Role of Imports in Sri Lankan Economy. Interaction of Imports and Tariffs with Five Hubs of Growth - By Dr Saman Kelegama

By courtesy of www.island.lk

Address by Dr. Saman Kelegama, Executive Director, Institute of Policy Studies of Sri Lanka at the AGM of the Import Section of the Ceylon Chamber of Commerce, 3 August 2010:

"It is an honour to be the Chief Guest at the AGM of the Import Section of the Ceylon Chamber of Commerce. I thought that it will be appropriate to share some of my views of the import sector of Sri Lanka so as to identify its current role in the Sri Lankan economy and its role in the future. Accordingly, I will deal with four broad issues relevant to the import sector in Sri Lanka, viz., (1) the positioning of imports in the Sri Lankan economy, (2) imports as a value adder to the Sri Lankan economy, (3) imports as a revenue earner to the economy, and lastly, (4) imports as a growth facilitator in the economy.

Let me start with import positioning in the Sri Lankan economy. In the Sri Lankan economy today, imports (of goods) roughly amount to US$ 12 billion and exports (of goods) amount to US$ 8 billion. This roughly boils down to imports amounting to 30% of GDP and exports amounting to 20% of GDP. Basically, exports of goods finances 63% of the imports of goods. If we add remittances which amount to approximately US$ 3 billion or 7.5% of GDP, then 92% of the goods import bill is financed by goods exports and remittances. Thus, the country is in a position to support its import (goods) flows as long as the foreign reserves are in a healthy position.

If Sri Lanka could sustain its reserves above US $ 3 billion, then the country will be in a comfort zone where it could finance 3 months and above of imports. Sustaining reserves above US $ 3 billion when the import bill is escalating will be a challenge. Sri Lankan remittances in recent years have been covering the oil import bill – this is also a noteworthy feature of the import sector.

The largest source of imports is India (accounting for 25% of total imports), followed by China (includes Hong Kong). But if we consider EU as a single source, then it is the second largest source of imports to Sri Lanka and not China. Sri Lankan imports as a percentage of global imports amount to meager 0.1%.

One can note that if the Sri Lankan economy is growing above 5%, it is normally supported by growth in imports above 10%. Sri Lanka’s growth is such that it is an import-intensive growth. Take for instance, the growth of our industrial sector and services sectors – the two fast growing sectors in the economy. Industrial growth is mainly driven by export industries like ready-made garments, gems and jewellery, leather products, etc., and they are all import intensive. Two export items that grew under the India-Sri Lanka Bilateral FTA were Vanaspathi and Copper — they too were import intensive with palm oil imported for vanaspathi production and raw iron imported for copper production. In services, growth sectors like wholesale/retail trade, tourism, telecommunication, etc., all are import intensive.

In any country in the early stages of development this is what we observe, an import-intensive growth. In Sri Lanka, the import composition statistics further provides evidence of this. Consumer imports amounted to 50% of overall imports at the time of Independence. Today, they amount to only 19% of overall imports. On the other hand, intermediate goods used for industries and services that accounted only for 11% of overall imports at the time of Independence, have doubled its share to 22% of overall imports today, clearly indicating that the input of imports in Sri Lankan production has increased.

Sometimes, when there is a call for depreciation of currency by exporters there is also the concern of the impact on the import-intensive exports and import-intensive services and thus the overall growth trajectory, as imports will become more expensive. That is why calls for depreciation take time for full consideration by the policy making apparatus in this country.

These are some of the noteworthy characteristics of Sri Lanka’s import sector.

I now come to my second topic of imports as a value adder to the economy. Import liberalization can also be a source of value addition. Take for instance, assembly operation from Completely Knocked Down importations. One can import components of a motor vehicle, three wheeler or refrigerator and assemble them with some value addition to sell in the domestic market. The value addition will be small but if the operation takes place in a large scale the value addition will also be bigger. Let us now take a higher value addition case with the example of the gem and jewellery industry. There was a call in the early 1990s to liberalize the importation of gem stones. After some initial hesitation, we did liberalize, and as a result, variety and jewellery products were manufactured in Sri Lanka using a variety of stones. One can easily say that the import liberalization in this case certainly increased the value addition to the economy.

But we must note that import liberalization contributing to value addition is not straightforward. If there are competing products in the domestic market, import liberalization will not lead to value addition. In fact, import liberalization will lead to closure of industries if Sri Lankan products are not in a stage to face competition. That is why in the India-Sri Lanka Bilateral FTA (ISLFTA), all agriculture products and SMI (small and medium industries) products were kept on the negative list. Even in the SAFTA, APTA and the Pakistan-Sri Lanka Bilateral FTA (PSLFTA) those sensitive products of Sri Lanka have been put under the negative list.

Then there are cases of import liberalization for value addition where the arguments are not straightforward. In cases where Sri Lanka has a brand name like tea, the case for import liberalization is not straightforward because if import liberalization is done without a proper regulatory framework in place, import liberalization can dilute the brand name and reduce the domestic price for tea. Brand name can be diluted, for example, by mixing 10% Ceylon tea with 90% imported Indonesian tea and exporting as Ceylon tea. Tea traders will benefit, but tea manufacturers and exporters will have concerns on domestic price level and ‘Ceylon Tea’ brand name, respectively. That is why the liberalization of importation of tea has become a hotly debated topic. In such a case, value addition through imported tea should be done with supervision and extreme care. Some countries created special Export Processing Zones for enhanced supervision to get the best results from import liberalization. In cases like this, we have to be constantly vigilant on how global operations are taking place and accordingly adjust our strategy to be in line with global trends.

I now come to my third topic of imports as a source of revenue. At the time of Independence, import duties contributed revenue amounting to 6.2% of GDP, today it contributes close to 2% of GDP as revenue. Here, I am only referring to tariff revenue. When liberalizing an economy, we should not see import duties as a major source of revenue. From 1977 onwards, revenue from import duties fluctuated – from 2.27% of GDP in 1977 it increased to 4.1% of GDP in the late 1980s due to the increase in import volumes making up for the reduction in tariffs as a result of liberalizing the economy. But import duties declined to 3.3% of GDP in late 1990s and further to to 2.0% of GDP in the late 2000s. That is understandable because although the import volumes increased by the mid-1990s, WTO related tariff reduction, regional and bilateral agreements related tariff cuts further reduced revenue. For example, 1,208 product lines became duty free for India under the ISLBFTA and 102 product lines became duty free for Pakistan under the PSLFTA. It is estimated that there are 2,500 duty free lines (746 MFN duty free lines) out of the 6,500 tariff lines. Also, with the formation of BOI in 1992, duty free importation increased rapidly so much so that about 65% of imports now come under duty free or tariff free to Sri Lanka.

