30 June 2009
Prof. G. L. Peiris, Minister of Export Development and International Trade visited New York and Washington DC last week to encourage United Nations and U.S. government support for the post-conflict economic projects and foreign investment.
Prof. Peris met with Susan Rice, U.S. Ambassador to the United Nations, as well as an Assistant U.S. Trade Representative and the Acting Under Secretary of the Department of Commerce.
During two busy days of meetings, Minister Peiris also consulted with Rep. Sander Levin, (D-Michigan), who is Chairman of the Trade Subcommittee of the influential House of Representatives Ways and Means Committee.
Rep. Levin said that Sri Lanka would be considered during his subcommittee’s examination of future trade agreements.
Minister Peiris told Congressman Levin and other U.S. government officials that now was the time for renewed investment in Sri Lanka, as the country resettles those displaced by the 25-year-long conflict, rebuilds the north and launches a political process that will give the Tamil population a new voice.
Outside investment, Minister Peiris said during an interview with a Washington correspondent for the Reuters news service, “will enable Sri Lanka to take advantage of the opportunity that has presented itself. We must have an atmosphere of contentment and well-being. What we want is access to markets. We would expect more support on this.”
The World Bank earlier in the week approved a $24 million, 20-year loan to bolster Sri Lankan Healthcare efforts, especially in the Eastern and Northern Provinces, both areas that have been affected by the recent conflict and victory over the Liberation Tigers of Tamil Eelam.
The U.S. State Department also announced an additional $6 million in aid to help pay for de-mining operations in Northern Sri Lanka.
Asian investors and companies, Minister Peiris said, have been quick to show interest in Sri Lanka since the conflict’s end. While interests from Malaysia are the most active, Japan and China are also currently involved in projects throughout Sri Lanka.
The government expects growth in traditional sectors, such as tourism, tea and rubber production and the garment industry, as well as an expansion of agricultural production and construction when the post-conflict development takes hold.
Invest in Sri Lanka
Sri Lanka was the first in the South Asian region to promote foreign investment. Foreign investment is an important element in Sri Lanka's economic growth and is therefore actively encouraged. Approval is required from the Board of Investment (BOI) prior to the establishment of a foreign business venture in Sri Lanka. The BOI is an autonomous agency and is the primary government body responsible for foreign investment.
In the recent past investing in the Capital & Share Market in Sri Lanka has shown a rapid growth. The Securities and Exchange Commission (SEC) regulates the securities market in Sri Lanka & grants License to Stock Exchanges, Stockbrokers & dealers etc. Foreign investors can freely purchase up to 100 percent of equity in Sri Lankan companies in permitted sectors.
Real Estate Investment
Foreign Investments in real estate in Sri Lanka, including interest in properties, do not require any approvals. However, a 100% Transfer Tax on the value of the property is payable, except in the purchase of condominium properties above 3rd floor, acquisition of land for development for more than 100 residential units, for Hospitals, infrastructure and non citizens maintaining over US$ 150,000 in Foreign Currency Government securities Accounts.
Raj Rajaratnam, the Sri Lankan-born founder of the $7 billion hedge fund Galleon Group, bought a 20 percent stake in broking firm Lanka Orix Securities Pvt.
Lanka Orix Leasing Company, which held 30 percent of the stock-broking firm, and Ishara Traders, which owned 40 percent, sold their stakes to Rajaratnam and other investors, said Tushan Wickramasighe, managing director at Lanka Orix Securities.
The other stakeholders include Rusi Captain, whose family is the largest shareholder in John Keells Holdings Plc, and Priyani Ratnagopal, a former director at Asia Securities Pvt., a local broker, Wickramasighe said. Captain will buy 20 percent, while Ratnagopal will acquire 10 percent. Wickramasighe will raise his stake to 50 percent from 30 percent, he said.
The sale will be completed after the firm receives the market regulator’s approval on June 25, Wickramasighe said.
Moksevi Prelis, the former head of DFCC Bank Ltd. will be appointed as chairman at the broking firm, Wickramasighe said.
To contact the reporter on this story: Pooja Thakur in Mumbai at firstname.lastname@example.org.
Roman Scott, Managing Director of Calamander Group Pte, talks with Bloomberg's Catherine Yang about investing in Sri Lanka.
Scott, speaking from Singapore yesterday, also discusses the outlook for Sri Lanka's economy and tourism industry after the end of almost three decades of civil war.
Video: Running time 04:14
Lanka IOC Plc, a unit of India’s largest oil refiner, plans to spend $30 million to double the number of its retail outlets and benefit from a revival in the South Asian island’s economy after the end of the civil war.
The Indian Oil Corp. unit aims to add 35 to 40 fuel stations annually over four years to cater to an expected rise in diesel and gasoline demand after the government declared victory over rebels of the Liberation Tigers of Tamil Eelam, Lanka IOC Managing Director Suresh Kumar said in an interview.
Central bank Governor Nivard Cabraal may double the nation’s growth forecast for 2009 to 5 percent on expectations of improved business confidence and investment and farm output. The Indian company’s expansion will go ahead as it expects to make a profit this year after hedging and slower currency depreciation help to offset losses from selling fuels below cost.
