An opportunity has emerged for Sri Lanka to attract high quality Foreign Direct Investments (FDI’s) in the prevailing COVID-19 backdrop, says Executive Director, Steradian Capital Investment, Hardy Jamaldeen.
He said that the manner in which the government is battling the COVID-19 pandemic is one of the biggest strengths and also one could finally see long term policy reforms finally being implemented. “These are major plus points to woo FDI.”
He said that a study has identified the biggest pain point which influences the lack of FDI’s being non-conducive policy and critical cogs in the wheel of FDI’s will need to be identified.
“The recent task force that was set-up to curb and mitigate the spread of COVID-19 has been effective. A similar task force should be set-up to fulfill the policy reform mandate in a short space of time.”
Whilst the thrust in infrastructure development is considered as an important factor in attracting FDI, the heavy capital expenditure (Capex) requirement cannot be overlooked.
“At present there does not seem to be sufficient fiscal room for the incumbent Government to engage in an explosive Infrastructure development drive. The thrust in the short to medium term should be to expedite the bringing online of the existing infrastructure projects that are currently funded and underway.”
A conducive fiscal environment at a later point in time will allow Sri Lanka to actively partake in infrastructure led growth. However, in order to further reinforce the economic impetus and positive spillover that is envisaged due to the development drive in infrastructure projects, it is vital to draw up a 10 year roadmap showcasing all potential investible infrastructure projects which can be showcased on a prioritised basis to both local and foreign stakeholders. “It is essential that this road map is endorsed by all parties concerned to ensure continuity of such projects in the event that a change in regime is to take place.”
The time is now to proactively seek out policy reform by putting in place the people, comprising of public sector officials, private sector practitioners and industry think-tanks to formulate, amend, and finally implement actionable policy to improve the attractiveness of Sri Lanka as a key FDI destination in the region.
Jamaldeen, former Finance Director, Newbridge Capital Investments Limited London, identified eight key variables that influence and attract FDI’s into countries. They are 1) Stable Government and Policy 2) Up to date Legal Framework 3) Advanced and Integrated Infrastructure, 4) Macro Indicators ( Stable economy with consistent growth in GDP, Low lending rates, Low single digit) 5) Fair and attractive business environment, 6) Regional and bilateral trade agreements, 7) Regionally competitive tax structure 8) Educated and Skilled Workforce. (SS).
Reference - Publushed by Daily News
The Daily News is an English-language newspaper in Sri Lanka. It is now published by the Associated Newspapers of Ceylon Limited, a government-owned corporation. The newspaper commenced publishing on 3 January 1918. D. R. Wijewardena was its founder.