Sri Lanka has to re-plan and simplify its approval process to woo more Foreign Direct investments and the Board of Investment (BOI) has to take the lead, said Prof. Sunimal Abeyratne.
He was speaking at the Business Dialogue event hosted by the Advocata Institute on Wednesday at Queens Hotel, Kandy.
He said that BOI claims that they are a ‘one-stop-shop’ but truly they are ‘one of the stops’ and this has to change.
A foreign investor is forced to move from one ministry to another and Government officials at these places also delay them. “In contrast other countries have better systems and approvals are much faster.”
Due to this, Sri Lanka, despite offering attractive tax holidays and other incentives, gets around USD 1 billion annually while other countries such as Singapore attract around USD 130 billion.
Last year China attracted the highest FDI which was around USD 180 billion while India too attracted over USD 50 billion.
He said, “When Apple expanded one of their plants to Karnataka, India, their operation alone get around USD 12 billion in exports per year while Sri Lanka average total exports are around USD 12 billion. One main reason for this is the lack of FDIs.”
He said that Sri Lanka is facing a payment crisis due to loan repayments with most of them having to be paid in US dollars. “And to service this debt the county needs dollars and the best way for this is attracting more FDI.”
Sri Lanka has to create a better investment climate to reach the target of being a developed country by 2028, Prof. Abeyratne said.
He said the ‘Rule of law’ too should be maintained sans political influence to infuse investor confidence. “Sri Lanka still has laws that should have been changed 45 years ago.”
“Investors don’t like to dump money when they don’t have faith in a country and hence a conducive environment should be created for them.”
He also said that long-standing policies should be maintained and sometimes you suddenly see Governments making changes to taxes with the tagline, with effect from midnight. This cannot continue.”