At the border however, it is not only tariffs that operate: there are a number of other taxes that have been imposed from time to time at the border, viz.: (a) surcharge on customs duty (was removed for most products on 1 June 2010); (b) VAT, (c) Excise Duty, (d) Commodity Export Subsidy Scheme (CESS), (f) a number of development taxes operating in the border – (1) Port and Airport Levy (PAL), (2) Social Responsibility Levy (SRL), (3) Regional Infrastructure Development Levy (RIDL), and (4) Nation Building Tax (NBT). Due to these taxes, the overall border tax contribution to revenue is close to 50%. This boils down to overall customs duties related revenue amounting to 8% of GDP. Now the question arises why are all these taxes in operation? Several factors have contributed to their evolution. One was to raise additional funds for the war at that time; second, to meet expenses on development activities – PAL, RIDL, etc.; third, to meet product development like the CESS – whether the CESS goes to the industry concerned, i.e., tea, rubber or coconut via the Consolidated Fund is another matter; and fourth, for protection on the basis of industrial lobbying – duty surcharge or CESS may have been imposed to fulfill aspiration of various lobbies.

This has made the border tariff structure highly complicated. These taxes are imposed on different tax bases at the point of importation making it further complicated. When designing the tariffs for the imports coming into Sri Lanka, there was a four band tariff structure: 2.5%, 6%, 15% and 28% and they were to cover the following: 2% for raw material, 6% for semi-processed raw material, 15% for intermediate goods, and 28% for final goods (of course there was the zero rate also). This structure has got complicated not only due to the development and other nuisance taxes, but also due to specific tariffs – extremely high duty on cigarettes, liquor, motor vehicles, etc.

The time has come to simplify this process – get rid of these ‘add-on’ taxes and keep the same level of protection by adjusting the import duties. This is a very important area that the Presidential Taxation Commission has been asked to look into and all of you will be able to see the Commission’s recommendations by early September.

My final topic is imports as a facilitator of growth: ‘Mahinda Chintana Idiri Dakma’ aims for a 8% growth rate. This can come by improving the ‘doing business’ environment in Sri Lanka and bringing down the ICOR (Incremental Capital Output Ratio) from 5 to 4 and increasing investment to 32% of GDP. Currently, investment per GDP is at 24% of GDP and thus an 8% GDP increase of investment is required —- 4% will have to come from FDI and the remaining 4% GDP increase in investment from the domestic private sector. If investment cannot meet these targets, we will have to look at a combination of consumption-led growth and investment-led growth.

Most of the consumption-led growth is import intensive. The increased sale of motor vehicles and electronic goods after the import duty was lowered was consumption-led. It is a consumption-led growth that is giving a new lease of life to the leasing industry and electronic good importers. Take for example meeting the challenge of the tourism sector — 15,000 new rooms are required by 2016. It has been estimated that the per room cost will be close to Rs.10 million, and more than 60% of this will be on import expenditure – carpeting, curtaining, air conditioning, TV, DVDs, etc.

Even investment-led growth will be import intensive. Take for instance, North-East rehabilitation and reconstruction – that will also be quite import intensive. Take for instance, the five hubs articulated in Mahinda Chintana: Aviation, Shipping, Energy, Knowledge and Commercial — which will become major growth poles. Can hubs be developed by cutting off Sri Lanka from the rest of the world ? – No, they can be developed only by further opening up the economy and welcoming imports of not only goods but also services.

Singapore is an oil hub —- does it produce any oil ? - no. But, it liberally imports oil and is engaged in value addition. Singapore, blessed by its strategic location by a major sea route for oil tankers, is one of the major energy hubs in the world for oil refining and exporting. In addition to the Singapore Petroleum Company Limited, the world’s largest energy multinational companies such as ExxonMobil, Royal Dutch Shell, Chevron, BP, Total, Marubeni and, Mitsui have invested in Singapore’s oil industry. Singapore produces 8.3 million oil barrels a day, which is nearly a 10% of world oil consumption, but 10 times Singapore’s own consumption. The point I am trying to make is that Sri Lanka need not be an oil producer to become an energy hub.

Let us look at the 5 hub areas from Sri Lanka’s regional perspective: Aviation – today close to 42 % of revenue of Sri Lankan Air Lines comes from flights to India with 90 to 100 weekly flights. Shipping – today close to 71% of transshipment in the Colombo port comes from India. Energy – today close to 35% of our oil imports comes from India – Lanka IOC. Knowledge: IT, Biotech, Nanotech, Ayurvedic and Indigenous medicine —— all these areas we share closely with India. We have to seriously take cognizance of these issues when talking about making Sri Lanka a regional hub. The point I am trying to make is that these hubs will be difficult to develop by trying to by-pass India. It is in this context that the proposed frameworks such as CEPA have to be looked at seriously.

Always there will be views in favour of and against CEPA. Even in the EU there are the Euro-files and Euro-sceptics and this is particularly seen in the UK where the debate is still going on whether UK should be a part of Euro or remain outside it. But unlike in Sri Lanka, these debates are kept at a very professional level and not at a personal level or ‘patriot versus traitor’ level, as it is sadly the case in Sri Lanka. As a result, many are reluctant to openly come out and debate the subject of CEPA.

Be that as it may, imports are going to play a vital role in the Sri Lankan economy in the coming years. Sri Lanka has to clean up the border taxes and make the import tax regime simple and transparent while strengthening the regulatory framework to ensure that dumping of unwanted imports do not take place. Imports will play a vital role as a growth generator and a value adder to the economy in the coming years."

Where Is Sri Lanka Tourism Going? And the Need to Address Many Complex Challenges Ahead - By Srilal Miththapala

By courtesy of www.thesundayleader.lk

Just over a year ago, I penned an article entitled “Sri Lanka Tourism — Quo Vadis” where I raised the issues and challenges Sri Lanka was facing in developing its tourism industry. Of course, that was during the latter stages of the war, and now after the ending of the war, there has been a dramatic turn-around of the industry. Hence it may be worthwhile re-visiting the issues.