“Our short-term scenario won’t cloud my thinking on expansion,” Kumar said in his Colombo-based office yesterday. “Now that the war is over, the focus is on economic prosperity and growth.”
President Mahinda Rajapaksa, who declared victory over the LTTE May 16, is seeking aid and investment to help turn the war- ravaged east and north of the island into productive parts of the economy. The International Monetary Fund said on May 21 it is near an agreement to lend Sri Lanka almost $2 billion to repay debt and rebuild the economy.
Lanka IOC has risen 15 percent this year on the Colombo Stock Exchange, compared with a 62 percent gain in the benchmark Colombo All-Share Index.
Lanka IOC, which reported a loss of 1.24 billion rupees ($11 million) in the year to March 31, will fund the expansion through offshore borrowings and loans from development banks in Sri Lanka.
Lanka IOC currently loses 24 rupees on a liter of gasoline and 24.30 rupees on a liter of diesel, Kumar said. Lanka IOC is seeking its first price increase for the year and has requested the government to scale back duties on oil imports.
“This year, we definitely won’t be at a loss,” Kumar said, amid earnings from hedging and a slower depreciation of the Sri Lankan rupee. “Dollars have been made available at a cheaper cost and will facilitate smooth operations and supplies.”
Lanka IOC borrowed $50 million from ICICI Bank Ltd. in Singapore this quarter to fund day-to-day expenses, Kumar said. Lanka IOC won’t borrow from its parent company.
Oil companies in Sri Lanka have been free to set prices since June 2006, although Lanka IOC sells fuel below cost to retain market share because state-owned Ceylon Petroleum Corp., or Ceypetco, caps prices to help the government control inflation.
Lanka IOC, which runs a third of the island’s retail network, was ordered by Petroleum Minister A.H.M. Fowzie in June 2008 to match prices or risk having its 150 gas stations being taken over.
Fowzie said yesterday the government had no plans to revise fuel prices.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at email@example.com
29 June 2009
"World Chambers Competition 2009" winners announced : Hambantota-Manchester partnership is the winner of the Best Networking Project
The Sunday Times, June 14th 2009
The Hambantota District Chamber of Commerce(HDCC) and its
Their post tsunami chamber project beat off strong international competition to win the award, HDCC said in a statement. The competition, organized by the International Chamber of Commerce (ICC) and the World Chambers Federation (WCF), is the only global awards programme to recognize the most innovative projects undertaken by chambers of commerce and industry from around the world.
The 2009 edition of the World Chambers Competition attracted 47 entries from 33 countries, from which 19 finalist projects were selected. The winners were announced at a special ceremony last day of the WCC.
Following the December 2004 tsunami, the Greater Manchester Chamber of Commerce (GMCC) and its service delivery company, Manchester Solutions (MS), took a decision to invest in a programme to support the economic re-development of tsunami-affected areas. Research was carried out in
The HDCC was approached, due to the fact that it is a key and well-respected player regionally and nationally in
Early in 2005, GMCC and HDCC entered into an initial, three-year Partnership Agreement, to work together and share ideas. Richard Guy, Chief Executive of the Manchester Solutions Group said,
"For over four years now we have been working closely on a series of development projects associated with the development of the Hambantota district as well as of HDCC itself. This has included initiatives to support the economic development of Hambantota, to stimulate the local tourism industry, and also to improve HDCC's effectiveness by expanding its job placement services.”
By Cherian Thomas,June 5 (Bloomberg)
“The exchange is at a very primary level and foreign participation is critical for it to grow,” Channa de Silva, director general of the Securities and Exchange Commission of Sri Lanka, said in an interview in Colombo yesterday.
The commission is working “to create liquidity and depth” in the market by starting derivatives trading and persuading the nation’s biggest companies such as Brandix Lanka Ltd. and Dilmah Tea Co. to list on the stock exchange. Almost three decades of war with Tamil Tiger rebels curbed the island’s economy and reduced the need for companies to seek funding by selling shares.
“It will happen now as the level of economic activity picks up after the war,” said Malik Fernando, a director at Dilmah Tea, among the best-known Ceylon tea brands in the world.
Sri Lankan troops defeated the Liberation Tigers of Tamil Eelam last month, ending the rebels’ quest for a separate homeland in the Indian Ocean island nation. President Mahinda Rajapaksa said this week the country will find a political solution to the issue of Tamil separatism.
“Sri Lanka is now open for business,” de Silva said. “Opportunities are tremendous and it’s a country waiting to unfold its potential.”
Daily average trading on the Colombo Stock Exchange surged 20 times to 1 billion rupees ($8.7 million) after the government declared victory over the Tigers on May 16, driven by demand from the local population, de Silva said. The key Colombo All- Share Index has climbed 12 percent during the period, taking its gains this year to 42 percent.
The exchange wants to double its capitalization to $14 billion in a year, he added.
Sri Lanka operates one of the most open economies in the world and no approvals are required for any overseas investor to buy shares in the country. Profits made on stock trading aren’t subject to capital gains tax and can be repatriated. Dividends are taxed at the rate of 10 percent at the withholding stage.
