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| Sunday, 29 December 2002 |
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FDI vital factor in development -Karunanayake Foreign Direct Investments (FDI) are the most vital factor in achieving the country's growth rate targets of eight per cent to 10 per cent, as the present 20 per cent savings rate of our people cannot facilitate such a move Commerce and Consumer Affairs Minister Ravi Karunanayake told the seminar on Multilateral Investment Agreements jointly organised by the WTO and Commerce Department in Colombo. The Minister said that for countries like Sri Lanka with inadequate resources, foreign investment is the only instrument available to obtain necessary capital and technical know-how for new industries. "Since 1994, global FDI flows increased on a massive scale at the rate of 26 per cent per annum. But the developing world gets only a marginal amount whereas the larger portion of FDI goes to the developed countries. For example, in 1999, 73 per cent of the FDI went to developed countries whereas developing countries received only 24 per cent of the world FDI flows," he said. The minister added that developed countries expect developing countries to create a conducive environment by protecting their investment in developing countries, whereas many developing countries in the past were largely skeptical and not convinced of the benefits and rather apprehensive of the outcome of such investments. "After two decades of apprehension, developing countries have now realised that he positive results outweigh the negative factors created by foreign investments. The Doha Declarations adopted by the World Trade Organisation (WTO) Ministerial Meeting recognise the importance of supporting developing countries in the form of technical assistance in capacity building," Karunanayake said. He said the Agreement on Trade Related Investment measures under the WTO Agreement created the base, giving broad outlines, discouraging trade, distorting investment measures by the member countries. The Doha agenda has given renewed importance to the area of investment and moved it into higher gear, aiming at a Multilateral Agreement on Investment. He said seminars of this nature would provide Sri Lanka with in-depth knowledge in formulating its position at the next WTO meeting to be held in Mexico and would benefit the politicians, official, and the civil society. "I propose to the Board of Investment and to the Department of Commerce to form a special core group to study the subject with the additional knowledge that you will get from this seminar," the Minister added.
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