BOI to speed up development

by Lalin Fernandopulle.

BOI has collectively reviewed its investment strategy to fit in with the new priority sectors articulated by the Government, said Chairman / Director General, BOI, Jayampathi Bandaranayake in an interview with Sunday Observer.

Excerpts :

Q: What measures have you taken to improve the BOI structure ?

A: BOI has collectively reviewed its investment strategy to fit in with the new priority sectors articulated by the government. These are tourism, urban development, IT/BPO/KPO, agriculture, fisheries, dairy and agri processing, education and knowledge.

The BOI organisation and structure must be designed to support these priority sectors and organisational changes will be made in pursuance of these objectives. The changes planned are intended to be pragmatic, cost effective and will facilitate the achievement of the targeted investments. Importantly, in doing so we will also be mindful of giving substantial responsibilities and empowering the staff of the BOI to contribute to this collective effort of national economic development.

Another key element of the reorganisation is how we work better to coordinate and complement the work of other State agencies such as Customs, Inland Revenue, Exchange Control, Central Environmental Authority, Urban Development and many others for the achievement of the national goal of speedy economic development.

To succeed in this regard the BOI must be able to identify the bottlenecks that slow down the process.

Towards this end we have begun to ascertain from our customers as to how they view us and what their expectations are. We have therefore initiated a process of stakeholder dialogue in the last few weeks with representatives of the dairy, housing development, tourism and the IT/ BPO sectors. These have also been with professional groups such as leading accounting firms.

This has led to a useful exchange of ideas as to how the respective stakeholder groups can meaningfully contribute to national economic development and our plans for the different sectors will incorporate their views and ideas as well.

Q: How much FDI are you targeting this year and how far have you achieved it?

A: There has been a commitment by the BOI in terms of the plans already in place to target for 2010 a total of US$ 1 billion. Last year the total for FDI was US$ 602 million, when compared to US$ 889 million in 2008. The global recession impacted on the reduction of FDI last year and will no doubt impact on this year's achievements as well.

However on the positive side, there has been an interest in Sri Lanka since the return of peace and stability, the general economic situation in the country has greatly improved as well.

We hope to revalidate the current year's targets with the ministry and connected organs of the State once our process of consultation and review is completed.

Q: What are your views on CEPA and is the fear about signing it justifiable?

A: This matter is currently under discussion and I have no doubt that a solution will be arrived at regarding CEPA that will need to take into account both the Government's desire to extend our partnership with India and at the same time the concerns of local industrialists who have expressed concerns over difficulties they have faced when trying to enter Indian markets.

Whilst in the long term, Sri Lanka's linkage with the Indian economy will be inevitable, the process has to be planned carefully to ensure that all stakeholders are treated equitably. The Indian side needs to take a strategic view in this regard, as this is a precursor to the integration of the South Asian block of nations.

Q: Who are the new investors in the tourism sector and what is the potential for this sector ?

A: We are very positive about the future of the tourism sector. All indications that are there will be a tourism boom in Sri Lanka. The growth of the month on month arrival figures against last year is one such indication.

In the first half of this year (2010) the BOI approved 36 hotel projects. This is significant as in the whole of 2009 a total of 53 projects were approved.

These projects include, refurbishment of existing hotels.

What this means is that many of the hotels in Colombo and other cities will be further upgraded to improve what's on to the tourists.

I am aware that a master plan is being drawn up for the acceleration of the process of constructing and adding to the hotel stock of the country.

It is estimated that we should work on the increase of hotel rooms by 35,000. This number cannot be achieved by allowing the sector to grow organically.

The new impetus will identify tourist zones under which the construction of new hotels will be expedited. If we do not do so we will not be able to attract many tourists that will want to explore the offerings which are gradually being known in the world.

There will also be a short-term strategy of upgrading all forms of tourists hotels and guesthouses to cater to the short-term demand pending the construction of the bigger hotels which will take about 2 to 3 years.

Tourism authorities are stressing the importance of rethinking the tourism product beyond the construction of hotels.

They quite rightly stress on the need to understand that in the future investors will seek to develop that sector with projects in specialised segments such as leisure, sports activities, medical and shopping.

That's the way our tourism industry will go. The BOI for its part will attempt to energise domestic industries that can meet some of these opportunities such as the domestic handicraft sector which will create useful opportunities for people across the land to commercially benefit from the use of their talent.