De Silva says the end of the war is a “paradigm shift” in the country’s history which could spark a lot of interest among overseas investors in Sri Lanka.
“Sri Lanka has been in the news, for right or wrong reasons, but at the end of the day it is in the minds of people,” de Silva said. “It’s like Vietnam -- there wouldn’t be many people in the world who don’t know Vietnam. In the same way, there wouldn’t be many who don’t know Sri Lanka.”
Investor Jim Rogers, who correctly predicted a commodity price rally in 1999, said May 21 he sees “wonderful opportunities” in the island nation and that he would like to go to the country to see “great, cheap” opportunities after the “dramatic” changes.
Governor Nivard Cabraal said this week the central bank will this month revise the nation’s growth forecast for 2009, and may almost double it to 5 percent because of the increase in business confidence and as the liberation of rebel-occupied land boosts farm production. The Board of Investment of Sri Lanka expects foreign direct investments to quadruple to $4 billion in three years.
De Silva said the Colombo Stock Exchange will start a trading floor in the next three months in Jaffna, located in the north of the country and the unofficial capital of the Tamil Tigers, who at one point controlled a third of Sri Lanka.
“The north was never tapped,” de Silva said. “A trading floor brings investors together at the retail end, which will help mobilize money.” He said Sri Lanka’s savings rate, at 23 percent of gross domestic product, “will not cater to the development agenda” the country envisages.
He said the stock exchange will set up a clearing corporation soon, facilitating derivatives trading. The authorities are also working to start a real-estate investment trust and exchange traded funds to complement derivative operations, de Silva said.
Interest to set up a commodities market in Sri Lanka, a producer of tea, coffee and rubber, has also been made by investors in India and Nepal, de Silva said without naming them.
“Sri Lanka has a story to tell,” de Silva said. “If you look at our maps, you realize it can be a strong destination for logistics. Any vessel going from East to the West or from West to the East needs to virtually refuel in Lanka.”
Accordingly, the government has embarked on a three-year plan to increase Colombo’s port capacity by four times and bring it on par with Singapore.
“Then there is tourism, and if the government is clever, it can even turn Sri Lanka into a major financial center,” de Silva said. “It will take a while for people to realize the momentous change that has taken place in Sri Lanka and the massive opportunities that brings to the table.”
To contact the reporter on this story: Cherian Thomas in Colombo at Cthomas1@bloomberg.net.
By Cherian Thomas, June 22 (Bloomberg)
Calamander Group Pte, a Singapore- based investment company, will create the first private equity fund focused on Sri Lanka, betting the nation’s economy will prosper after the end of three decades of civil war.
Calamander plans to invest between $50 million and $75 million in the island nation’s rubber, tea, timber, coconut, bank and ceramics businesses in the next 18 months, Managing Director Roman Scott said in a telephone interview on June 19. The fund aims to earn a return of as much as 35 percent, he said.
“It’s not a big fund by world standards but for Sri Lanka you can actually do a lot of damage with that kind of money,” Scott said. “There’s a huge opportunity to do a lot.”
Interest in Sri Lanka is growing after its military defeated the Tamil Tiger rebels last month, ending Asia’s longest running civil war. Investor Jim Rogers, who correctly predicted a commodity price rally in 1999, says he sees “wonderful opportunities” in Sri Lanka, while HSBC Private Bank says the country could become the “Hong Kong of India.”
“The end of the war has greatly enhanced Sri Lanka’s prospects,” said Jan Zalewski, a London-based analyst at IHS Global Insight, an economic forecasting company. “But the future depends upon the government’s initiative to satisfactorily address the root causes of the conflict.”
Calamander’s Scott said the private equity market in Sri Lanka could grow to between $1 billion and $3 billion in five years provided the government gets its “economic and political policies right.”
Sri Lanka defeated the Liberation Tigers of Tamil Eelam on May 16 and ended their struggle for a separate homeland. President Mahinda Rajapaksa may still have to find a settlement to the separatist demands of the ethnic Tamils to secure lasting peace and build investor confidence, Zalewski said.
The final battles have left about 300,000 people displaced and living in more than 40 camps across the northern part of the country. Rajapaksa said last month he intends to resettle them in the region within 180 days.
Calamander is just starting to raise funds and is targeting high net worth individuals and institutions in Asia, particularly Indians and foreign investors in India, Scott said.
“Wealthy Indians understand the potential for Sri Lanka,” he said. “They get it because they see Sri Lanka as an economic extension of India. Effectively, Sri Lanka is part of a greater Indian economic zone.”
Arjuna Mahendran, HSBC Private Bank’s chief investment strategist, says Sri Lanka could benefit from its proximity to India, just as Hong Kong profits from being a trade hub to China. Sri Lanka lies 31 kilometers (19 miles) south east of India, the world’s second-fastest-growing major economy.
Seventy percent of the goods handled by the Colombo port are goods for import by India and that could increase because Indian ports don’t have enough depth, Mahendran said. Sri Lanka plans to quadruple capacity at the Colombo port in three years.