For the last seven months that ended July 2010, arrivals are up almost 50 percent year-on-year (YOY) (341,991), with earnings also keeping pace at 69 percent growth (Quarter 2; US$ 244.5 million). The hotel and travel Colombo Stock Exchange (CSE) index increased by 199 percent for 2009. Today tourism is on everyone’s minds, and it is difficult to open a local newspaper without seeing at least one article on tourism. There are tourism “experts” cropping up at the rate of a-dime-a-dozen, as everyone tries to hitch a ride on the bandwagon.

All this euphoria gives rise to the question about whether Sri Lanka Tourism is well on the way to recovery and growth or not.

The answer is a very emphatic “yes” — in the short term. There is no doubt that pent-up demand for the destination, which has been inaccessible for many years, is driving growth. At the cost of being labeled a pessimist and a devil’s advocate, I am of the view that all this spectacular growth we see is definitely short term. In my mind, the challenge is whether these growth patterns can be translated into long-term sustainable growth.

Even if we sit back and rest on our laurels, tourism will certainly chug along growing at a leisurely pace of 5-10 percent YOY. But if we want to play catch up with our competition, grow exponentially, and propel Sri Lanka tourism to be in the forefront of our economy, then there are many complex challenges ahead.

Competition from the region with the global financial crisis now petering out, very soon our Asian neighbours, such as Thailand (who had their own series of problems), Malaysia, Singapore, Bali, etc. will get their act together and join the fray, with strong promotional campaigns strengthening their already solid differentiated brands and positions as prime tourism destinations. Singapore is already re-branding from their squeaky clean image to a relatively more exciting destination with casinos opening up. July of this year saw their highest arrivals ever for a single month at one million visitors. The product offering of these countries is far superior than what Sri Lanka can offer on a one-to-one comparison.

Hence as a first step, the ageing Sri Lanka hotel plant has to be refurbished and upgraded on the fast track. It is good to see that some 1,500 existing hotel room stock is currently under refurbishing and upgrading.

With hotel pricing being rapidly readjusted to reflect a more internationally-accepted base (we were selling at cheap war-time rates until recently), we run the risk of seeing dissatisfied clientele. When tourists begin to pay higher premium rates, their expectation levels rise, and the product offering has to be of international standard. Otherwise we may end up over-promising and under delivering.

Engine of Growth

Almost everyone talks about Sri Lanka tourism being the engine of growth and expects it to play a pivotal role in the economy. This is nothing new, and we have heard this through the past decade. However, it has never really translated into action by successive governments and never has it being given its rightful place in the national mindset.

There are many examples as to how the government pays lip service in positioning Sri Lanka tourism as the engine of growth. For example, it is now four years since the annual Presidential Awards for the Tourism Sector was set up, but never have the awards been presented by the President. In fact, it has been gradually downgraded from the initial presence of the prime minister as the chief guest, now relegated to a deputy minister to do the honors.

However, perhaps for the first time we see some signs of steps in the right direction in the consolidation of tourism along with other related subjects under one powerful ministry. The results of the exercise are still to be seen.

Tourism Earnings

Earnings from tourism amount to only about US$326.3 million annually (2009 CBSL) , having slipped down to the sixth position among Sri Lanka’s foreign exchange earning sectors. However, current trends show a dramatic increase because of the hotel rate price correction that is taking place in the market now. Given the current trend, it should easily surpass US$500 million this year.

Tourism, especially in the Asian region, has a huge multiplier effect, which has a great bearing on the livelihoods of a very large proportion of population. In a study done and quoted by Air Asia, it was revealed that while tourism earnings of Malaysia and Thailand amounted to some 6-8 percent of their respective GDPs, when the multiplier effect, which is about 12 times, is applied, the impact on GDP shoots up to close to 35 percent! In Sri Lanka, tourism accounts for less than 1 percent of the GDP, but will certainty increase with the development of tourism in the post-war scenario.

Growth Targets

Sri Lanka tourism was suddenly put into somewhat of a spin about an year ago, when the President came out with a target of 2.5 million tourists by the year 2016. We certainly do not know how this number was arrived at, and even now, no one has really questioned it. There is certainly no harm in setting out Big, Hairy, Audacious Goals (“BHAG,” to borrow from management parlance ref. James Collins & Jerry Porras).

There are two schools of management theory in goal-setting and planning. One is the conservative method of taking stock of where you are, what your resources are, what opportunities there are, etc. (SWOT Analysis) and then deciding on your goal. The other school of thought is where the analytical assessments are enhanced with and tweaked with an element of emotion and gut feeling, where the leader, using his in-depth experience, plants a much bigger and more ambitious (audacious) goal. Subsequently, the planners and operational experts somehow try to muster up sufficient resources and work out strategy and plans to achieve this goal. So for Sri Lanka, it is the latter that has taken place, and for better or worse, a 2.5 million target of tourists (or something very close to that) by 2016 is now an accepted fact among everyone in the industry.

Arrivals vs. Earnings

It is obvious that arrival figures alone do not give the correct picture. Earnings from tourism is also important, or in fact, more important than arrival numbers.
There are two ways of “skinning a cat:” — we can have 1,000 tourists spending US$50 per day bringing in US$5,000; or — we can have 50 tourists spending US$1,000 each, bringing in the same US$5,000 revenue. One needs to, therefore, take a good hard look as to where Sri Lanka tourism would like to position itself – does it have to play the numbers game, or can it go down the qualitative route. The answers are not easy.

The qualitative route calls for the attraction of the high-end market. While all of us would like to follow this strategy, one must pause to take stock of the practical realities. This will require not only high-quality hotel rooms, but it will require a whole horde of other specialised infrastructure requirements and improvements in the supply chain to cater to this discerning clientele. It will require a paradigm shift and re-positioning of the entire fabric and delivery of the tourism product and service in the country. Other than for the small boutique hotel segment, none of the more conventional higher-end properties can really cater to such top-end discerning clientele currently, given the fact that they are still catering to the mass-market segment as well.

Such a changeover may be possible over a considerable period of time, to completely shift the perception of the destination in customers’ minds, and to completely change the product offering . (Currently Sri Lanka is perceived as a value-for-money, cheaper-end destination.) The question is do we have the time?

If we need to fast track development and reach for high, sustainable growth (and BHAG’s), we will have to look at higher numbers who may be somewhat less demanding. This has been the success story of most Asian countries in the forefront of tourism development today, such as Singapore, Malaysia, Thailand, Vietnam, and Cambodia, who drive millions of visitors per year. Certainly there will still be room for the high-end boutique hotel clientele and other niche markets, but that will only constitute a part of the overall market mix and will not be the predominant segment.

