and import. During the 1970-1977 period, the average annual economic growth rate is less

labor-sending country in Asia. Globalization helped to improve foreign employment

independence in 1948, Sri Lanka followed different changes until 1977. FDI flows

IntroductionWe are unable to find a universal definition for the term of Globalization. But everyone shouldknow the scientific definition of globalization because it is affected by everyone in the world.Human behavior also influenced by the process of globalization.“Globalization as a state of the world involving networks of interdependence at multi –continental distances with multiple economic/financial, political, national security,environmental, social/cultural, markets and individuals” (Friedman and Keohane)There is a lot of definitions available for the globalization. The world is narrowing thethe geographical distance between societies through the process of globalization.Effectiveness of the globalization depends on the two policies. They are whether the country isopened to the world and barriers to trade for the capital, goods, and services. A country whichopened to the world and there are lower barriers for money, products, and services to flow,Globalization will useful in that country. Efforts on reducing broader tariffs and other restrictionson the movement of goods and services, establishing a rule-based system on trade to help theprocess grow faster by World Trade Organization and General Agreement on Tariff and Trade.There are a lot of benefits that can be gain from globalization. Preliminary can be mention three mainbenefits. First one is the globalization offers access to a large market. Secondly, it increasescompetitions among countries, and thirdly it facilitates technology and knowledge to countries.Globalization in Sri LankaBefore 1977 Sri Lanka experienced self – sufficient economic system which categorizes as amercantilism international trade policy. In that time Sri Lanka was a leading global tradingcountry at a hub in the Indian Ocean. During this period, Sri Lanka was influenced to shift to exportthan 3% also the country experiences high unemployment in that period. In 1972 Sri Lankaexperienced a 24% highest unemployment level and during the period from 1970to 1977 averageunemployment rate was17%. In 1977 Sri Lankan economy disregarded the self – sufficienteconomic system. The export and import economy has both advantages and disadvantages.However, Sri Lanka continuously earned a deficit trade balance. Sri Lanka introduced an opena market economy with trade and FDI liberalization in 1977 and became the most open economyin South Asia.During the first phase(Period from 1977 to 1982 ) of Globalization, the Sri Lankan economyexperienced high economic growth and low unemployment by achieving internal balance. But inthe second phase (Period from 1983 to 1994) inflation was high, and also the very highunemployment was recorded. After the year of 1994 Sri Lankan economy is facing a lot ofeconomic problems. But globalization process provided many opportunities to Sri Lanka bythe side of education, infrastructure, technology, etc.Globalization IndexKOF Globalization index is a primary index for measuring globalization. This introduced in 2002.This index covers the economic, social, and political dimensions of globalization. There are threedimensions used in this index. They are Economic, Social, and Political globalization.The dimensions of KOF index are described as follows,❖ Economic globalizationThere are two dimensions in the Economic Globalization. First one is Actual economic flow itincludes foreign direct investment stock as a percentage of GDP, Portfolio investment, and dataon trade provided by the World Bank. The second one is restrictions to trade and capital using hiddenimport barriers, mean tariff rates, taxes on international trade, and capital account restrictions.❖ Social GlobalizationKOF index classifies social globalization in three categories. First one is data on personalcontacts. It includes telephone traffic, transfers, international tourism, foreign population, andinternational letters. Second sub-index of information flow is measured the potential influx of ideasand images. It includes several Internet, television, and newspaper users. Third sub-index isdata on cultural proximity. It provides several McDonald’s Restaurants, Number of Ikea, andtrade in books.❖ Political globalizationTo find the degree of political globalization their Number of embassies in-country,membership in international organizations, participation in U.N. Security council mission andseveral treaties.Impact of Globalization to Sri LankaTourism IndustryTourism is one of the growing industry in Sri Lanka. It provides many job opportunities to SriLankan people. The reasons for the growth of the tourism industry are rising global incomes, increasingleisure time, a rising world population; fall in real transport, reduced travel time, andglobalization. The tourism industry is heavily influenced by economic and political stability and aswell as by terrorist threats. As an example in Sri Lanka, tourist arrival is declined in the past warperiod. 182,620 in 1987 but in 1982 tourist arrival is 407,230. But 1983 started a civil war, and itaffected the reduction of tourism arrivals to 182,630. In 1990 recorded tourism arrivals are297,888 and started to increase tourism arrivals at a stable level with small fluctuations. But afterthe 2009 tourism arrivals are increased rapidly with the end of civil war in 2009. That peacefulsituation affects the global tourism attraction to Sri Lanka. Government promotes thetourism sector by promoting the industry using advertising.Trade BalanceWith the liberalization in 1977 exports and imports are increased by a considerable amount. It isimproved the balance of trade in Sri Lanka. In the year 1977 US $ 86.31 Million trade surplusshows in Sri Lankan economy. Also, this indicates an increasing pattern of export and import. Importsare growing fast than exports. Sri Lankan economy experiences a growing trend of tradedeficit. Because of interrelationship and interdependency among countries in the world got anopportunity for trading with other countries as a result of globalization. Sri Lanka signed the firstbilateral agreement was ISFTA. Sri Lanka has entered into several trade agreements such as,South Asian Free Trade Agreement (SAFTA), Asia-Pacific Trade Agreement (APTA), Indo-SriLanka Free Trade Agreement (ISFTA), Pakistan -Sri Lanka Free Trade Agreement (PSFTA).UnemploymentBefore 1977 in Sri Lanka recorded a high unemployment rate but after the liberalization thatimpacts to the globalization unemployment in Sri Lanka declined gradually. For example, expandof the tourism industry, garment industry, etc. Because of the foreign employment, Sri Lankanunemployment level is reduced as a result of globalization.Foreign EmploymentWith the liberalization, the Sri Lankan economy was opened to the world. Labor migration isa moment of people from one country to another with the purpose of unemployment. Globalizationbrought all countries more closely to each other in the world. It created many opportunities for SriLankan people who are seeking to get knowledge, job opportunities, and educationalopportunities. Because of that, labor migration is increased with globalization. Sri Lanka is a significantdeparture year by year because it grew the interrelationship between Sri Lanka and othercountries in the world, and it allowed increasing the demand for Sri Lankan laborforce. Foreign employment from 1988 to 2007 female overseas work is more significant than a maleinternational job. In 2016 total departure for the external job is 242,930.Foreign Direct InvestmentDuring the British Colonial period from 1815 to 1918the UK was the primary source of foreigndirect investment in Sri Lanka. British FDIs forecasted to the development of infrastructurefacilities that were required for their investment in the plantation sector of the country. After achievingnegligible as a percentage of gross domestic capital formation until the late 1970s. Foreign directinvestment during the period from 1970 to 1977 was the only US $ 0.5 Million. And it was aroundonly 0.2% Gross Domestic Capital Formation. With introducing liberalization policy in 1977there was a rapid increase in FDI because of the global attraction to Sri Lanka.Because of the civil war started from the year 1983, the upward trend of FDI trend was disrupted.With the end of the civil war in 2009, Sri Lankan foreign direct investment was grown rapidly.