Wednesday, 4 December 2013 00:00
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By Uditha Jayasinghe
Resolutely burnishing Sri Lanka’s Foreign Direct Investment (FDI) numbers, the Government yesterday tagged China as Sri Lanka’s largest foreign investor, accounting for 24% of the inflows for 2013 that have added up to $ 1.2 billion so far this year.
The Government has set a target of $ 2 billion in FDI for 2013 and as of November has achieved $ 1.2 billion.
Investment Promotion Minister Lakshman Yapa Abeywardene told media companies that China accounted for the largest amount of FDI into Sri Lanka followed by Hong Kong with 12%. Singapore came third in line with 10% while Netherlands and Malaysia rounded out the top five.
“We are very satisfied with the FDI progress this year. Last year FDI was $1.2 billion; we have already matched this amount and are confident of exceeding it by December. This year FDI created 10,000 additional jobs in Sri Lanka,” he said. At the end of 2012 there were 1,700 Board of Investment (BOI) projects providing employment for 476,500 people.
While 31% of the FDI was for manufacturing, 19% was for port terminals and 17% for telecommunications.
Property development received 13% of the investment while hotels and restaurants grabbed 6%. In contrast agriculture, IT and Business Process Outsourcing (BPO) industries only got 1% each of FDI.
“In 2013 the BOI approved 118 FDI projects with a combined value of $ 1.9 billion. Of these 105 projects have had their agreements signed while 55 have begun implementation,” he added.
Such statistics show that less than 50% of the approved projects got off the ground in 2013 and only one-third of the nearly 28,000 projected jobs were actually created.
China and Sri Lanka had also exchanged 15 delegations during 2013 and Abeywardene expressed confidence that the relationship between the two countries would continue to grow.
Over 100 Chinese delegates also participated in the Commonwealth Business Forum (CBF) held last month on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM), where deals amounting to over $1.5 billion were signed with Chinese companies.
During CBF, China Harbour Engineering Corporation signed a $ 640 million deal to build two hotels and a golf course in Sri Lanka.
China Communications Construction Company (CCCC) also signed preliminary agreements to build a port city, redefining the shoreline of capital Colombo at an investment of $1.3 billion.
Hong Kong-based AVIC International Engineering will build a mixed development project worth $ 259 million. That agreement was also signed during CHOGM.
Investment Promotion Ministry Secretary M.M.C. Ferdinando insisted that Sri Lanka was on track to meet its goal but acknowledged that the country would need to attract at least $ 3 billion in investment to meet an 8% growth target. By 2020 Sri Lanka would need to attract at least 5% of GDP through FDI to maintain high growth.