The Room Requirement Controversy

There has been a lot of controversy generated by the estimates put forward for the number of rooms that need to be built to sustain 2.0-2.5 million tourists annually. Calculating and forecasting the number of rooms required is somewhat complex, because it depends on many factors. The main drivers are: occupancy, average length of stay per tourist, seasonality, and dispersion of occupancy into different regions.
Currently, the mix is predominantly weighted towards the leisure traveler seeking a beach holiday, which results in a longer average stay of 10 days per visitor. There is strong seasonality, with the months of January and February having sharp peaks, calling for larger number of rooms during this period, while the months of May and June have a very low occupancy. Currently occupancy is generally concentrated around the southern and western coastal areas where the largest number of hotel rooms is situated. If these parameters are slotted into the equation, the room requirement works out to around 50,000. Thus to achieve the 2016 target, some 35,000 more rooms will have to be built by 2016 (currently we have approximately 15,000 rooms in stock).

Assuming an average of 100 rooms per hotel, this will translate into building another 360 hotels in the next six years. Firstly, it is difficult to envisage where such vast amounts of land suitable for tourism development, to build some 300+ hotels, can be found in the country. Even if we can find the land and fast track such developments, a fully-fledged conventional hotel will take at least two years to build and commence operations. It does not take too much expertise to realise that this will be virtually impossible, and, therefore, we have to look at a different model.

After some in-depth analysis and study of emerging tourism trends, especially in the Asian region, the tourism private sector came to the conclusion that the mix of tourists should move away from dependence on “sun and sand” and attract more visitors seeking entertainment, conventions and incentives, and specialised interests. This would then drastically change the market mix of visitors to the country and reduce the average stay to around six days per tourist.

With the development of tourism in the east, seasonality will be evened out, and the tourism product will be spread more equitably around the country. When these new parameters are worked into the equation, the total room requirement reduces dramatically to a more manageable total of 28,000 odd rooms, which then calls for the development of only a further 13,000 new rooms. This is certainly a more manageable and feasible option.

Environmental Issues

In reaching for these large arrival numbers, there has to be careful thought given to environmental sustainability issues. If some 13,000 extra rooms are to be built in the country (which will translate into 100 or more new hotels) with over two million tourists unleashed annually in the country, without proper planning, there is bound to be serious environmental and sustainability issues. Such large-scale and fast track growth has to be carefully planned and managed within specific tourism zones to prevent environmental and cultural degradation. This is the reason that the private sector has suggested large-scale zonal development of tourism in building these additional 13,000 rooms on the fast track.

This will require large-scale resort developments on a planned basis in at least 4-5 designated zones in Sri Lanka. Individual hotel developments will not suffice. Such well-planned, large-scale tourist resorts can be designed to encompass sound sustainable environmental practices (e.g., common self-contained sewage disposal facilities with recycling of water, solar lighting for resort public areas, no-build green belts within resorts, etc).

Such organised and well-managed, large-scale developments contained in several designated zones will help mitigate most of the possible negative fallout of the socio-cultural and environmental aspects. Building and subsequent maintenance should be under strict environmentally-sustainable guidelines. Large numbers of small-scale development strewn all over will not be a viable proposition to maintain Sri Lanka’s environmental sustainability nor will it be sufficient to drive the exponential growth required.

Need for Outsourced Resort Development Model

In the ideal scenario, these developments should be outsourced to foreign or foreign/local collaborations (perhaps with a greater bias towards local participation) to develop, market, and operate these resorts on a BOT/PPP basis, under a special set of incentives and laws (similar to an economic investment tourism development zone). These mega BOT/PPP developers should be called upon to undertake the provision of all internal infrastructure activities within these designated resorts, including the required sustainable environment practices within government guidelines, and then attract local and foreign hotel companies to undertake individual development within these zones (already identified development areas such as Kalpitiya, Kuchcheveli, Pasikuda, Arugambay, etc., should be included).

Public–Private Sector Partnership and Tourism Reforms

For over a decade, the private sector lobbied, quite legitimately, for a greater say in the affairs of tourism , given the fact that the entire hotel infrastructure is privately owned and funded. Proposals for such a partnership between the state and private sector was formulated , debated, modified by successive governments, and finally a landmark legislation was passed unanimously in parliament in 2007, laying the framework for a private sector-public sector collaboration framework.

Four distinct entities were set up to run the affairs of Sri Lanka tourism, somewhat along the lines of a corporate structure, with both private sector-public sector board members. The private sector voluntarily offered to partially fund this exercise through the payment of a new 1 percent CESS and the Tourism Development Fund was set up under the Finance Ministry Act No. 25 of 2004. A good foundation was laid, and the new frame work began to work very satisfactorily. Multiple changes of ministers in quick succession, followed by the inevitable changes in individual chairmen of the institutions, disrupted the smooth development of this process.

The initial success of this private sector-public sector partnership was seen as a model that could be duplicated in other sectors as well, and even donor agencies such as the World Bank considered this an important example to be emulated in other developing countries.

However, there are currently far-reaching structural changes being contemplated to this success story, which will effectively limit private sector participation in the future. There has been no discussion or consultation with the private sector regarding the proposed changes. It is important, therefore, that the private sector is consulted and made a part of this evaluation and development process.

Promotion and Branding the Destination

Reaching towards large ambitious goals is certainly quite good and commendable. But at the same time, we must know exactly what Sri Lanka tourism stands for. How do we as a nation want Sri Lanka to be seen and portrayed as a tourism destination? Without deciding what our competitive advantage is and planning out our strategic position, we will not be able to sustain exponential growth targets.

At a recent public forum on tourism, the leading local exponent of positioning, Dr. Uditha Liyanage, who was very closely associated in the now defunct branding exercise for Sri Lanka tourism, very clearly brought out the need for Sri Lanka to decide what it stands for as a tourist destination or even, for that matter, as a nation.

Unless and until we have a clear idea of what Sri Lanka’s strategic position is in the market, no amount of infrastructure development, marketing, and promotions will be successful in the long term. We need to figure out who we want to be and what our competitive position is. Our deliberations a few years back revealed that the ideal positioning for Sri Lanka tourism was “Asia’s authentic and compact island providing a diverse array of natural and other attractions and experience.” From this stemmed the vital brand architecture of:

- diversity … unique
- unspoiled … traditional
- compact … authentic
- indigenous … exotic
Therefore, even if the “small miracle” has fallen by the way side, it is important that we retain this brand architecture in all our proposed developments to ensure environment sustainability.

