SL’s apex investment promotion agency backs protectionism

By Chandeepa Wettasinghe
Sri Lanka’s apex government body for promoting investments appears to support limited trade despite the current government’s positive disposition towards the matter.
“You can’t act in a manner that is unjustifiable by the other industrialists,” Board of Investment (BoI) Chairman Upul Jayasuriya said, and added that the potential investors, who want to import raw materials for production, will only be considered in a case-by-case basis for approval.
He was responding to a question on whether the BoI would be promoting investments into the fast-moving consumer goods sector in the post-interim budget environment, where the people have higher consumption.
Jayasuriya also added that industries, which were classified in the negative lists of Sri Lanka’s free trade agreements, would not be opened for investment. 

“The negative list has been formulated for the purpose of covering the local industry. There have been, from time to time, requests made but we’re very reluctantly looking at these requests in order to safeguard the local industry,” he said.
However, Policy Planning and Economic Affairs Deputy Minister Dr. Harsha de Silva on the same day said that the new government is promoting trade and that protectionist measures would only work in short periods, eventually leading to the decline of local industries due to a lack of international competition and motivation for innovation, a view also shared by prominent economist Dr. Indrajit Coomaraswamy.
Mirror Business asked Jayasuriya if such a situation won’t develop due to the policy he stated.
“The problem is this - supposing if a hotel is being put up, there are so many other support services and items that are being manufactured in the country. These investors don’t pay any taxes, they’re able to take away their profits to their countries,” he said.
He noted that through an exit clause, the investors can get rid of their investments and return to their country.
“We have to protect our industries. At least there should be some amount of the investment benefits that should go down to the people,” he said.