Lanka attracts $ 870 m in FDI

Sri Lanka has received US$ 870 million in Foreign Direct Investment during the first nine months of 2013, through 55 projects which have launched commercial operations in the country.

This is a 41 percent increase over the corresponding period of the past year,” BOI sources said. A majority of the investments have come into the manufacturing sector amounting to 31 percent of the total FDIs received. The port sector has received 19 percent, telecom - 17 percent and property development has garnered 13 percent out of the total FDIs realised during the first three quarters of 2013.

China ranks as the single biggest investor bringing in 24 percent of the total investments.

Hong Kong follows with 12 percent, Singapore with 10 percent, Netherlands eight percent, Malaysia and UK bringing in seven percent, each, and India five percent.“FDI has been slow. And even now our projections have FDI growing from about $375 million in 2010 to $725 million in 2011.

That's a near doubling, but $725 million for an economy of Sri Lanka's size is still quite a low figure.”

Analysts said that though there is a relative increase in FDI inflow, Sri Lanka has still failed to attract a significant slice of global FDI outflow of around $ 1.33 trillion in 2012 compared to its competitors such as Vietnam and India.

Before 2009 there were many reasons for low FDI attraction such as terrorism and poor infrastructure.

However, even after the end of terrorism, rapid growth of infrastructure, sound macroeconomic conditions and huge government support the FDI inflow remains low.

In the 2014 Budget the government has focused on this issue and especially the tax policy and other steps to improve the country's Doing Business indicators.