policy rates and price controls imposed by the government, inflationary pressure is expected to remain strong amid partial monetization of the fiscal deficit, currency depreciation, and rising global commodity prices. Food insecurity could worsen and poverty reduction slow if food prices remain elevated and shortages continue.

As countries build back, they have a chance to rethink their long-term development models. With the emergence of new digital technologies, South Asia has an opportunity to shift gears from a traditional manufacturing-led growth model and capitalize on the potential of its services sector.

In the medium to long term, digital technologies could become an important engine for job growth in Sri Lanka. However, despite widescale ownership of cellphones in Sri Lanka, the digital revolution will fall short of expectations without expansion of high-speed networks and accessible data on the whole island. Sri Lanka could provide new opportunities for economic mobility through policies that expand or universalize access to digital infrastructure, and investments in digital literacy are a prerequisite for widely shared benefits from these new opportunities.

“Countries in South Asia have a strong comparative advantage in exporting services, particularly business processes and tourism, whereas they have struggled to break into manufacturing export markets,” said Hans Timmer, World Bank Chief Economist for the South Asia Region. “To realize the potential of the services-led development, the region needs to rethink regulations and establish new institutions to support innovation and competitiveness.”



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The Rise of Aviyana: Sri Lanka’s luxury hospitality revolution

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Dr. Thisara Hewawasam

By Saman Indrajith

As Sri Lanka ushers in 2025, the nation prepares to unveil a game-changing addition to its hospitality landscape—Aviyana Ceylon, the country’s first seven-star luxury hotel. Situated amid the serene hills of Udispattuwa, Kandy, this extraordinary property promises to set a new global benchmark for opulence and innovation. Spanning 24 acres with a masterfully designed balance of wellness and bespoke experiences, Aviyana offers an unparalleled blend of tranquility and adventure, crowned by breathtaking views of the Knuckles Mountain Range.

“Aviyana Ceylon is not just a hotel; it is a gateway to Sri Lanka’s future as a global leader in luxury hospitality. This year, we welcome the world to discover the extraordinary – a legacy that celebrates both innovation and our nation’s rich cultural heritage,” said Dr. Thisara Hewawasam, Chairman of Aviyana during an interview with the Sunday Island.

Excerpts of the interview:

Q: What inspired you to create Sri Lanka’s first seven-star luxury hotel, Aviyana Ceylon, and how do you see it reshaping the country’s hospitality landscape?

A: Tourism in Sri Lanka dates to the arrival of Prince Vijaya, followed by centuries of foreign visits driven by trade. However, in modern times, there’s been a shift towards offering more than just basic accommodation for tourists. While Sri Lanka attracts around two million visitors annually, spending an average of USD 2,000 each, countries like the Maldives see tourists spending up to USD 5,000. To bridge this gap, I believe Sri Lanka needs a new kind of luxury experience.

We currently lack facilities that cater to high-net-worth individuals. The star hotels in Sri Lanka, typically charge between Rs 15,000 and Rs 75,000 per night, while few top-tier hotels charge over Rs 200,000. To attract ultra-wealthy tourists, we need a seven-star hotel that offers unparalleled luxury, combining all the best facilities under one roof.

Aviyana Ceylon is designed with this vision in mind: to raise the average income from foreign guests and contribute to the local economy. Many feared this ambitious project would fail, especially since most leading hotels here are international chains. However, our focus is on promoting Sri Lankan culture, wellness, traditional medicine, and Ayurveda, which will strengthen our identity in the hospitality industry. This marks a pivotal moment for Sri Lanka’s tourism.

Q: Aviyana Ceylon, nestled in the hills of Kandy, emphasizes wellness and bespoke experiences. How does the hotel blend Sri Lanka’s cultural heritage with modern luxury?

A: There are two key factors when creating a memorable resort experience: the facilities provided and the location’s offerings. At Aviyana Ceylon, we excel in both. While other hotels, like Mount Lavinia, boast a heritage and coastal view, Aviyana’s location is unique. It offers a sweeping view of one-tenth of Sri Lanka’s land area, spanning five districts. This breathtaking scenery is complemented by a diverse climate, where guests can experience five different temperatures in a single day—something no other hotel in the country offers.

Our surroundings are rich with nature—lush greenery, medicinal plants like Aralu and Nelli, and pure water from the Knuckles range, considered the cleanest in the world. The area also offers activities such as bungee jumping, bird watching, and hiking, all framed by nature’s beauty.

Beyond nature, we bring Sri Lanka’s renowned hospitality to the forefront. We celebrate our food culture by serving dishes from King Rajasinghe’s menu, where food offers both nutrition and medicinal benefits. We also embrace customer-centric service, adjusting the hotel’s offerings to suit the guest’s preferences, from security to connectivity.

Aviyana Ceylon will host traditional events weekly, featuring artists from the Dalada Perahera in Kandy. We’re also bringing world-renowned chefs who have not visited Sri Lanka before. Security is a top priority, with advanced systems ensuring the safety of all guests. The hotel includes an on-site hospital, helicopter service, and an underground area for emergencies.

Aviyana Ceylon also stands out by offering unique experiences, such as temporary ordination for Buddhist guests, access to indigenous medicine, and a dedicated hospital and helicopter service for emergencies. This fusion of luxury, culture, and wellness creates an unforgettable experience.

Q: Aviyana’s strategic partnership with the Al Nahyan Royal Family of Abu Dhabi is a significant milestone. How do you see this collaboration enhancing Sri Lanka’s global appeal as a luxury travel destination?

