Sri Lanka should tap South Asia investment potential: Govt.

By Malik Gunatilleke

Sri Lanka has the edge over other markets in South Asia in terms of investment potential, the Government stated yesterday.

Speakingat the South Asian Investment Conference (SAIC), organised by the Colombo Stock Exchange (CSE) in association with the South Asian Federation of Exchanges (SAFE), Finance Minister Ravi Karunanayake stated that in comparison to some of the capital markets in Asia, Sri Lanka could be termed as small but the qualitative aspects and the investment options in existence could give it the edge over other markets in what was recently named the fastest growing region in the world.

“The confidence of investors will rest not only on growth rates but also will be based on market integrity, good governance and transparency coupled with political stability and political will to embrace investment with the right spirit,” he stated.

Minister Karunanayake also emphasised that the Government has committed itself to strengthen the revenue from the country’s capital markets to ensure good governance and transparency.

“It is hoped that the positive aspects of the good governance emanating from the highest levels of governance of Sri Lanka will cascade down to all parts of society and all institutions including the Colombo Stock Exchange,” he added.

The Government hopes that its focus on good governance and transparency would encourage extended global participation while improving Sri Lanka’s position in the global rankings.

The Minister also pointed out that the Government will lay further emphasis on enforcing contracts, getting credit and resolving solvency issues which he stated were lower on the scale from a Sri Lankan viewpoint.

Despite FDI not growing as expected in the past few years, he revealed that the Colombo Stock Exchange had performed comparatively well in 2014 and according to Bloomberg was ranked the fifth best performing market in the region and the sixth best in the market world.

“It could be said that the present economic climate is equally good or better than our climatic conditions which are envied the world over,” he added.

Sharing similar views on the matter, Deputy Minister of Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs Dr. Harsha De Silva stated that the aim was to accelerate economic integration in South Asia by building strong capital market indicators and to promote South Asia as an important asset class and an investment destination.

He said that all the countries in the region face similar problems and challenges pertaining to taking people away from poverty and creating a strong middle class.

“The issue is that you gentlemen and ladies come together and create instruments for the rich, for people who can invest millions, but we forget to create instruments for the small and medium enterprises,” he stated.

He added that even the smaller economies are capable of competing and that the deliberations of the forum should concentrate on drawing up the necessary structures, rules and regulations to facilitate healthy competition and bring prosperity to the region.