Worldwide Nepalese Students' Organisation
Sri Lanka



This report was prepared by the American Embassy Colombo on April 27, 2001.

SUBJECT: IT penetration in Sri Lanka

1. Summary: The importance of Information Technology (IT) for social, economic and professional development is well recognized in Sri Lanka, generating a keen interest in mastering IT skills among the urban population. While the recently created Ministry of Information Technology has yet to put forward a strategic plan, the private sector has taken a lead in popularizing IT. Widespread IT use is especially apparent in the economically important Western Province, which includes Colombo. Judging by mushrooming computer vendors and training centers, computer usage seems to be spreading rapidly in provincial capitals as well, despite Internet penetration being very low. IT has not penetrated deeper into other parts of the country in an appreciable manner. Computers are used widely in the private sector for business applications with varying degrees of Internet connectivity and speed. Several important sectors of the economy are yet to embrace the IT revolution such as schools, the health sector, agriculture and large sections of the government. (This report does not attempt to cover e-commerce readiness.)

Computer/ Internet use in homes
2. Computer usage is spreading rapidly in towns throughout the Western Province, including the capital Colombo and in other provincial towns such as Kandy, Galle, Matara and Kurunegala. A significant number of affluent upper and middle class families now own a personal computer (PC). A low to mid-priced PC costs between Rs 45,000-70,000 (about $520 to $800 at the current rate of exchange). At these prices, however, computers remain out of reach for most Sri Lankans. Recent estimates of the number of computers in Sri Lanka (in homes and offices) range up to as much as half a million. Computers and related equipment are free of import duty but subject to a 12.5% goods and services tax and a 0.5% national security levee.

3. Internet access on a commercial basis became available for the first time in 1995. Internet use remains very low due to high cost of computers and telephone access, low bandwidth and low computer literacy. At present there are 37 licensed telecommunication service providers including 24 Internet service providers (ISPs). The licensing fee remains high at Rs. 3 million ($34,000), and contributes to the high connection rates charged by ISPs. By the end of 2000, there were 42,000 Internet hosts. As some of these hosts are cybercafes, government and private sector corporations, and education institutes, the estimated number of Internet/e-mail users could range from 100,000-150,000, mainly urban elite. There is an acute rural/urban disparity with respect to access to IT. The disparity stems largely from the disproportionate economic concentration in the Western Province, which accounts for 40% of GDP and over 70% of manufacturing output. The total teledensity (telephones per 100 persons) stood at 6.3 (fixed 4.0 and mobile 2.3) by the end of 2000, up from the fixed teledensity of 1.69 in 1997, but still low by Asian standards.

Public Internet facilities
4. Public Internet access facilities are limited. There are about 25 cyber cafes in Colombo, each with 10 or more computers providing Internet access. A growing number of wayside communication centers throughout the country now offer e-mail facilities for a fee. In addition, a few libraries offer Internet facilities to members, such as the American Information Resource Center, the British Council, and libraries of various professional bodies. Other public Internet facilities are minimal. For instance, the National Library of Sri Lanka has only two public access computers with Internet facilities. Public libraries in major provincial towns have computer facilities but the level of service offered to the public are minimal. The Internet is expanding slowly to the provinces. For instance, in the southern economic center of Galle, there are only about 5 Internet kiosks with about 5 computers in each. In the Central Hill capital Kandy, there are a few Internet kiosks. Even the provincial chambers of commerce have limited Internet facilities, reflecting the high cost as well as the limited computer literacy in the provinces.

5. There have been a few highly successful community efforts to popularize the Internet. One such creative effort is a community radio project undertaken jointly by several GSL entities and UNESCO in Kotmale, a rural hamlet in the Central Province. A daily interactive program run by the project allows listeners to send phone or mail requests for information from the Internet. The presenters broadcast information via radio. It has brought widespread awareness of the Internet among communities in the coverage areas including farmers, schoolteachers, community health workers and students. There are other initiatives as well, such as a computer center with facilities in a rural school in the North Central Province by a U.S.-based virtual community of Sri Lankans EThe Lanka Academic Network (LAcNet) committed to providing computer access to disadvantaged communities. Another such effort is the corporate donation of a computer center with Internet facilities to the state-run planetarium in Colombo. This Internet cafe is popular among the roughly 200,000 students who visit the planetarium each year from all corners in Sri Lanka. Such micro projects are few and far between and the majority of rural students as well as economically disadvantaged urban students have yet to see a computer, let alone surf the Internet.

6. Media efforts to popularize IT and the Internet among the masses have been limited. One of the most successful efforts has been a weekly program titled "Bringing the Internet to your home" in the Sinhala language over the state-owned National Television Channel. This prime time live broadcast started in late 1998, has provided a virtual tour of the Internet to viewers, with guided instructions for Internet usage and webpage design while providing a forum for viewer participation and providing answers to informational and technical queries. The program has an enthusiastic audience and as recent feedback has indicated, has been instrumental in creating nationwide interest in the Internet. The mainstream newspapers carry regular IT columns and there are a few regular IT magazines published locally. Many Sri Lankan newspapers have online editions, mainly accessed by people living outside the country.

Schools are just beginning IT education
7. The IT revolution has not yet entered Sri Lankan schools. Only a handful of elite schools and select private schools have computer centers mostly donated by past pupils associations or private organizations. The situation is set to change, though at a slower pace than desired.

