Former BOI Chief to emphasise on conducive legislative framwork to attract more FDI

31st ICA National Conference

Managing Director of HSBC Private Bank in Asia and former chairman of the Board of Investment (BOI), Arjuna L. Mahendran will stress on the importance of the private sector coming together to lobby the Sri Lankan government to improve the legislation and policy measures for attracting Foreign Direct Investment (FDI),

within a framework of empowering local firms and local business sectors, thereby maximising the creation of value-addition for the country’s economy, when he addresses the 31st National Conference of the Institute of Chartered Accountants of Sri Lanka (ICASL) later this month.

Nissanka Weerasekera, Regional Managing Partner, South and Central Asia of Aureos Capital; Dr. Koshy Mathai, IMF Resident Representative to Sri Lanka and Maldives; Don La Guardia, Principle partner of Logan Rockefeller Global in New York; and veteran consultant Ranjith Fernando also will complement the session at the panel discussion.

Mahendran, who heads a team of 200 investment professionals catering to the wealth-management needs of clients across the Asia-Pacific region, is scheduled to speak on the topic ‘Attracting Foreign Direct Investment – Opportunities for the Sri Lankan Corporate’ at the conference scheduled from 28 to 30 October, 2010 at the Waters Edge in Colombo. He will use his session as a platform to formulate a well-defined role for the local private sector to transform itself into becoming a major player in attracting FDI into Sri Lanka.

The international backdrop to attracting foreign direct investment (FDI) into Sri Lanka has never been better. The end of the civil conflict, support from international lenders, a booming stock market and a stable government offers an opportunity to attract significantly higher FDI inflows than ever before. This opportunity affords the Sri Lankan private sector to make a significant contribution to the growth of the economy.

The government has stated that it will change the investment incentive regime to a ‘level the playing field’ between incentives offered to foreign companies and those available to local firms expanding their businesses. This is expected to take place within an environment of reducing tax exemptions and focusing on improving the physical and policy environment for doing business in Sri Lanka.

However, during his session, the former BOI Chairman will question whether Sri Lanka should rest on its laurels in the tourism and agro-industrial sectors or should the government policy look into supporting and promoting the resurrection of pioneering industries. He will also emphasise on the role of the export processing zones (EPZs) in fostering new industries and technologies that would not emerge if not for government provision of superior infrastructure and policy support.

Mahendran will also question whether the cost of basic industrial inputs such as electricity and water are competitive by international standards? If not, is the continuation of tax concessions necessary to compensate for a relatively high cost structure for various industrial sectors? And delve on a medium-term solution to this problem.

He will also examine whether the dearth of technically qualified supervisory staff in several sectors should be remedied and wether this dearth is a real problem towards forging ahead.  

He will analyse whether there is a need for a more institutionalised means of policy coordination between the private sector and government? Or does the current ad hoc interaction between the government and various trade and industry chambers provide sufficient input to the process of policy formulation?

Mahendran is an industry veteran whose career spans a period of 29 years in both private companies and public sector organisations.  

During his time as Chairman/Director-General for the BOI of Sri Lanka, he was responsible for attracting and facilitating inflows of FDI to Sri Lanka. For his instrumental role in re-defining the BOI of Sri Lanka and driving its strategy, he was named a runner-up in Euromoney Strategic Direct Investor’s “CEO Lifetime Achievement Award” in 2003.

Prior to joining the BOI, Mahendran was the Director and Head of Economic Research (ASEAN and South Asia) at SG Securities. He led an award-winning team of research analysts and economists in covering stock market asset allocations, providing economic intelligence and forecasts as well as in-depth analysis of countries in the ASEAN region and the Indian sub-continent.

Mahendran is often sought-after by the media for his views on markets. This includes appearances on CNBC, CNN, BBC, and comments in Bloomberg, The Financial Times, Asian Wall Street Journal and Forbes magazine.