A: When we first approached the royal family, they viewed Sri Lanka only as a country from where they get their housemaids. To change this perception, we showed them a five-minute video showcasing the beauty and offerings of the country, which they found astonishing. This seven-star hotel concept is designed to cater to wealthy clients from Arabic countries, who have long played a key role in international trade, from the Silk Route to modern times. The Al Nahyan family has been instrumental in connecting us with high-net-worth individuals. We plan to expand our partnerships globally, reaching markets in India, the US, Europe, Russia, and other Western countries. Our vision is to host not only the royal family but also former world leaders, renowned sports figures, and artists at Aviyana Ceylon.

Q: Sustainability is often a key focus in high-end hospitality today. How does Aviyana Ceylon balance opulence with environmental responsibility, particularly in Kandy’s scenic highlands?

A: At Aviyana Ceylon, sustainability is integral to our design. We only removed 33 trees, leaving much of the 24-acre property untouched. Instead of building a massive 6,000-7,000 room hotel, we chose just eight acres for construction. We’ve also launched the ‘Breath’ project, planting 33,000 trees to date. Acknowledging the impact of carbon emissions, we invite guests to plant a tree during their visit, with their name and GPS location, so they can track its growth worldwide.

Given the hotel’s mountaintop location, we ensure no waste leaves the property. We’ve implemented an advanced Japanese waste recycling system at a significant cost. Wastewater is treated before being released into the ground. Our broader vision is to create a tourism zone in Kandy, linking local attractions like Victoria Falls, the Knuckles Range, and the Dalada Maligawa, positioning the area as a major tourism hub in the next 10-15 years.

Q: As Aviyana prepares for its grand opening, what specific features or experiences do you believe will set it apart from other luxury hotels, and what are your long-term aspirations for the brand?

A: Sri Lanka, known mainly for cricket and Ceylon tea, lacks a strong tourism brand and policy. Despite being one of the best destinations globally, we fail to leverage the opportunities tourism presents. Aviyana Ceylon aims to change that by becoming Sri Lanka’s defining luxury brand, much like cricket. We’re working with top global influencers to promote the hotel, with plans to invite one from each of 160 countries to cover our opening. With social media reach, we hope to captivate millions worldwide, offering a marketing campaign unlike anything seen before.

Our goal is to create a lasting impact not only for Aviyana Ceylon but for Sri Lanka’s tourism sector. We plan to introduce a hotline and travel insurance for all tourists to enhance their experience, benefiting the entire industry.

As we near completion of the seven-star hotel, we expect heads of state from Arab countries to attend our opening. With the government’s support, we anticipate a 20% boost in tourism revenue and increased hotel prices in Colombo. Looking ahead, we’re also planning the Aviyana-2 project, with a world-first gem showroom and hospital, bringing Sri Lanka’s pride to the global stage.

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AIA Sri Lanka welcomes Biswa Prakash Misra as new Chairman

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AIA Sri Lanka last week announced the appointment of Biswa Prakash Misra as the new Chairman of the Board of Directors, effective January 2025 – subject to approval of the Insurance Regulatory Commission of Sri Lanka.

An AIA news release said Biswa brings a wealth of experience and expertise to this role, having been a member of AIA Group’s leadership team since 2013. As part of the AIA Group Executive Committee, he is the Group Chief Technology Officer and Life Operations Officer. Biswa is also responsible for the Group’s business operating in New Zealand and a director of various companies within the Group.

“A seasoned technology professional with a deep understanding of the insurance industry, he has demonstrated strong leadership in driving technology, digital and analytics transformation and operational excellence across the Group. Throughout his career spanning over 25 years across various Asian markets, he has successfully managed complex, multi-market Information Technology (IT) teams. He has been actively involved in due diligence, mergers, and acquisitions, demonstrating his ability to navigate complex business environments and manage external stakeholder relationships effectively,” an AIA new release said.

“Being a career insurance technology professional, he is well-versed with the insurance value chain including manufacturing, distribution and digital. He is an insurance Enterprise Architect and has successfully transformed IT landscapes in several entities.

“He has successfully worked with diverse teams across several Asia-Pacific markets including Hong Kong, Taiwan, South Korea, India, Thailand, the Philippines, Indonesia, Australia, New Zealand, Singapore, Vietnam and Mainland China.”

AIA Sri Lanka’s Executive Director/ CEO, Chathuri Munaweera said, “We warmly welcome our new Chairman, Biswa Prakash Misra, while expressing our sincerest gratitude to our outgoing Chairman Tan Hak Leh for being a nurturing leader who allowed us to reach greater heights in customer focus led business growth as a team. Biswa’s extensive experience in the insurance industry, coupled with his deep technological expertise, will be invaluable as we continue our journey of excellence in helping Sri Lankans live Healthier, Longer, Better Lives.  We are committed to raising the bar even higher under his guidance and expertise.”

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Star Garments Group wins gold at NCE Export Awards

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Star Garments Group secured the Gold Award for the Textile and Garment Sector under the Extra-Large Category at the 32nd NCE Export Awards, held on December 6 at Shangri-La Colombo.

Organized by the National Chamber of Exporters of Sri Lanka, the event highlighted the theme “embrace innovation and digitalization.” Despite global market challenges in 2023, Star expanded operations with new acquisitions, including Kolonna Manufacturing (Pvt) Limited, bringing its total number of factories to 12.

Employing over 10,000 associates, Star produces approximately 1.6 million apparel pieces monthly and exports to leading global brands. The group has achieved carbon neutrality through renewable energy initiatives and operates Sri Lanka’s first LEED Platinum-certified facility under LEED version 4. Star also plans to establish a factory in Togo, West Africa.

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