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Cabinet Co-Spokesman and Minister Bandula Gunawardena
By Charumini de Silva
The Government will soon unveil a comprehensive package to boost foreign direct investments (FDIs) and develop key industries, a top Minister disclosed yesterday.
“President Ranil Wickremesinghe told the Cabinet that steps were being taken to introduce a fully-fledged package to boost FDIs — essentially, creating new business models to thrive,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday.
Sri Lanka is looking at targeted initiatives to reach $ 2 billion this year from $ 1 billion in 2022.
He said serious reforms are necessary not to repeat same strategies and get the same results.
Acknowledging that investors who are keen on investing in Sri Lanka are not getting reassurance from the State and financially like in other countries, Gunawardena insisted on changes in the legal framework as well as political barriers.
He said political instability, policy inconsistency, red tape and bureaucracy as well as the complex rule of law have discouraged investors from establishing in the country.
“Sri Lanka has lost many opportunities due to investors’ no confidence. This is why investments from reputed international institutes have moved to more stable countries such as China, India, Vietnam and Malaysia to name a few,” he said.
The Minister said Sri Lanka’s value proposition needs to get transformed to compete with other FDI destinations.
As per the Board of Investment, effective economic structures, shorter lead times for approvals, consistent trade policies, ease of doing business indicators and online markets are must-focus areas.
The apex agency for FDIs in the country aims to attract 100 technology services companies with a new product, a targeted program to get 50 existing BOI companies to reinvest, setting up industry advisory councils for the four thrust sectors for leads, policy tweaking and promotion, digitalisation of key investor services, aggressive promotion of the destination, key account management and modernisation of existing zones to meet with international green standards.
The Government aims to brand Sri Lanka as an investment destination, by improving investor care, accessing new markets for our products and services, communicating better with the world and growing the market via new trade arrangements.
Despite experts encouraging the Government to move away from incentives-based means of competing to attract FDI favour, and focus more on rules-based means of competing.
They also pointed out that countries most successful in attracting FDI are also among those that best meet the requirements for good governance and credibility to incentives programs in the eyes of investors, by making them likely to be seen as sustainable.
“Top-tier FDI investors want stable, predictable and transparent rules. ESG-focused investors is another clear possibility,” they added.
They also noted that aftercare service, professional responsiveness to inquiries and competitive staff possessing the best knowledge of new-age industries and language diversity are key competencies to attract and retain FDIs that Sri Lanka should thrive on post-crisis revitalisation efforts.
