The Board of Investment of Sri Lanka recently unveiled its Corporate Strategy for the period 2022 - 2026. This took place during a full day workshop on the organization’s Strategic Framework under the guidance of Chairman Raja Edirisuriya, Director General, Renuka Weerakone and the Senior Management of BOI representing a cross section of all zones and departments within the organization.
Developed by the BOI’s Research and Policy Advocacy Department, the new Strategy Framework outlines Strategic Objectives, Strategies, Goals and the Key Performance Indicators that the BOI team would be working towards over the next five years and is based on the key fundamentals:
The framework was conceptualized to align with the national vision and economic goals detailed in the manifesto of his President Gotabhaya Rajapaksa - Vistas of Prosperity and Splendor.
Working towards the vision to make Sri Lanka the most preferred destination for sustainable investments in Asia, the BOI has made it its mission to respond expeditiously in fulfilling the country’s potential to attract and retain quality investment that will enhance the export base as well as both the quantum and quality of employment while boosting knowledge and skills through the transfer of new technologies and innovation. Against a global backdrop of contracting Foreign Direct Investment (mainly due to the impacts of Covid-19), countries continue to compete aggressively for shrinking portions of an investment pool that is steadily contracting from US$ 1.5 trillion recorded in 2019 to US$ 1 trillion in 2020. This 35 percent drop is 20 percent below/greater than the dip that followed the global financial crisis of 2008/09 and has resulted in a shift in the general trend of global investment towards reinvestment, as MNCs make significant changes to their mid to long-term business plans.
The strategy development involved a country SWOT identifying the best options that would leverage natural strengths such as location, resources and workforce, along with quality of life. Hard factors such as developed infrastructure, sector specific zones and incentives were also evaluated for competitiveness when formulating effective promotion strategies.
Top priorities that emerged were expeditious investor facilitation and the expansion of trade through market access via FTAs and other preferential schemes, while ongoing global developments such as the ‘China Plus One’ strategy and Colombo’s Port City development are expected to further enhance Sri Lanka’s potential as an investment destination.
As depicted above, the BOI aims to deliver 32 percent CAGR in FDI inflows over the next five years with three billion dollars to be recorded as inflows in 2026. To realize this inflow would necessitate building a committed FDI project pipeline circa five billion dollars.
These figures are in line with ongoing initiatives that are expected to enhance Sri Lanka’s attractiveness as an investment destination. Foremost amongst such initiatives is the reimplementation of the BOI’s virtual One-Stop-Shop, to be supplemented by interagency committees for project facilitation. The strategy also acknowledged challenges such as the dilution of authority vested with BOI which has been systematically abrogated over the last 4 decades, a result of which is evidenced by the unstable investment climate that is seen today. Ad-hoc policy changes, lengthy line agency approvals, obsolete labor laws and high utility costs were identified as impacting investor confidence. This has resulted in ongoing initiatives to address some of the procedural impediments through the re-introduction of a One Stop Shop and process digitization in a number of key departments within the BOI.
Consideration of these key factors amongst many resulted in a strategy framework formulated to “attract new investment and re-investments to Reduce Trade Deficit, Create Meaningful Employment, Promote Technology Transfer and Develop Infrastructure”, as its core objectives.
Target investments for each of the four components, along with goals and strategies were then devised and rationalized at a full-day workshop and brainstorming session attended by Department and Zonal Heads and a cross section of Senior Management. Inputs from all participants, based on their own experience and practical knowledge provided the final constructive touches to the strategy framework that would serve as the blueprint to finalize the BOI’s Five-year Corporate Plan.
The finalized strategy covers objectives, strategies and goals monitored via key performance indicators are illustrated.
Chairman BOI, Eng. Raja Edirisuriya highlighted the need for attainable and feasible corporate goals by endorsing strategies within the functional scope of BOI and expanding organizational capacities to astutely promote, attract, and facilitate sustainable foreign direct investment.
He further highlighted the need to diversify export of services and look beyond the existing traditional export sectors while recognizing the need to revalidate thrust sectors to optimize Sri Lanka’s talent pool.
Director General Renuka Weerakone emphasized that the BOI is expected to create much of the critical economic change Sri Lanka needs in the next five years and expressed her confidence in the ability of the team at the BOI to deliver despite the challenging global background, backed by a systematic well thought out strategic plan.
