Record-breaking inflow of FDI in first quarter

Sri Lanka has witnessed a record-breaking inflow of Foreign Direct Investment (FDI) in the first quarter of 2011, Senior Minister for International Monetary Cooperation Dr Sarath Amunugama disclosed yesterday.

“We received foreign direct inflows of $236 million, growth of almost 160 per cent, in the first quarter of 2011 representing the highest-ever quarterly inflow of FDI into the country”, Dr. Amunugama told reporters at a Sri Lanka investment roadshow in Dubai, UAE.

“The increasing investor confidence in the country in the post-conflict era is underscored by the surge in FDI flow. With more public and private sector investors from abroad showing keen interest in the country, Sri Lanka is on course to attract $1 billion in FDI in 2011, and up to $2.5 billion by 2015,” he asserted. In contrast, Sri Lanka received $889 million in FDI in 2008.

He noted that the economy was bouncing back with a projected nine per cent growth in 2011, also a record. He predicted that the country’s new investor-friendly laws would help attract more global investors into sectors including infrastructure, IT, tourism and irrigation.

The minister said the government’s industrialisation strategy calls for the expansion, diversification and upgrading of its industrial base, as well as promotion of foreign investment in all sectors of the economy.

He pointed out that opportunities were available in infrastructure investments include housing and property development, hospitals, voice and data communication systems, public transport and environment.

Investments in the power sector, ranging from mini-hydro systems to large-scale generation plants were also welcome. Foreign ownership up to 100 per cent is allowed in these ventures.

The minister said the revival of the tourism industry is the key contributor to the FDI surge. “We are on target to receive one million tourists this year,” Amunugama said. Sri Lanka’s tourism arrivals rose 43.5 per cent in March 2011 to 75,130, with steep increases seen from South Asia and several European generating markets.

The tourism sector has already received $ 1.2 billion in foreign direct investments for the period 2005-2011 and it hopes to attract $5 billion by 2016 when the industry is targeting to achieve 2.5 million tourist arrivals.