Korean investors tell SL to improve investment climate

23 December 2015 02:56 am - 0 - {{hitsCtrl.values.hits}}

A A A

By Shabiya Ali Ahlam
As Sri Lanka is currently exploring the possibility of entering into a preferential trade agreement with Korea, Korean investors and officials are of the opinion that the current operating climate in Sri Lanka is not conducive enough for them to enter the country.

Pointing out that Sri Lanka does not offer attractive incentives to pull FDIs, Korean investors said the support given by the Sri Lankan government is “not good enough”.

“The trade regulations are strict here. Sri Lanka’s offering is not attractive compared to what Vietnam and Cambodia extends to us. We find they are flexible and offer us better business opportunities. This is a key reason why Korean companies don’t prefer to establish here,” Korea Trade-Investment Promotion Agency (KOTRA) Director General Weoncheol Koh told a seminar on strengthening economic cooperation between Korea and Sri Lanka hosted by Pathfinder Foundation in Colombo.

The seminar that featured Korean Ambassador Chang Won-Sam as Chief Guest was also attended by senior officials of the Board of Investment (BOI), Department of Commerce, Export Development Board (EDB), Ministry of Finance, Ceylon Chamber of Commerce, and Colombo-based economic think-tanks.
FDIs from Korea reached its peak in 2001 with US $ 21, 685 million, but declined drastically to US $ 674 million in 2002. While FDI’s from Korea is observed to be largely fluctuating, recent statistics show investments are on a declining trend and stands at US $ 615 million in 2015.
Explaining the reasons for withdrawal, a Korean investor said it was an “inconvenience” to run a businesses in Sri Lanka as three key areas were yet to be developed.
The first he said was the transport network. “Sri Lanka does not have proper infrastructure for transport outside Colombo other than the Southern expressway. There is no proper network and the increasing traffic congestion only worsens the situation,” he said.
The second area highlighted was efficiency in electricity. “Electricity is one of the main issues we are faced with. The cost is the same as in Korea. Almost 30 percent of the manufacturing cost goes for electricity, and that is not attractive.”
The third he said was labour. He noted that not only is labour expensive, but also the productivity levels are not as expected, thus leading to delays and inefficiencies in operations. “Before you invite investors you must develop the manufacturing sector. The current setup isn’t as attractive as said,” he stressed.
Another potential Korean investor said they don’t have access to correct information on setting up ventures in Sri Lanka.
“I went to the BOI seeking information on trade regulations and minimum investment required for my business. No one was able to assist me in that regard. One officer said US $ 1 million, while another said US $ 150,000. Another officer said she will call me with the correct amount and I am still waiting. It is imperative to give the information,” said the investor, sharing his experience.
Charting the way forward, Former BOI Chairman Thilan Wijesinghe emphasized that if Sri Lanka and Korea were to enter into a FTA, it is essential for the authorities to look at it in a strategic manner.
“We need to look at focusing the FTA primarily on the services and technology, based on the fact that we can be a technology sector. Scientists and technical labour are available at relatively cheaper cost here.” The former BOI Chief also stressed to look at both the nations based on their position today, instead of assessing based on the performance posted a decade ago.

BOI to boost investor confidence reducing red tape
The Board of Investment (BOI) recently expressed confidence in its ability to successfully offer potential investors with the ‘confidence factor’, stating it has put in place a number of measures to offer a full package in overcoming bottlenecks.
With the nation moving forward in full steam to lure in more Foreign Direct Investments (FDIs), BOI Executive Director Project Implementation D.P. Ariyasinghe said: “We have put in place mechanisms to address the challenges investors face. Our strong relationship with the Provincial Councils takes that a step further.
“If any issue springs up while executing investment projects, the BOI is in a position to immediately provide investors with the answers and immediately course-correct.”
He added that the agency strives to identify the needs of investors and conceptualise plans to not only attract FDIs, but to also encourage diverse segments to set foot in the island nation.
“If there is one thing that investors are looking for when they come to a country it is confidence. If we can provide them with the confidence that the money that they bring in can be invested in a well-planned manner, we are already successful in our efforts,” said Ariyasinghe during a press briefing held recently to promote investments to the country’s Eastern Province.
He opined that if the process of overcoming barriers could be expedited, investors would gain confidence about the investment climate.
Noting that challenges are common in all countries that strive to attract FDIs, the senior official said Sri Lanka being a relatively small nation is advantageous as it allows overcoming bottlenecks in a relatively easier manner.
When looking at the overall numbers, 60 to 65 percent of the inflows coming into the country as FDIs are re-investments. Ariyasinghe said this indicated that the agency (BOI) had been successful in its efforts.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Korean investors tell SL to improve investment climate

Comments - 0

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Two racing drivers arrested over Fox Hill tragedy

Ranil Wickremesinghe caravan moves on despite barking dogs

Racing event tragedy leaves seven dead including eight-year-old child

Street food vendor arrested for verbally harassing foreigner

Train fails to halt, crashes onto Colombo Fort platform

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

MIRROR CRICKET

Is Chamari Athapaththu Sri Lanka’s greatest cricketer ever?

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

TODAY'S HEADLINES

SL took minimal steps to punish officials who committed human rights abuses: US report

Iranian President’s visit Sri Lanka withstands western pressure

25 tons of solid waste disposed along Sri Pada route

Temperature rises to ‘Caution’ level

Sri Lanka secures third spot in South Asian Kurash Championship 2024

Athapaththu back atop ICC Women’s ODI Batting Rankings

Army forms committee to probe Diyatalawa Fox Hill Supercross accident

Indian cricket manager indicted for Legend Cricket League match-fixing allegations