Scott said Calamander has already identified investments in Sri Lanka worth about $40 million, mainly in rubber, banks and trading of commodities like coconut and tea. The fund has predominantly invested in real estate in London and Singapore and advised bank restructuring in Vietnam and the Philippines.
“The geopolitical risks are not half as bad as everybody thinks they are in the West,” Scott said. “So rather than waste our time trying to persuade people who have never been to Sri Lanka and never understood it, we are relying to tap resources in India.”
Companies and investors in India understand that the “trend growth rate in the long run for Sri Lanka should be about the Indian growth rate,” he said.
“People who understand India recognize that the huge private equity interest in India in the last five years has pushed up Indian asset prices,” Scott said. “And Sri Lanka is basically, we think, Cinderella, that is you get Indian growth rates and asset prices that are 50 percent of India’s.”
Calamander won’t invest in Sri Lankan textiles, tourism and tea plantations, businesses that the country is renowned for. Scott says even though Sri Lanka makes high-end apparel including Victoria’s Secret lingerie, he doesn’t like the structure of the business because it’s “far too prone to big single orders.”
Tea plantations have “horrible unionized labor” and Calamander will look for investment opportunities in factories, processing, blending and marketing of the commodity, Scott said.
Calamander is also “wary of tourist sector and hotels” because a stray security incident in the country could see tourist arrivals drop by half a million “overnight,” he said, making the business “a lot riskier and lot less stable.”
As Sri Lanka works out ways to accelerate development after defeating the rebel LTTE, China has pledged its full cooperation in reconstruction of the Island nation's economy after 30 years of ethnic war.
"Prevalence of peace will strengthen the economy of Sri Lanka and China will continue to be a part of the economic reconstruction of the Island country," Deputy Director General of the Asian Affairs, Commerce Ministry, China Liang Wentao said.
"Ending the war against terrorism might help Sri Lanka to regain its ancient glory and economic prosperity," Wentao told reporters in Beijing yesterday.
"What Sri Lanka needs at this moment is a peaceful environment to rebuild its economy and this will attract more investments and economic benefits to the country.
"Sri Lanka has the best natural resources in the entire South Asian region. Reviving tourism and the export trade will help Sri Lanka rebuild its economy which was affected severely due to the war," Wentao said.
He said China will provide assistance to the Sri Lankan Government to rebuild and rehabilitate those affected. The top Chinese official said the two countries could work towards economic as well as cooperation in tourism.
"The strategic location and Buddhism will attract more Chinese tourists to Sri Lanka," he said.
Rubber, tobacco and fish products are the major exports to China from Sri Lanka.
"Diversifying of the economy will open new avenues for Sri Lankan products to enter the Chinese market," the state run Daily News quoted Wentao as saying.
Sri Lanka has invited Chinese investments to the country by taking advantage of the conducive conditions for setting up projects. China had invested in the Southern Hambantota new Port Complex, the Norochcholai (North-west Sri Lanka ) coal-fired power generation plant and the Performing Arts Centre in Colombo, among other areas, in Sri Lanka.
Tourist arrivals from China to Sri Lanka is estimated to have grown by 7.3 per cent during the first half of 2008.
On the export front, Sri Lankan tea is performing exceptionally well in the Chinese market and has achieved a remarkable growth of more than 65 per cent during first few months of 2008 over export figures for 2007, an official said.
“If I weren’t here, I’d be on a plane to Sri Lanka" - Jim Rogers on wonderful opportunities in Sri Lanka
By Shiyin Chen - May 21 (Bloomberg)
Investor Jim Rogers said he sees “wonderful opportunities” in Sri Lanka after the government overran Tamil Tiger rebels.
Rogers told a conference in Singapore that he would like to go to Sri Lanka to see “great, cheap” opportunities in the country after the end of a 26-year civil war, citing “dramatic” changes in the country.
“If I weren’t here, I’d be on a plane to Sri Lanka right now,” Rogers said.
Myanmar also offers “enormous” potential for investors, Rogers said, given the country’s location next to India and China and its natural resources.
“If I was looking for new places to invest, that would be high on my list,” Rogers said, referring to Myanmar.
Elsewhere in Asia, Rogers said he is convinced China and Taiwan are moving in a peaceful direction. His stocks picks include Chinese and Indian water suppliers.
In Asia, infrastructure and power companies offer opportunities.
Rogers doesn’t have any short sales in place at the moment, he said.
US investment legend Jim Rogers, who co-founded Quantum Fund, prefers China, Sri Lanka to India for Investment
May 21 (Bloomberg) -- China and Sri Lanka are better investment opportunities than India even after the Congress party’s biggest election victory in two decades, investor Jim Rogers said.
India’s benchmark Sensitive Index, or Sensex, jumped a record 17 percent on May 18, causing a trading halt, on speculation Prime Minister Manmohan Singh’s victory will enable him to accelerate economic reforms.
“I’ve heard the same thing for the last 30 years,” Rogers told an Economist Conferences forum in Singapore today, saying he’s skeptical of Singh’s pledges. Still, India will be “the next great investment” if Singh sticks to his commitments, Rogers said.