Conclusion

Sri Lanka needs to see tourism grow rapidly and provide the impetus to drive the economy forward and play an important part in improving the livelihood of Sri Lankans.

- In doing so, there will be a price to pay, but we have to carefully minimise the impact on the environment and on our culture.

- There has to be a clear branding and positioning of Sri Lanka tourism, and these key attributes should be maintained and safeguarded in all developments that will be undertaken.

- Large-scale, mega-tourism developments, which unfortunately will be necessary, must be limited in order to carefully zone selected tourism areas in the country under strict environment planning guidelines.

- A strong private sector-public sector task force must be mandated and authorised to drive the development of Sri Lanka tourism under these guidelines.

(Srilal Miththapala is a wild life and elephant enthusiast. He is also President, Tourist Hotels Association of Sri Lanka.)

Wonder Plant Bermuda Grass -Arugampul, Cynodon dactylon- and It’s Medicinal Value

Bermuda Grass or Arugampul is indeed a blessing to the ailing humanity. It is quite surprising that a plant of this nature that could cure or bring considerable relief to so many ailments that would otherwise require treatment with expensive drugs, is so well hidden in this information age. It is still more surprising when one considers how wide-spread this plant is in tropical countries such as Sri Lanka where it grows wild even by the roadside.

Going by the scientific name Cynodon dactylon, this plant is also known as Durva Grass, Dhub, Bermuda Grass, Dog’s Tooth Grass, Bahama Grass, Devil's Grass, Couch Grass, Indian Doab, Grama, and Scutch Grass. This grass is know in Tamil as Arugampul and is used in making garlands for Lord Ganesha. One of the surest ways to identify this grass is to visit a Hindu Temple and ask to be shown some Arugampul.

Please let me digress here to express my gratitude to Mr Somapala Dematapitiya, for it is in his book entitled “Discovery of Gods Unseen” that I first came across the medicinal properties of this wonder plant. Mr Dematapitiya has taken a bold step by publishing this book with a view to unravelling the realities embodied in the subject of gods, and brings about some authentic revelations about the whole concept of gods and deities. In his discussions he mentions wonderful properties of Arugampul and comes up with a fitting name for it too - “Rajamantri". A review of this book is found here.

How Arugampul Got Bed-Ridden Liver and Kidney Patients on Their Feet
Mr Dematapitiya maintains that taking boiled Arugampul everyday would improve your overall well being as it helps remove toxins from your body. Also, it should help cure many ailments like blood pressure, diabetes and gastric disorders. Further, he cites instances where he had recommended Arugampul treatment to people with serious kidney and liver complications, and happily, how they had shown a tremendous improvement, some to the extent of not needing expensive treatment like kidney dialysis any more. This is all the more remarkable when we consider the utter simplicity of the 'Treatment’ - Boiled Arugampul Three Times a Day. We can imagine the relief it must have brought these patients as some of them by then had had their financial resources drained by their medical expenses.

By looking up Arugampul or Bermuda Grass on the Web, one can get loads of information on the plant and a large number of Arugampul remedies for various ailments.

Bermuda Grass (Arugampul, Cynodon dactylon)
This is a grass native to north Africa, Asia, Australia and southern Europe. The blades are a grey-green colour and are short, usually 4-15 cm long with rough edges. The erect stems can grow 1-30 cm (rarely to 90 cm) tall. The stems are slightly flattened, often tinged purple in color. The grass creeps along the ground and root wherever a node touches the ground, forming a dense mat. It has a deep root system; in drought situations with penetrable soil, the root system can grow to over 2 m deep, though most of the root mass is less than 60 cm under the surface. Cynodon dactylon reproduces through seeds, through runners and rhizomes. Growth begins at temperatures above 15 °C (59 °F) with optimum growth between 24 to 37 °C (75 to 99 °F); in winter the grass becomes dormant and turns brown. Growth is promoted by full sun and retarded by full shade.

Medicinal Value of Arugampul
Bermuda Grass or Arugampul has wonderful medicinal properties. It acts as an excellent detoxifier. It’s juice purifies blood and flushes out the toxins out of the body; Cures Nervous weakness and general fatigue; Strengthens the body and tones up the nervous system. This makes for overall well being.

Arugampul or Bermuda grass contains more than 65% of chlorophyl. This helps in increasing the number of red blood cells in our body. It contains protein, fiber, calcium and phosphorus and potassium. It helps in maintaining the alkalinity of blood as it reduces acidity. It helps resists attacks of cold and is quick in removing phlegm.

This grass improves digestion, cures stomach ailments. It has been observed that dogs, troubled with stomach ailments, search out and eat this grass. Hence the name Dog’s Tooth Grass.

This is also an ideal diabetic diet. About 10-15 Neem (Margosa) leaves along with a handful of Arugampul can be ground to a fine paste with a few drops of water. This juice is effective in curing diabetes if it is of recent onset. In chronic cases of diabetes, this juice helps keep sugar level in control. Also drinking Bermuda Grass juice every morning on an empty stomach is good for diabetic patients as your sugar level should come down.

For persistent skin diseases like scabies and eczema, take a handful of Bermuda Grass and a small piece of Turmeric and grind to a fine paste and apply the mixture in the affected area. This can be washed away after half an hour. Regular application is found to cure eczema, scabies and other skin rashes.

To get rid of bodily weakness, body heat and mouth ulcers take a mixture of Bemuda Grass and cow’s butter for 20 to 48 days. This should bring a glow to your face as it would improve skin tone.

Bermuda Grass is also found to be effective in curtailing blood loss. Be it blood loss due to an injury, nosebleed, or excessive menstrual flow, these can be treated with Bermuda Grass or Arugampul.
A study in India has shown that Arugamul juice or powder increases haemoglobin levels and has good effects on anaemic pregnant mothers. It is an excellent supplement for lactating mothers. It boosts Prolactin and so increases the quality and quantity of breast milk.

How to Prepare Arugampul or Bermuda Grass
You can take raw Arugampul juice or make it into a tea by boiling the grass with some water.

Take a fistful of the grass and wash it thoroughly. Extract Juice by using a mixer or a grinding stone, using water sparingly. Add water to the juice in the proportion of 3 parts of water to one part of the extract. You can drink it straight.

