Lanka’s ICT sector will benefit from EU investment upsurge: German envoy

31 March 2015 05:25 am - 0     - {{hitsCtrl.values.hits}}

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By Chandeepa Wettasinghe
Sri Lanka could see an upsurge in foreign direct investments (FDIs) from the European Union in the near future, especially in the ICT sector.
“The West is thinking of investing in Sri Lanka. Why? It’s because they are being treated properly again. I just came back from Germany, and they are really looking at Sri Lanka,” German Ambassador Dr. Juergen Morhard told Mirror Business recently.
However, he expressed that the European business community does not put total faith in political changes when investing, instead evaluate how the environment is conducive to growth.
“What you must understand is that, for foreign investors, they don’t care about the change of government. What they want are policies. Now you have a change. You must build on it and keep putting out policies that work,” Dr. Morhard added.
He made these comments on the sideline of Germany’s eves_IT AG announcing their intentions to expand in Sri Lanka.
Notable EU companies have already established themselves in Sri Lanka. Sweden-based global IT giant IFS AB has been conducting a significant portion of its innovation here, while the world’s third largest shipping line, the French CMA-CGM Group this year invested US$ 2.5 million to set up its IT business process outsourcing in Sri Lanka.
Reports quote EU Ambassador to Bangladesh Pierre Mayaudon recently saying that the EU is interested in investing in IT and Shipping among others, in Bangladesh, sentiments which could reflect on Sri Lanka as well.
Funds for European companies to use as FDIs are expected to come from the credit boom seen in the past 2 months.
Since the recovery of the Eurozone had been stagnant since 2011, the European Central Bank had been promoting various monetary policy tools, including quantitative easing to decrease interest rates, which have come to fruition.
ECB President Mario Draghi was last week quoted as  saying that businesses will renew investments, even into ventures that were not seen as interesting in the past.
“The easing of lending conditions is progressing hand-in-hand with a resurgent demand for credit to finance business investment,” he further added.
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