Infrastructure open for private investment
Senior Minister Dr. Sarath Amunugama said that Sri Lanka welcomes
private investments in infrastructure development and the Colombo South
Port is an ideal example that blue chip companies are investing in Sri
He said that private investment in highways and other sectors too are
welcome. The lack of private projects coming in is not due to the
government’s policies but because the private sector in Sri lanka is
weak and ‘ dead scared’ to start such new projects. The Minister was
addressing a seminar organised by the Council for Business with Britain
held last week. Minister Amunugama accepted that the government failed
to achieve the FDI target, US$ 1 billion last year and only around US$
600,000 foreign investments were achieved. Amunugama who held the
portfolio of Investment Promotion over several years under the present
regime said that corruption and other weaknesses of the investment
promotion agency BOI is one reason for the failure.
He said that Sri Lanka has become the safest destination for
investors in the South Asian region. The situation has reversed and the
security situation in neighbouring countries such as India, Pakistan as
well as Thailand has deteriorated. Colombo is becoming a greener and
cleaner city. Sri Lanka provides all facilities for investors on par
with any country, Vietnam, China or India to attract FDIs. Already huge
investments are coming in to the tourism sector for construction of new
hotels and expansion projects. IT, Banking and Financial Services are
the other sectors that the government expects new investments for, in
the coming years. “We expect FDI inflow to pass the US$ 1 billion mark
this year,” he said.
Neighbouring a fastest growing economy in the world India, Sri Lanka
has the advantage of becoming a financial and service hub. The growth
stories of Singapore that neighbours Malaysia and Indonesia and Hong
Kong neighbouring China as well as the rapidly developing Mauritius
neighbouring growing South African economies are similar.
Commenting on the interest rate policy he said that after long years
our interest rates are higher than inflation and the government is
attempting to maintain a positive interest rate.
A few years ago inflation was over 25 percent and now it has reduced
to 5 per cent. Maintaining an interest rate and inflation is a difficult
balancing act. We are committed to maintain free market economic
policies. Even under difficult conditions with massive capital outflows,
Sri Lanka did not restrict capital repatriation. This policy is now
giving dividends and capital is flowing in today.
The Minister said that although the heavy rains caused floods and
severe damages in most parts of the country the positive side is that
huge hydro power capacity accumulated with all the reservoirs being
filled to their full capacity.
The estimated value of this hydro power capacity is over US$ 2
billion, he said.