This should be taken preferably in the morning. Avoid taking any drink or food for the next 3 hours. This juice extract can be taken twice or three times a day.

For Arumugam Tea, follow the same process above up to grinding of the grass to extract juice. Then boil it –both grass and the extract- in a pot of water. You can add water as you see fit, but keep in mind that adding more water will dilute the efficacy of the tea. You can take this tea three times a day and some people use it in place of drinking water too. If you are a diabetic patient, please do not over-drink the brew.


Web Resources
The Health Grass for Humans

Siddha Home Remedies – Medicinal Uses of Arugampul

Evidence-based Critical Evaluation of Glycemic Potential of Cynodon dactylon

Effect of supplementation of Cynodon Dactylon (Arugampul) juice/powder on anaemic pregnant women (20-30- years)

The Sacred Grass

Bermuda Grass - Worldly, Wily, Wonderful weed

Yatagiyaawe Yata Giya Than - History brought out of Distortion : W. S. Bandara

This is about a book where the author looks at our history from a fresh viewpoint much removed from the general outlook, and attempts to analyse the same with clear, incisive reasoning and brings forth historical vistas that contrast sharply with the ‘accepted’ interpretations, and explains as to why they had to be so.

Mr W. S. Bandara, the author of this extraordinary book gives it the bold title of “Yatagiyaawe Yata Giya Than – Ithihaasaya Vikurthiyen Prakurthiyata”, which could be loosely translated as “Obscure Vignettes of the Distant Past – History brought out of Distortion”. As the title itself implies, the author has been bold enough to challenge the “accepted” interpretations of our history that are generally based on information gleaned from Chronicles, anecdotal stories, folklore, and archaeological findings. What makes this book outstanding is the effort taken by the author to critically analyse these very same sources of information and arrive at his own interpretations. It is interesting to observe how the author uncovers a hidden -or overlooked- aspect of a particular event of our history by the force of his elucidative argument and brings forth compelling evidence to substantiate his point of view while gently exhorting the reader to think anew.

Beliefs can never take the place of truth
The Book makes for an extremely interesting read. The author maintains that a belief can never stand for the truth, and as such, a belief has to be promptly brought under the thorough scrutiny of reason for the truth to be established by facts; a student of history should therefore diligently look for those facts without taking to the easier path of often travelled trails of history laid down in the Chronicles.

A clear thread of reasoning runs right through the book. The author questions why Chronicles gave preference to Vijaya’s story over the legend that is even depicted in Ajantha paintings, and why Chronicles gave short shrift to certain kings, and also why some of the notable deeds of kings were curiously overlooked while some mediocre activities received lavish attention. He discusses at length the eternal power struggle between the clans of Moriyas and Lambakarnas and the inconsistent attitude adopted by the Maha Viharaya towards them. He conjectures why the reciprocal support that existed some times between South Indian kingdoms and Sri Lanka turned to hostility at certain junctures.

Why Sri Lanka should be called Ceylon
Author submits a strong case as to why Sri Lanka should not be called Sri Lanka but Ceylon. He traces, as proof, the roots of the word Ceylon much past the recent colonial past into deeper ancient history. Another interesting chapter examines how some Sinhala place names changed overtime to their Tamil forms, how some were absurdly linked to Ramayana legend, and even how some were distorted into meaninglessness.

Articles on the spread of Mahayanism, the extent of our foreign relations, and the enviable place we occupied in ancient history demonstrated by the oversized Taprobane in Ptolemy’s 2nd century map deserve our special attention. Whether coconut could have come to Sri Lanka from Polynesia along with some common Sinhala words whose origin cannot still be explained shows the colourful spectrum of subjects that has come under the author’s purview.

Author’s view on Sigiriya
The author identifies the famous Sigiriya Damsels and cites as evidence a verse from Sigiri Graffiti. This is a clear example of how historians could fail to see the forest for the trees.

While the basic emphasis of this book is on our history, the author has not forgotten the common people of that bygone era, their taste, and their ability to appreciate nature which made me reflect sadly on the present state of affairs especially the current taste evinced by our media. The influence of the Buddhist doctrine on the lives of our people as opposed to the role played by popular Buddhism later on in our society is also underscored in several places.

Truly a hidden gem
This book should have stirred up a veritable hornet's nest but all I could hear is silence. Except for the buzz generated by some past pupils of Richmond College, Galle, where the author had taught for long years, highlighting the book and its author, and except for a lonely online bookstore that has put up the images of this book which are shown here, there is hardly any mention of this valuable book in the whole of the vast World Wide Web. It is indeed a pity that such a scholarly effort could be so very well hidden in this information age. It is almost by accident that I came across this book and bought it out of curiosity without realizing the value of it – Truly a hidden gem.

As you can see from the title and accompanying images, this book is written in Sinhala and reasonably priced at about Rs 300.00, and available online too for under $5. I wish the author or publisher would take steps to translate this to English and make the ideas available to the whole world. Lack of well deserved publicity or narrow language barriers should not keep this gem hidden from the world.

Book Review : Verajay

Effect of global warming on tea production in Sri Lanka

20th November 2009, www.island.lk

By Dr M T Ziyad Mohamed, BSc (SL) Ph D (Sheffield UK), Director, CIC Tea Advisory Services (Pvt) Ltd.,

Tea produced in Sri Lanka commonly known as "Ceylon tea" throughout the world is very popular for its unique quality, since its introduction.

Ceylon tea won such an accolade, due to its unique flavour, especially coming from regions like Dimbula (Talawakele – Hatton), Nuwara Eliya, Uva, Udapussellawa, Bogawantalawa and Maskeliya. Interestingly, apart from soil conditions and the terrain in which the tea is grown, climatic conditions prevailing in these regions contributed significantly, towards the development of such flavour compounds in tea leaf.

Since early 1990s, the leafy grade teas produced, mainly in the Low country (elevations <>

The leafy grade teas too are considered somewhat unique to Sri Lanka. But, Vietnam producing similar type of teas since of late, might pose a threat to the domination of Sri Lankan leafy grade type teas, had enjoyed for quite sometime, in the international arena.

