US companies to invest in Sri Lanka boosted by Govt.’s anti-corruption focus

Sri Lankan Ambassador to the US Mahinda Samarasinghe 

• Business Roundtable with Sri Lankan Ambassador Mahinda Samarasinghe leads to positive interest among US corporate entities

Potential international investors tend to be fired up by a nation’s transparency, a positive anti-corruption stance, and healthy respect for investor interest.  

This powerful combination of factors blended in the atmosphere at the Business Roundtable with Sri Lankan Ambassador to the US Mahinda Samarasinghe, which took place in Washington D.C. on 11 March, organised by the US Business Council for International Understanding in collaboration with Washington Global Advisors.

The Roundtable included over 25 representatives of corporate entities in Washington D.C., including a couple of former US Ambassadors who served in Sri Lanka in the past and who now serve on Boards of major US companies. 

The participants were mindful of the major political changes that have recently taken place in Sri Lanka and the US. In fact, their interest in investing in Sri Lanka appeared to have reignited because of the political changes in Sri Lanka; in particular, the focus on anti-corruption of Sri Lanka’s President Anura Kumara Disanayake. 

At the outset of his introduction to the discussion, Ambassador Samarasinghe drew pertinent reference to the dire financial crisis Sri Lanka faced in 2022, and the perception of long years of economic mismanagement, nepotism and corruption, and governance sans checks and balances. He spoke of his own efforts to throw a lifeline to Sri Lanka by initiating the initial engagement with the International Monetary Fund (IMF) by proposing to the IMF Managing Director to send a high-level IMF team to speak with the then President, which led to the eventual Extended Fund Facility (EFF) program, and expressed his appreciation of “the enormous support” the country received from the US during the process, especially the vital role the US Treasury played in Sri Lanka ultimately securing the EFF.

The Ambassador traced Sri Lanka’s remarkable recovery from negative growth to its current positive growth, the anticipated 5% growth in 2025, and its current capacity to fund almost four months of imports. He drew attention to the vigorously renewed investor interest in the country following this miraculous recovery. Moreover, he said, the IMF is endorsing Sri Lanka as a model of a country committed to continuity of economic policy with unfazed confidence in the private sector as the country’s engine of growth, despite a change of Government and changes in political leadership. The Ambassador made a compelling case for Sri Lanka’s attraction to potential foreign investors, focusing on current political stability achieved through a strong mandate from the people for system change and anti-corruption reform. He also revisited Sri Lanka’s well-publicised pluses to draw foreign investment, particularly its 92% literacy rate, the highest in South Asia, a skilled labour force that never fails to impress foreign investors, the strategic location sitting at the crossroads of the busiest sea lanes in the Indian Ocean, and constitutional guarantees afforded to foreign direct investment (FDI).

Side by side, he also described Sri Lanka’s bold embrace of the free enterprise model in 1977 that opened its doors to foreign investment, a first in South Asia, while other countries in the region promoted closed economies at the time. The Free Trade Zones introduced in Sri Lanka then, thrived and expanded over the years with FDI. Now, the country is proud to claim 15 Free Trade Zones that beckon foreign investors with attractive incentives. The Ambassador said: “We have been in the game long enough to understand that the private sector must essentially be the main engine of growth.” And that commitment has remained unchanged despite the many changes in government over the years. 

The Ambassador spoke of different foreign investment opportunities that are currently available to US companies, and of synergies that could be established through bilateral cooperation to achieve freedom of navigation for the US in the South Asian region. The Ambassador made special references to the port city development, incentives offered such as a 25-year tax holiday, and the oil tank facility in Trincomalee closely linked with the Trincomalee harbour, one of the finest deep water natural harbours in the world, which the British naval fleet in the Indo Pacific used very effectively until the mid-1950s.

Commenting on current enhanced bilateral relations between the US and Sri Lanka, the Ambassador said he is focusing on investment opportunities in Sri Lanka for new export products, and at the same time, seeking investment opportunities in the US for Sri Lankan companies.

The prospect of an iron-clad partnership between the public and the private sectors, for example in State-owned enterprises, appeared to be an attraction to the participating organisations at the Business Roundtable, as an added reason to consider investing in Sri Lanka in the future. 

What stood out as a winner to attract US companies to invest in Sri Lanka is Sri Lanka’s President Disanayake’s intention to digitalise the economy and provide a level playing field to all foreign investors, while ensuring transparency and corruption-free investor dealings at every turn.