Capital investment, links to global economy key: IFC CEO

By Uditha Jayasinghe

Sri Lanka needs to promote capital availability to encourage investment and find ways to link with the global economy to achieve sustainable growth, says the International Finance Corporation (IFC) under the World Bank.  

Jun-Youg CAI Interview - Pic by Daminda Harsha Perera

IFC Executive Vice President and CEO Jin-Yong Cai during a short visit to Sri Lanka last week told the Daily FT in an exclusive interview that the private sector is challenged by lack of long term finance and infrastructure constraints.  He especially highlighted the need to concentrate on SMEs.

“One major constraint in our view is the infrastructure, particularly if you want to grow the economy at eight per cent on consecutive years. We need power, transportation, water and waste treatment. These are critical for what I term ‘support infrastructure’. We still have room to go and IFC would like to be involved in that process.”

He added that long term finance for Small and Medium Enterprises (SMEs) also needs to be increased. Jin-Yong pointed out that decreasing loans from international banks as a result of the global financial issues will impact developing countries such as Sri Lanka and called on the Government to develop capital, equity and bond markets as alternative sources of capital.

The IFC CEO also called for increased transparency and good governance to attract investment – for foreigners and locals alike.        

“I think Sri Lanka has made good progress but recent events can certainly create a question among investors. My own view is that transparency is important to facilitate private investors, not only global but also domestic investors.”

He also stressed that the country needs to work on identifying its comparative advantage to link with the global economy.

Seee full interview on Page 5