Impact of global warming on productivity of tea at different elevations;

Up country:

Along with good soil conditions, well distributed rainfall and humid conditions, a mean ambient temperature of 20 – 26 0C has been identified as conducive for growth of tea. Tea is a rain fed crop, hence well distributed rainfall enhances its productivity. With global warming, the rainfall patterns have changed and the tea sector is already experiencing erratic weather conditions (higher rainfall during a shorter period of time and long spells of dry weather), which affect the overall productivity. Furthermore, such higher intensity rainfall also results in soil erosion, leading to low land productivity and hence crop losses.

According to data collected so far, the mean ambient temperature is about 14 – 23 0C, in the Up country. While low temperatures had been helpful in maintaining a higher organic matter content in the Up country, the ambient temperature is not the ideal for growth of tea. Thus, on one hand, due to global warming, the productivity in Up country is predicted to increase, with ambient temperature approaching the ideal, 20 – 26 0C.

On the other hand, with the elevation of temperature, some of the tea pests such as, shot hole borer, which were hitherto confined to low elevations, are seen to affect the productivity of tea plantations in Up country. Furthermore, crop losses are also predicted, due to increased activity of dry weather pests, such as Tea Tortrix, Mites etc., with rise in temperature.

Mid Country:

Although the mean ambient temperature in Mid Country 20 - 240 C, is somewhat ideal for growth, the low productivity recorded at present, could be attributed mainly due to eroded soils. With increase in temperature due to global warming, the soil carbon levels would further go down, due to increased carbon mineralization and it will further aggravate the lowering of soil productivity leading to more crop losses.

Low Country:

The mean ambient temperature in Low Country, 23 - 330 C, is already not only higher than the optimum, but it is close to the critical temperature (300 C), for growth. Thus, further rise in temperature will result in, lower productivity due to faster depletion of organic matter and also higher percentage of casualties too.

Impact of Global warming on quality of tea produced

The important reason for flavour development in tea leaf is, the climatic condition experienced in those regions. Although such conditions prevail through out the year, especially during a particular period of the year, the flavour is more pronounced. During the latter periods, the days are dry and the nights are cold, causing stress conditions to the plant, which in turn enhances flavour. Such climatic conditions exist in Dimbula, Bogawantalawa, Maskeliya and Nuwara Eliya during the period of November to February and in Uva as well as Uda Pussellawa, from July to September.

Increase in ambient temperature due to global warming is expected, to increase the night temperatures as well and hence would expose the tea plant to less stress conditions. Thus, a decline in overall quality (flavour) could be expected, in Up country.

However, the global warming might not lead to significant changes in quality of tea produced either in Low Country or Mid Country, provided that the leaf standard is maintained, at a satisfactory level.

Measures to mitigate the effect of global warming on tea production:

By establishment and management of shade in tea plantations, it is possible to mitigate the impact of rise in ambient temperatures in tea plantations. By having a good cover of high and medium shade, not only the mean ambient temperatures could be controlled, but soil fertility could also be improved, through leaf litter from those trees, in addition to lopping them as green manure at regular intervals. In the absence of such shade management, the option available is the installation of expensive irrigation systems, such as drip and sprinkler. However, considering the number of plants per unit area of land and the cultural operations involved (such as plucking every week), drip irrigation systems, might be difficult to maintain, where as the sprinkler systems should work. Furthermore, finding sources of water itself, to irrigate will be an issue during dry periods, under the global warming scenario.

Impact on the small holder sector:

With global warming, the small holder sector contributing, nearly 70% of the island’s production might, become vulnerable with regard to its productivity, as it is concentrated mainly in the Low Country. In addition to the effects of global warming, the adoption of short cut methods in tea cultivation practices, as a result of lack of know-how in this sector, might aggravate the situation. Under such a scenario, the contribution from Low country, which presently stands at 58 – 60% of the total, might decline.

Such a drop in production from the small holder sector will lead to, severe competition for green leaf, between private factories processing bought leaf. Thus, it will be prudent for the state to intervene and stop opening up of new factories, in Low country. If not, it will aggravate the unhealthy competition for green leaf already experienced in Low country, which in turn will lead to difficulties in maintaining the quality standards, established over the last so many decades, with great effort by the tea community.

It is hoped that overall wishful thinking and timely intervention by the sector as well as the state, would save this important industry and thereby sustain the image of Ceylon tea in the international arena!!!

(The author was the Director, Tea Research Institute, during the period 2003 -2006)

Motor Insurance and you - Things to remember when you go for an insurance policy

Let us bring to you a very useful and relevant article we found in Daily Mirror.

Motor Insurance and you
By Ravi Sumithraarachchi - Senior Manager-Motor Insurance
Courtesy : www.dailymirror.lk of 11th November 2009

The first insurance policies were issued towards the end of the nineteenth century. At this experimental stage, there were insurance company failures, the first occurring in 1910.

The 1st world war hastened technological development because there was an obvious need for a mode of transport with the attributes of mobility, speed and efficiency. At the end of the war, popular motoring really began, in an era of cheap, light ‘baby’ cars. Consequently, motoring became a worldwide pursuit.

There was a corresponding increase in personal injury litigation, the result of the fact that a proportion of motorists were uninsured. Those insurers who did provide motor insurance cover tended to incorporate the handling of the business within their accident department. As the motor account grew, it was deemed necessary to develop it as a separate class.

In drawing up this new type of policy insurers were influenced by their experience of fire, theft and liability insurance and as a result they placed more emphasis on the subject matter (the vehicle) for rating purposes than they did upon the driver.

Nowadays, they give more weight to the driver and his experience, particularly to the young driver. The early years of the 20th century saw the formation of insurance companies in which the main emphasis was upon motor insurance. The experience of fire, theft and liability insurance, however, influenced the development of composite insurance companies and when motor vehicles appeared on the roads in larger number after the 1st world war, motorists placed most of their business with the larger, composite offices.

Insurance was introduced to Sri Lanka in the early 1930s when foreign insurers opened branches and Agencies following on the opening up of mainly British business houses in the developing Colony that was Ceylon. With the growth of business the market gradually developed till 1962/64-the period over which the insurance industry was nationalised. At this time there were 50 insurance companies doing active business in Sri Lanka.

By the late 1940s the Ceylon Accident Insurers Association had come to realise that their joint and several interests would best be served if they were to agree to adopt a more or less standard set of guidelines and basic rates for motor insurance. Thus the motor tariff came into operation within the framework of the Ceylon Accident Insurers Association. However, the Motor Insurance Tariff has now been lift off (after August 2002) in order to provide a competitive market.

