Sri Lanka: The beautiful, besieged island

In July 2025, the influential global travel website Big 7 named Sri Lanka the “most beautiful island in the world,” stating that the “teardrop-shaped island off the southern coast of India has it all—golden beaches, terraced tea plantations, timeworn temples, colonial towns, misty mountains, and wildlife safaris ... elephants and leopards.”

- BY DR. ASOKA BANDARAGE

The beauty of the island is not limited to its physical environment, unique Buddhist culture, and the diversity of its population; it is the simplicity, warmth, and generosity of ordinary people that make the island beautiful.

The popular perception is that international accolades boost tourism, bringing much-needed foreign exchange to the debt-trapped island and prosperity to its long-suffering people. The Sri Lankan government has set an ambitious target of attracting three million tourists and $5 billion in tourism revenue for 2025.

Tourism, however, is fickle and highly susceptible to environmental and political-economic downturns. Following the 2019 Easter bomb attacks in Sri Lanka, and during the COVID years and the 2022 economic crisis, tourist arrivals dropped sharply, bringing the entire sector to a standstill. Instead, it was the remittances from Sri Lankans working abroad that maintained external sector resilience during those crises. Even now, from January to July 2025, worker remittances have exceeded $4.4 billion, while tourism revenue reached only about $2 billion.I

If managed properly, the tourism sector could play a major role in the country’s recovery. Unfortunately, this does not seem to be the case. Although tourism is asserted to be the primary foreign-exchange earner, much of the money generated by foreign-owned tourist businesses is likely repatriated abroad. Sri Lanka permits full repatriation of earnings, fees, and capital from foreign exchange transactions, though the extent of this wealth transfer remains opaque.