This week’s gains drove the Sensex to a 42 percent advance for 2009 to date, in line with the Shanghai Composite Index’s 43 percent climb on optimism China’s 4 trillion yuan ($586 billion) stimulus plan will bolster the economy. Sri Lanka’s Colombo All- Share Index jumped to a seven-month high today as the central bank raised its forecast for economic growth following the end of a 26-year civil war.
“You’ve got the wind in your face doing business in India, you’ve got the wind in your back in China,” Rogers said, adding that he sees “great, cheap” opportunities in Sri Lanka because of “dramatic” changes in the country after the end of the war.
Rogers is chairman of Singapore-based Rogers Holdings and the author of “A Bull in China: Investing Profitably in the World’s Greatest Market.”
India’s gross domestic product growth may weaken to 6 percent in the year that started April 1, the slowest pace since 2003, the central bank said last month. China’s economy expanded 6.1 percent in the first quarter, the slowest pace in almost a decade, though manufacturing expanded in March and April, with the Purchasing Managers’ Index rising to 53.5 last month.
India’s ruling coalition said in its pre-election manifesto it will add between 12,000 and 15,000 megawatts of power generating capacity each year in its five-year term. The targets are ambitious considering India added only 9,263 megawatts of new capacity during the fiscal year ended March 31, 2008, and less than half that in the same period a year later.
Sri Lanka’s central bank said today the economy may grow between 4 percent and 5 percent, compared with an April forecast of 2.5 percent. The benchmark index has jumped 12 percent this week, taking its gains this year to 43 percent, the eighth-best performer globally, after the military said it killed the Liberation Tigers of Tamil Eelam leader Velupillai Prabhakaran.
Myanmar also offers “enormous” potential for investors, Rogers said, given the country’s location next to India and China and its natural resources. He said he doesn’t currently have any investments in Myanmar.
Rogers said on May 12 he may bet on a slide in equities after nine weeks of gains, in a Bloomberg Television interview. The MSCI World Index has since lost 0.6 percent.See "JIM ROGERS BLOG": http://jimrogers-investments.blogspot.com/2009/05/china-sri-lanka-and-india.html
As Sri Lanka prepares for a new chapter of development after ending nearly three decades of conflict, ecologists among other experts here are calling for a ‘green’ revolution against the usual foreign investment, private sector-driven type of progress.
Foreign investors are already inquiring about the prospects in the war-weary north - now cleared for an economic boom - while five-star hotels in Colombo are seeing increasing demand for their rooms from foreign businessmen and Sri Lankan expatriates. The government is inviting the Sri Lankan Diaspora to invest in or return to the country, and at the same time is urging big business from overseas to invest here.
"Is this the kind of development we want?" asked Rainor Makolage, a fitness trainer in Colombo. "We need to develop using our water and land resources. We should not cut trees and ruin the environment. Our development plan should be homespun and not copied from overseas," Makolage, who hails from southern Sri Lanka, told IPS.
Optimism about Sri Lanka ‘really’ taking off - as was expected following the post-1977 phase of economic liberalisation - is growing after government forces crushed Tamil Tiger guerrillas and killed their elusive leader Velupillai Prabhakaran last week. The bloody campaign that has cost thousands of lives triggered a mass exodus of people and scuttled the economy. Economists say Sri Lanka’s true potential has been stalled by the war, where economic growth has been averaging 4-5 percent when it should be growing by 8 percent or more.
Tourism has been the worst affected sector.
But, ecologists are questioning the rush to promote mass tourism by the authorities. "We need to promote agro-eco tourism. We need to promote a tourism that will not ruin the environment and take away the little resources we have," argues Piyal Parakrama, ecologist and executive director at the Colombo-based Centre for Environmental and Nature Studies.
Tourism authorities have announced plans to garner 1.5 million tourists per year by 2016 - this year 500,000 tourists arrived. The figure of 500,000 has eluded Sri Lanka for many years.
Chairman of the Sri Lanka Tourism Development Authority Bernard Goonatilake told reporters that the government is launching an international campaign next month that will go on until the end of the year - targeting the UK, France, Germany, Russia, the Middle East and India.
Already local hoteliers are looking at building hotels on the east coast - which has some of the best beaches in the world - with or without foreign collaboration to cater to mass-market, low-cost tourism.
Sarath Fernando, a veteran activist for farmers’ rights and coordinator of MONLAR -which represents farmers and peasants - says the usual kind of development that governments undertake will not work.
"What is the kind development envisaged? The government will invite foreign investors and the private sector to invest for the sake of the national economy, but do they take the interests of the people to heart?" he asked, adding that like in the past, investors will come, use the land offered cheap, cheap labour, while also getting tax benefits.
In fact, a Sri Lankan garment manufacturer said his company put up a factory in the East - after it was cleared of Tamil rebels a year ago - because of the tax holiday offered. "We invested there purely because of the tax holiday and other concessions. There was no other reason," he told IPS.
Fernando, referring to President Mahinda Rajapaksa’s speech in Parliament last week where he said there were no minorities, but only patriots who love their country and non-patriots, noted that if this is true, then people should also be given land and allowed to freely decide their future.