Motor Insurer is, without doubt, the class of insurance business most amenable to standardisation and yet, at the same time, it provides one of the widest range of factors calling for individual appreciation assessment, and decision. With the large number of motor vehicles in use in Sri Lanka there are bound to be sound reasons for grouping the vehicles according to their usage for rating purposes.

(1) Every person is required by law to affect Motor Insurance if such person intends to use a motor vehicle on the road or where people have access. The insurance policy must be in force and must fulfil certain legal requirements. A Certificate of Insurance must be issued in terms of the Motor Traffic Act. There are special regulations concerning Motor Traffic. An action lies for breach of statutory duty.

(2) As in other types of insurance it is essential for the insured to have an insurable interest in the subject matter.

(3) The insured is required to answer all the questions in the Proposal Form either affirmative or negative. He is under a duty to disclose to the insurers all material facts to the risk proposed for insurance and should not make any misrepresentations. The completed Proposal Form will be the basis of contract between the insured and the insurer.

(4) Various conditions are set out in the body of the Policy, while some specific conditions are mentioned in the Schedule of the Policy. The Policy may cover injury to the insured, loss of or damage to the insured vehicle, also cover a person driving with the consent of the insured or the insured himself whilst he is driving cars other than the insured vehicle.

(5) As in all insurance Policies, Motor Insurance Policy also contains "General Exceptions" which excludes/restricts liability. The insured is under a duty to observe the "Conditions" imposed by the Policy and these are conditions precedent to liability. Any breach of a warranty or condition of the Policy would make the insurance contract null and void.

(6) Insurance against liability in respect of the death of or personal injury to third parties are generally compulsory.

(7) In certain circumstances a third party has a direct right to claim against the insurers in respect of injuries, which he has suffered by reason of negligent driving.

Choosing motor insurance

If you drive your vehicle on the road, or leave it parked in the street, the law says that you must have motor insurance. It is an offence not to insure your motor vehicle. Before you buy motor insurance, decide who will be driving your car, and how much cover you would like. There are three main types of motor insurance:

Third party insurance

This is the minimum amount of insurance cover that you must have for your vehicle. Third party insurance only covers you for damage to someone else's vehicle or property, or injury to someone else in an accident which involves your car. If your vehicle is damaged in the accident you will have to pay for the repairs yourself.
Third party, fire and theft insurance

This includes third party cover and, additionally, damage to or loss of your car by fire or theft.
Comprehensive insurance

This includes third party, fire and theft insurance. In addition, it will also pay for repairs to your car.

The cost of an insurance policy is called a 'premium'. Ask for quotes from several insurers to help you to get the best deal for your circumstances. You will need to compare:

- What each policy covers, and any exclusions (risks which are specifically excluded, for example, allowing private usage only)

- The no claims bonus which increases for every year that no claims are made on your policy, up to a maximum amount. Most insurers will let you transfer the discount, if you want to change your insurer. You will also need to compare the amount by which your no claims bonus would be reduced if you made a claim.

Things to remember

- You must give your insurer or the person who sells you the insurance as much information as you can about yourself and your vehicle. You must, for example, tell your insurer or the person who sells you the insurance about any medical condition which could affect your driving ability, or any motoring accidents, even if you have not claimed on your insurance as a result. The information you give will affect the level of your premium, and whether your insurer will pay out on any claim.

- You must tell your insurer, in writing, about any change in your circumstances. You should tell them as soon as the change occurs, and not wait until it's time to renew your policy.

- If the vehicle has been bought on credit, the finance company will usually insist that it is insured in the name of the person who has taken out the credit agreement.

- Motor insurance policies normally run for a year. Your insurer does not have to send you a notice reminding you to renew, but most insurers do send out reminders.

- When you take out or renew motor insurance, if you are been given cover note, this will be valid for 30 days or until you get the insurance certificate. It is an offence to drive without a cover note or insurance certificate, so do not rely only on a telephone conversation where someone has told you that you are covered.

- You can cancel an insurance policy if you sell your vehicle or any time if you wish. You should check your policy to see if you have a right to a refund of your premium.

Cars of my youth - When the British and American vehicles held sway on Sri Lankan roads

By Vikmaj

I remember going to school in the 50’s in my father’s Austin A30 which was built as an alternative to the Morris Minor which was very popular at that time. But the Peugeot 203 which came in the 40’s was also extremely popular at that time. The 203 was used by a slightly richer crowd as it was a bit more expensive than the Morris Minor. The Volkswagen Beatle entered the market in the 50s and gave the 203 a very good run for money.

When the Volkswagen Beatle came in, all had reservations, in particular as it was air-cooled. The common consensus of opinion was that it would be a flop and would not be able to withstand a rigorous journey, but all the pundits were proved wrong. The car caught the market like hot cakes and it became a fad even among the upper class. Of course, the Peugeot 203 retained its position, but VW Beatle outsold the Peugeot 203 owing to its price.

The 203 had an excellent turning circle which was considered to be the best among the continental cars other than the Triumph Herald.

Although the VW Beatle was air-cooled and had only two doors, it could run for long hours without a problem as it had no water to boil. VW and the 203 had similar shapes at the back side of the vehicle.

The Police also started using the 203 and the Austin Cambridge MK1 as their mode of transport. The Cambridge was also considered a car for the upper class due to its price.

Italy produced the Fiat 11 and 12 which became very popular family cars. France also put out Simca Aronde which caught the market.

The 203 and the VW Beetle had excellent road holding abilities compared to the rest of the popular cars.

The Peugeot 403 came in later, but this was more expensive than the average vehicle.

The Buick, Cadillac, Pontiac, Chevrolet and Plymouth, the American cars, were the other vehicles used by the rich which were not rare sights as there were no petrol crisis as today and the fairly rich could afford to purchase one of those.

The Studebaker was another vehicle which could be seen along the roads of this country at that time. The Benz 170 also came to Sri Lanka then followed by the 180, 190 and 200.

The Jaguar, which was British, was also popular in Sri Lanka along with the Humber Hawk. The Rolls Royce was also an excellent vehicle used by the Governor General at that time, but very rarely seen on the Sri Lankan roads.

Now all these American and British Marques have disappeared other than Mercedes Benz which is now ruling the upper class car market.

With the advent of the oil crisis in the 70’s these magnificent beauties disappeared almost totally from our roads, and the American and the British car market gave way to the Japanese vehicles. Now the trend continues with Indian and other Asian vehicles giving a tough fight to Japanese models.