LMDtv 1
“The government needs to make sure that the stability it has created can be maintained over the next four years”
Investment and capital inflows are essential to rebuilding Sri Lanka in the aftermath of the floods late last year – and more importantly, to sustain economic growth. However, it is crucial that the unified focus of the country is to ensure that investors are confident about setting up shop.
“Sri Lanka has seen significant stability in its economic framework and policy decisions over the past year, and this has dovetailed into investment interest,” the Director General of the Colombo Port City Economic Commission (CPCEC) Revan Wickramasuriya declared, on a recent LMDtv interview.
However, the need of the hour is to strengthen investor confidence, he stressed: “One should look at what investors need – whether it’s locals investing to expand their businesses or foreigners looking at investing and growing their businesses in Sri Lanka.”
Wickramasuriya continued: “Looking at the factors of production – land, labour, capital and entrepreneurship – the government has land and labour. Capital, business acumen and entrepreneurship, to a great extent, rest with the private sector and overseas entrepreneurs. Therefore, the government must create a framework to ensure that investors have access to land and labour.”
It’s also important for Sri Lanka to remain regionally competitive. He cited regional countries such as India, Bangladesh, Pakistan and the Maldives, and their capital cities as examples, adding that “Colombo ranks well in terms of liveability, congestion, pollution and history.”
Wickramasuriya noted that Sri Lanka is an island nation that has always been a strategic location for those who want to enter, set up and serve the subcontinent, and even farther – such as Singapore, the Middle East and parts of Africa.
“It’s clear that we have a significant cost advantage, which alone is adequate to attract businesses that want to be based here and appeal to people who want to reside in Sri Lanka,” he explained.
But he emphasised that the government must enhance and streamline its regulatory framework to make it more enticing to investors.
He elaborated: “Based on the feedback we’ve received from businesses that have been looking at setting up at the Port City Colombo, investors who bring capital from overseas need assurances that the income they generate isn’t restricted from repatriation or mandatory conversions.”
Wickramasuriya also revealed that investors are also concerned about the complexities of local labour laws in relation to foreign workers who would live and work here: “Investors need more clarity on these requirements prior to establishing businesses here.”
The Director General of CPCEC commended the government for doing “exceptionally well to stabilise the economy in the last 24 months. He elaborated: “We’ve seen improvements in our credit rating, and we continue to garner notable support from development finance institutions and multilaterals.”
And when the cyclone hit, the response that Sri Lanka received from a number of nations – including the US, Australia, China, the Middle East, India and Pakistan – shows clear evidence that these countries are willing to help.
Wickramasuriya said that “the government needs to make sure that the stability it has created can be maintained over the next four years.”
He emphasised that regulations must be introduced to create the necessary flexibility and a framework for businesses to operate in so that people will want to live in this country. And Wickramasuriya stressed the need to ensure that the existing regulations are administered as many haven’t been implemented.
He believes that the government and related stakeholders are focussed on continuing to take the next steps, reasoning that “we’re not expecting large steps – let’s take baby steps.”
Stable policies and a framework that creates a sense of confidence for investors are the needs of the hour. “Continuing the momentum is absolutely critical,” he concluded.