"Take the tea and rubber plantation workers for example. For more than a century their lifestyles haven’t improved although tea is the biggest commodity export. They have no decision-making powers and their daily wage of 300 rupees [about three dollars] is even less than the village worker who gets 600 rupees," he said.
Fernando said the kind of development that is needed should benefit locals - it should not be transplanted from somewhere through foreign investment. "If the government doesn’t consult the locals on development, the same issues [that led to the war] would remain where Tamils will struggle for land rights against investors who come from outside."
Parakrama says Sri Lanka must go back to being an agriculture country and have a vision based on a ‘natural resource account.’ "This is just like running a private company where it operates within the available resources unlike the government which lives beyond its means."
He said Sri Lanka - once known in the West as the granary of the East - needs to develop agriculture in the North which was once very productive and provided some 20 percent of Sri Lanka’s food requirements before fighting broke out.
Economic growth indicators have not included the North for the past 25 years, according to the Central Bank as data collection was not possible.
Parakrama stresses that, instead of building factories which pollute the environment, the authorities must use the country’s natural resources, develop water harvesting and water security.
"Fresh water is a valuable resource and there is a lot of fertile land in the northeast. For basic living you need food… not computers. The irony however is that the farmer is struggling while the man with the computer has a far better life," he said.
June 2 (Bloomberg) -- Sri Lanka expects foreign direct investment to more than quadruple to $4 billion by 2012 as the end of a 26-year-old civil war leads to political stability.
“Interest in Sri Lanka is tremendous now,” Dhammika Perera, chairman of the Board of Investment of Sri Lanka, said in an interview in Colombo yesterday. “The end of the war has put the country on the radar of global companies.”
Clothing manufacturers and hotel operators are scouting the nation for investment opportunities after the military defeated rebel Tamil Tigers last month, Perera said without naming the companies. President Mahinda Rajapaksa may still have to find a settlement to the separatist demands of the ethnic Tamils to secure lasting peace and build investor confidence.
“We think there are great untapped opportunities, however many challenges remain,” said Prakriti Sofat, a Singapore-based economist at HSBC Holdings Plc. “The government needs to create the right post-conflict environment by not only ensuring law and order for the broader civilian population but most importantly finding a political solution to the ethnic problem.”
An estimated 300,000 people have been displaced by fighting in the north, the previous stronghold of the Liberation Tigers of Tamil Eelam, which fought for a separate Tamil homeland and at one point controlled a third of the island’s territory.
Rajapaksa on May 16 declared victory over the LTTE. The president said his government will implement a power-sharing plan for the north based on a 1987 constitutional amendment that arose from a peace accord with India.
The plan will establish a provincial council to assume some of the central government’s role. The LTTE had rejected the amendment in 1988, saying the proposal was meaningless because the national parliament retained the power to rule on matters allocated to provincial authorities.
Still, Sri Lanka, without war, is an “attractive investment” proposition as the country improves its power, ports and other infrastructure and streamlines procedures for business, said Perera. He said he won’t name the companies that are planning investments in Sri Lanka until contracts with them have been signed.
Sri Lanka moved up to 29th position in 2008 from 47th place in 2007 for ease with which to start a business in the country, according to the World Bank. The island allows 100 percent ownership to foreign investors in all businesses and places no restriction on repatriation of earnings, Perera said.
Malaysian companies invested $150 million in Sri Lanka in 2008, making the country the biggest foreign direct investor in Sri Lanka during the year, according to the Board of Investment. India ranked second with $126 million as Bharti Airtel Ltd., the nation’s largest mobile-phone company, started operations in Sri Lanka. China was placed ninth with $27 million of investments.
Sri Lanka’s benchmark stock index, the Colombo All-Share Index, has climbed 16 percent since the government overran Tamil Tigers, taking its gains this year to 47 percent.
The central bank last month raised its growth forecast for the nation’s $32 billion economy to between 4 percent and 5 percent, compared with an April estimate of 2.5 percent.
Investor Jim Rogers said May 21 that he sees “wonderful opportunities” in Sri Lanka and that he would like to go to Sri Lanka to see “great, cheap” opportunities because of “dramatic” changes in the country.
According to a statement issued by the Department of Government Information, the government has decided to join the International Renewable Energy Agency (IRENA) as a move to promote the development of renewable energy in the island.
"The development of indigenous renewable energy is the key solution to the current challenge on reducing the dependence on imported petroleum," said the statement, reports Xinhua news agency.
At present, about 4 percent of Sri Lanka's electricity production is based on non-conversational renewable energy, while 2 percent of the households in Sri Lanka enjoys off-grid renewable energy systems such as solar, micro-hydro to meet their basic energy needs.
The IRENA is an intergovernmental organization for promoting the adoption of renewable energy worldwide. It aims to facilitate renewable energy technology transfer and provide experience for practical application and policies.
28 June 2009
The agreements signed with Sterling Investments and Development Lanka (Private) Limited and D M L Holdings (Private) Limited will lead to manufacturing of cement and fertilizer for export. The UK based AML Products, the collaborator, engages in trading commodities in Eastern Europe. The two ventures will create 100 new employment opportunities initially and is expected to commence commercial operations within two months.
