UNP-led regime aims to achieve US$ 3bn FDIs by 2017

Foreign direct investment (FDI) inflows to the country this year are set to exceed the stagnant past figures, and future FDI targets have already been set, according Investment Promotions and Highways Deputy Minister Eran Wickramaratne.

“I’m confident by the end of this year with the return of our government, —we’ll increase our investments by 50 percent to US$1.5 billion. Given that projection, I could see that by 2017, we could be increasing investments to US$ 3 billion. The signs are good,” Wickramaratne, who used to be a leading banker in the country, said. 

Sri Lanka’s FDI levels have averaged around US$ 1 billion since the end of the civil war due to the lack of an investment enabling environment.

Wickramaratne said that the enabling environment includes the consistent following of local and international law, independence of the judiciary, and the ease of doing business, which his party will continue to improve, and dividends of which have already started to show.

“From January to July this year, we’ve had proposals of just over US$ 2 billion and we have only seen US$700 million. For the 2014 full year, we had US$1 billion. This country’s future lies in being able to invest. Invest your excesses in the economy and attract foreign direct investments,” he added.

Recently, the Board of Investment confirmed that over US$ 4.5 billion in FDIs are currently in negotiation stages.

Wickramaratne noted that countries such as Vietnam, Thailand and Malaysia attracted 2-3 times more per capita FDIs than Sri Lanka in 2014.

Further, Vietnam, which had similar levels of FDIs as Sri Lanka at the turn of the century, has been attracting between US$10-12 billion in FDIs since 2009.
Wickramaratne compared the Sri Lankan situation with Singapore where over 2,000 Japanese companies are operating and India, where German companies have been operating for 150 years, and said that Sri Lanka should attract such companies and that the Board of Investment is working towards that. He said that a major project with a German company will be signed tomorrow, alluding to the US$30 million Volkswagen assembly plant to be set up in Kuliyapitiya, and mentioned the recent visit of the Honeywell team as well.

“In the last decade, we’ve hardly had any investment coming from Europe or the US. These are the kinds of investments we need to attract. We need to attract manufacturing, but we need to also attract high sciences, because all our high brains leave the country,” he said.

Wickramaratne outlined that other foreign companies involved in aviation, automotive, transportation, energy, industrial processes, protection and safety, defence and space industries should be wooed.

“I think the time has come to attract them, because we need to retain our children who are in the sciences—not just the social sciences—within this country. We need to be strategic. We live in the South Asian region so we need to find our niches. These niches should give us higher living standards,” he added.

He noted that foreign manufacturers will have a much better delivery schedule if they have set up in Sri Lanka, compared to the other manufacturing hubs in South and East Asia. “We don’t have all the advantages of Singapore at this point of our journey, but we have some very good advantages; one of which is our location and having the most efficient port in South Asia. There’s a tremendous opportunity to get our goods to Europe much faster,” he said. 
(CW)