Sri Lanka’s big-ticket FDIs remain weak: Bingumal

Wednesday, 12 March 2025 06:15 - - {{hitsCtrl.values.hits}}

Standard Chartered Sri Lanka CEO Binumal Thewarathanthri

Says small-scale FDI pipeline looks promising, but country needs big-ticket $ 400-500 m deals for real impact
Opines frequent policy changes deter long-term investors and hinder FDI growth
States policy stability is essential to improve ease of doing business ranking and boost FDIs
Asserts stable investment laws, land regulations and tax structures are crucial for investor confidence
Claims successive governments focused too much on development of framework for Colombo Port City instead of investor appeal

The Standard Chartered Bank Sri Lanka CEO Bingumal Thewarathanthri yesterday said the country’s big-ticket foreign direct investments (FDIs) remain weak with private sector deals averaging around $ 20 million—well below the half-a-billion-dollar transactions required to make a meaningful economic impact.

Speaking to journalists following SCB’s Annual Global Research briefing, he insisted on policy stability to boost ease of doing business which will eventually reflect on a steady FDI inflows.

“There is a promising pipeline of small-ticket FDIs amounting to $ 20 million, primarily through local investors. But we need big tickets such as $ 400-500 million—to get that quantum leap in our projects,” he said.

A significant obstacle to FDI growth he mentioned was the frequent changes in economic policies.

“Policy consistency is key to draw FDIs and this stability is the key outcome to improve our Ease of Doing Business ranking,” he opined.

He claimed that Sri Lanka has historically altered key policies such as investment laws, land regulations and tax structures—every few years as Governments changed, deterring long-term investors.

“If you look at Sri Lanka’s FDI numbers in the 20-30 years, it came to about $ 20 billion altogether. The best we have seen is the private sector-led investments, in 2012 when Shangri-La investment came through and our Ease of Doing Business ranking at the time was 83. In 2017, we got over $ 1 billion—big ticket investment with the Hambantota port. Those are the only major FDIs we have seen in the recent years,” he explained the struggle to woo large-scale investments.

Although FDI growth remains a long-term challenge, requiring sustained policy consistency and business-friendly reforms, Thewarathanthri, said the organisation process will naturally attract inflows over time.

“Once there is stability, everything else will follow,” he added.

Citing Vietnam as an example that has built its success on policy stability, he said Sri Lanka in contrast struggled because investors cannot rely on a consistent framework.

Beyond policy concerns, he said the country also faces challenges in land accessibility, capital availability and infrastructure readiness.

Thewarathanthri also noted that the successive Governments spent significant time developing a framework for the Colombo Port City project, instead of enhancing its appeal or offerings for the investors—which eventually led to the delay in commissioning.

“Sri Lanka cannot afford to make short-term policy shifts every election cycle. To attract the kind of FDIs that will drive real economic growth, we need a stable, long-term economic policy framework,” he added.

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