The investment agreement with Sterling Investments and Development Lanka (Private) Limited worth US $ 5 million is for a project for grinding and bagging of cement. The venture will establish four state-of-the-art manufacturing plants, including Galle, Vavuniya and Colombo. The products will be exported to countries such as Tanzania and Libya, and will also be provided to the local market.
D M L Holdings, a project under Nipayum Sri Lanka 300 Enterprises Programme signed an agreement to manufacture fertilizer for local and export markets. The fertilizer will be manufactured in a fully automated state-of-the art manufacturing plant at Wenappuwa using locally available raw material. The company will manufacture fertilizer such as single super phosphate, triple super phosphate, and diammonium phosphate. The products will be provided to the local market and also exported to countries such as Tanzania, Libya and Bangladesh.(JS)
- Government Information Department
International Conference on Trade Facilitation held on 26th June 2009. By Federation of Chambers of Commerce and Industry of Sri Lanka
Minister Bogollagam in his remarks highlighted that the Sri Lanka Government, by defeating LTTE terrorism, has brought about an environment that is conducive for the greater growth of the economy. The Minister stressed that the private sector must now take advantage of the opportunities created in the post conflict scenario in Sri Lanka.
It was noted by the Minister that Sri Lanka’s economy has strengths in the agricultural, industrial and service sectors. Sri Lanka’s economy has shown great resilience even in the face of LTTE terrorism and the December 2004 Indian Ocean Tsunami. The Minister was confident that in a vibrant new environment, the Sri Lanka economy will achieve even greater heights.
The Minister stressed the attractiveness of Sri Lanka’s connectivity as a location. Positioned at the centre point of South Asia, both politically, as the Chair of SAARC and geographically, Sri Lanka is also the centre point between the Far East and Middle East. Sri Lanka’s connectivity is enhanced by its developed physical infrastructure and services, including air services, sea routes and emerging ports such as Hambantota and Colombo South. Sri Lanka ’s solid infrastructure improves the potential for trade facilitation. In terms of the international framework on trade, Sri Lanka has espoused liberal economic policies. The private sector has been encouraged to act as the engine of growth.
In September, the Minister said, Sri Lanka will be taking over the Chair of the AsiaIn n Cooperation Dialogue (ACD), which has a membership of 33 countries. The ACD Ministerial Meeting will be hosted in Colombo in October. Sri Lanka is selected by its peers to receive such opportunities because it positions itself as a country that is business friendly.
Minister Bogollagama highlighted in detail the opportunities available for business under the free trade agreements signed by Sri Lanka with India and with Pakistan respectively.
In conclusion, the Minister noted that the International Conference was timely given that Sri Lanka is at an important juncture and it is the right time for the private sector to take the lead in the post conflict scenario, and that the Government would assist in such efforts aimed at developing the Country’s economy.
The Commonwealth Secretariat is assisting the government of Sri Lanka, through the Federation of Chambers of Commerce and Industry to highlight recent trade facilitation initiatives undertaken by international organizations, for the benefit of Sri Lankan trade facilitation practitioners and policy makers in both the private and the public sectors.
- Ministry of Foreign Affairs
Since the end of Sri Lanka's 26-year civil war, the country has become an attractive destination for foreign investors from around the world to explore business and investment opportunities.
The Thai-Sri Lanka Chamber of Commerce, in association with the Sri Lankan Board of Investment (BoI) and the Sri Lankan Embassy, hosted an investment forum entitled "Emerging Peace and Business Opportunities in Sri Lanka" on Monday, to explain that country's new business climate.
"Sri Lanka is like a virgin land for investors, and the time to invest in Sri Lanka is right now," said Anura Priyadarshana Yapa, Sri Lanka's enterprise-development, investment-promotion and media minister.
He said many business opportunities awaited Thai investors. The target sectors for Thailand include textiles and garments, gems and jewellery, food processing, rubber-based products, agricultural products, business-process outsourcing and tourism.
Investors in Sri Lanka can also enjoy special tariff preferences when using the country to enter markets in India, Pakistan and Europe, he said.
Sri Lanka is the perfect gateway to South Asia. It is a regional trading hub, with Colombo the most important port in South Asia, with cargo trans-shipments accounting for 70 per cent of traffic.
"Thailand is our third-largest investor in Southeast Asia, after Malaysia and Singapore. Therefore, we are here to tell Thai investors how attractive we are to foreign investors. We are confident that the investment from those two countries [Malaysia and Singapore] will increase significantly over a period of time," said Duminda Ariyasinghe, executive director of the Sri Lankan BoI.
Thai investment in Sri Lanka is worth US$13 million (Bt444 million) from three projects. An inflow of foreign direct investment to Sri Lanka has increased continuously, from $734 million in 2007 to $889 million last year and an estimated $1 billion this year, and this despite the global economic crisis, he said.
Statistics from the Sri Lankan Board of Investment show Malaysia is the country's largest foreign investor, followed by India, the Netherlands, the UK and Luxembourg.
