BOI: an independent entity

by Lalin Fernandopulle

The Board of Investment of Sri Lanka (BOI), a key cog in wooing investments to the country will no longer be subservient to the Treasury in decision-making and implementing strategies, BOI Chairman Upul Jayasuriya told the Sunday Observer.

The era where the Board had to cow down to the decisions of the Treasury other than those relating to industrial development and sharing of technical know-how, is over.

The task of attracting investment is vested with the BOI and statutory powers would be exercised within the framework of the Law.

“In the past the Treasury, which had no powers to interfere in the functions of the Board, messed around at all times leaving room for practices not known in law.

The BOI is a powerful organisation vested with authority by an Act of Parliament to be a catalyst in driving economic growth through sound investments and creation of employment opportunities,” Jayasuriya said.

It was the prerogative of the President to appoint members to the Board. A separate ministry has been set up for investment promotion due to the busy schedule of the President and the importance laid on the BOI.

Steps have been taken to increase the number of investment zones from two to 12 under the Greater Colombo Economic Plan.

The concept of foreign investment was pioneered by former President J.R. Jayewardene even before India, in 1978.

The concept was mooted in India only in 1993 but India and all the South Asian Nations have surpassed Sri Lanka in investments.Malaysia is a classic example of driving foreign investments and expediting economic growth despite the fact it’s rule of law situation is deteriorating.

“The government has recognised the role of the BOI under the Act and it will discharge its duties within the framework of the law. As far as the investment climate is concerned Sri Lanka offers the best incentives with fast decision-making, tax holidays and concessions and infrastructure facilities,” the BOI Chairman said.“However, the question is what has befallen the BOI and where has it gone wrong? The setting up of a one-stop-shop for investments was only hype. In the past the BOI had to make recommendations to the Treasury Secretary.

“The Treasury Secretary has no status under the law,” he said.

The concept of a one-stop-shop will be implemented within a few weeks in consultation with representatives of the Immigration Department, Customs, Inland Revenue, CEA, Registrar of Companies and Exchange Control.

He said that as far as tax concessions are concerned the BOI offers the best terms compared to all other free trade zones in the region. However, Sri Lanka’s success story is short. So many question as to whether we can reach the target set for this year.

“Many companies have been incorporated and are in the process of being considered. We have changed our culture at the BOI and made it investor-friendly,” Jayasuriya said.

“Achieving the target is not an issue. We have to understand our role rightly. The issue is putting the house in order - from being a regulator to a facilitator,” he said.

“The Board was never intended to be a regulator. We need to change this notion about the BOI and make people believe that we mean business and are open for investments on a level playing field free from corruption with respect for the rule of law,” Jayasuriya said.