8. The first initiative to introduce computers to schools has come from the World Bank and the Asian Development Bank. They have recently launched two separate projects to introduce computers to schools and teach computer skills to high school students. The two projects plan to provide computer centers each with 10-20 computers to 1,400 schools during 2001-2006.

9. In addition, the Education Ministry has recently setup an IT unit to design a strategy to introduce computer education in schools. The Ministry hopes to establish computer centers with about 10 computers each in at least 4,000 of the 10,000 government schools, by 2004. The program intends to teach computer skills to children in all age groups in the selected schools on a staggered basis. There are no plans to provide Internet facilities due to band-with problems and high cost. Instead they plan to use simulation packages to introduce Internet concepts. Another major obstacle to introducing computers to schools is the lack of teachers with IT skills. To overcome this, the Education Ministry is hoping to provide basic IT knowledge to all schoolteachers within the next 3 years.

Private sector role in computer education
10. The private sector has stepped forward to bridge the gap in computer education. There has been a proliferation of computer training centers for children as well as adults. They are found not only in the Western Province but also in other urban centers throughout the country. There is a great demand for these facilities, as the normal school curricular does not include computer education. Most educated parents, including the less affluent middle classes, plan on sending their children to a computer education center sometime during their school career. While some of the privately run courses are accredited and are linked to reputable higher education institutes, doubts have also been raised about the quality of some courses. Quite a number of employers have publicly stated the need to standardize these courses.

11. The training institutes provide various types of IT training programs ranging from basic computer skills to software programming and hardware engineering. They include Novell and Microsoft certified courses, CISCO, object-oriented courses and e-commerce, and range from certificate level to diplomas, degrees and post graduate degrees. Authorized institutes provide on-line US testing services such as Sylvan Promatric testing and Virtual University Enterprise (VUE) testing. Training currently available for children include IBM Kidsmart, Futurekids and British national curricular for computers. There are many IT training institutes with foreign collaboration. Some offer degrees from foreign universities while others train students for professional examinations of the Australian and British Computer Societies. E-learning courses through which students follow courses offered by foreign universities online over the Internet are also available. In addition, the state-run local universities have computer science faculties offering both undergraduate and post-graduate courses in computer science.

12. Among various government efforts to popularize IT at the tertiary education level is a plan to establish 50 IT training centers throughout the island with the assistance of the private sector. In addition, the Government already provides school leavers with computer skills in 70 computer resource centers. These centers are located in all parts of the country except in conflict areas.

IT use in the private sector
13. Information technology is widely used in the private sector. Export companies, manufacturing companies, multinationals, banks, financial institutions and other service companies use computers widely including local area network systems for a variety of business applications. An increasing number of private sector companies have e-mail and Internet accounts. The number of corporate web sites is also growing. In the banking sector, a few banks provide Internet banking facilities to clients. IT penetration is low in small and medium industry sector and non-existent in rural agriculture sectors.

14. A leading Sri Lankan IT company, E-wis, recently launched a Sinhala software package containing stock control, book keeping and accounting software for rural businessmen. The company said that the product was a pioneering one and aimed at providing easy and effective solutions to Sinhala speaking small and medium entrepreneurs. The company will market the product through its regional offices in the provinces.

IT in Government
15. The GSL is increasingly relying on IT for automating key internal ministry processes. A separate Ministry of Information Technology was created to formulate IT strategies. The key ministries and government departments are acquiring PCs, installing LANs, databases and Internet access. Many of these systems, however, do not fully automate a given process, with manual processes complimenting the functions that have been automated. Only a few organizations have Intranets or Extranets.

16. Examples of computerization within the GSL include partially computerized container handling activity in the Colombo Port where shipping agents can access terminal departure reports and bay plans, Colombo Stock Exchange with screen based trading, Automated check clearing house, SWIFT inter bank networks, airline reservation systems, Department of Examinations, billing of the Ceylon Electricity Board, Water Board, and Sri Lanka Telecom, and some divisions of the Department of Inland Revenue. For the first time, the Education Ministry recently posted public examination results on the web, and IBM won a contract to install a border and visa control system at the Department of Immigration and Emigration. In addition, many public sector institutions have developed their own web sites, including the Finance Ministry, Board of Investment, Public Enterprises Reform Commission, Foreign Ministry and Sri Lanka Customs. However, most web sites do not take full advantage of the interactivity offered by Internet and none of the statutory dues to the government can be paid over the Internet. The state run university system has a dedicated system interconnecting all the universities and research institutions in Sri Lanka. It also provides e-mail and Internet connections.

17. There are many key government departments, providing public services, which arent computerized yet. Although the Government is the main employer of medical professionals, government hospitals do not provide them access to Internet. Computers are also not used for data storage and health administration in government hospitals. Just one government hospital in the whole of Sri Lanka uses computers for hospital and patient administration such as storing data, admissions and billing. Similarly, the Registrar Generals Department, which keeps records of births and deaths, as well as the Registrar of Companies and Pensions Department do not have computerized operations.

18. Opportunities for U.S. companies: The growing IT interest will offer good opportunities to U.S. companies to explore market potential in computers and related services and training. The Government actively encourages foreign investment in this sector especially in software development, IT services, e-commerce and IT training institutes. Incentives include tax holidays and duty free imports.




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