24 June 2009
“Resilience shown by Sri Lankan economy in stormy seas would stand it in good stead in calmer waters
Sri Lanka’s Ambassador to Belgium, Luxemburg and the EU Ravinatha Aryasinha has said with the ending of the armed conflict, the main impediment to Sri Lanka reaching its full potential has been removed, and Sri Lankans were keen to shift gears and move on focusing on development and bringing peace and economic prosperity to the entire country. He said the resilience the Sri Lankan economy showed in the past navigating through stormy seas, would hold it in good stead as it entered calmer waters.
Ambassador Aryasinha made these observations when he inaugurated a 3 day programme (2-4 June 2009) to attract investment from Belgium and Luxemburg to Sri Lanka, promoting the new era of peace and stability in the country. Organized by the Sri Lanka Embassy in collaboration with the Board of Investment (BOI) of Sri Lanka, the Brussels Enterprises Commerce & Industry (BECI) and the Belgolux-Sri Lanka Business Council, the programme comprised an Investment forum, one to one meetings with potential investors, and meetings with the Deputy Mayor of Antwerp and leaders of the Antwerp Ports Authority and Diamond industry.
Ambassador Aryasinha said it was of particular significance that the first overseas Investment Forum by the BOI in Europe was being conducted in Brussels, regarded as the capital of Europe, only two weeks after the Sri Lanka security forces had comprehensively defeated the LTTE.
The Ambassador emphasized that the investment promotion programme was part of a broader economic promotion initiative launched by the Embassy since the beginning of 2009, in anticipation of Sri Lanka opening a new chapter in its history. It had included the re-launch of the BELGOLUX-Sri Lanka Business Council, the participation of Sri Lankan exporters within an unified pavilion at the European Seafood Exposition, a Sri Lanka Sea Food Festival, launch of the the rebranding of Sri Lanka Tourism and promotion of Sri Lankan Airlines.
Activities lined up for the rest of this year included commodity specific promotion of Ceylon Tea and Sri Lanka Tourism in Belgium, a trade & investment promotion mission to Sri Lanka organized by the Flanders Trade and Investment (FTI) agency of Belgium and the production of a tourism promotional programme on Sri Lanka by prominent Belgian Broadcaster EEN-TV and also cooperation between the Ports Authorities of Belgium and Sri Lanka to operationalize the Maritime Transport Agreement signed between the two countries in 2003.
Ambassador Aryasinha called on Governments of EU Member States, to facilitate change of perception on Sri Lanka through an early revision of travel advisories, taking into account the significantly changed security situation in Sri Lanka. He also called on them to encourage trade and investment with Sri Lanka by their business sectors, as this would be a meaningful way of ensuring economic empowerment and the restoration of normalcy in the lifes of particularly the people of the Northern and Eastern Provinces.
Addressing the Business Forum attended by a cross section of leading business personalities involved in the tourism, ports and logistics, confectionary, banking and finance, light
engineering, mining, agriculture and gem and jewellery sectors, Executive Director Promotion & Mega Projects of the BOI Mr. Shivan de Silva, outlined the reasons as to why Sri Lanka is an attractive investment destination and informed the audience of specific investment opportunities available in Sri Lanka.
With Free Trade Agreements with both India and Pakistan, Sri Lanka provided investors openings to the vast market of the Sub Continent. He also emphasized the potential investment opportunities on a Public - Private Partnership basis that would be available following the opening up of the Eastern and Northern Provinces for development after decades. He said additional incentives to attract investors to these areas will be announced shortly. Mr. de Silva was emphatic that the investment sector was poised for take off. He noted that a report released by the HSBC Global Research on 25 May 2009 had forecasted that there would be a rush to invest in Sri Lanka as there are great opportunities- tourism, export of software and IT enabled services such as IT related business process outsourcing (BPO), and manufacturing being the key sectors ripe for Foreign Direct Investment.
Testimonials of Belgian Investor experiences in Sri Lanka were provided by senior representatives from two leading largest Belgian companies operating in Sri Lanka for over 20 years. Mr. Dirk Impens, Managing Director of Tyre manufacturers Tweco (Loadstar) and Mr. Manu Jans, Director of Cigar manufacturers J. Cortes Cigars NV (United Tobacco Processing Limited) delivered strong endorsements on making Sri Lanka an investment destination.
Mr. Jean-Philippe Mergen, Director International, BECI in his welcome address noted that the programme was launched at an opportune moment with the end of the armed hostilities in Sri Lanka after a period of 30 years and the country was now poised to achieve strong economic growth. He said the BECI would support the trade and investment mission to Sri Lanka scheduled for later this year.
In concluding remarks Mr. Eddy Tondeur, Operations Manager, Trelleborg, who is also the Vice President of the Belgolux-Sri Lanka Business Council, reiterated the Council’s commitment towards the development of trade and investment ties with Sri Lanka.
The BOI delegation and the Officials of the Sri Lanka Embassy in Brussels also held discussions with the Deputy Mayor of Antwerp Mr. Philip Heylen and leading Business Personalities in Antwerp, Flanders Trade and Investment Belgium. The programme was coordinated by Dr. Dayaratna Silva, Minister (Commercial and Economic) of the Embassy of Sri Lanka in Brussels, while Mrs. Monique De Decker, Honorary Consul for Sri Lanka in Belgium assisted in the facilitation of the programme.