05th February 2012, www.sundayobserver.lk, By Lalin Fernandopulle
Sri Lanka is a good place to invest as returns on investments are high compared to the United States said International Executive Services Corp (IESC) of USA Vice President Charles Conconi at a ceremony to ink a partnership between IESC and the American Chamber of Commerce (AmCham) to promote foreign direct investment from USA.
He said Sri Lanka’s infrastructure development is conducive to invest and added that IESC will encourage US businessmen to invest in Sri Lanka. Foreign direct investment inflows exceeded its target of$ 1b last year as there was an influx of investment in the tourism sector.
The FDI reached $ 1.07 b by December 2011 and the Government targets $1.75 b investments this year. Sri Lanka received 236 million US dollars in foreign direct investments in the first quarter of 2011.
Tourism apparels and the IT sector were among the key contribution to the growth.
Conconi said the new initiative will help Western economies to focus on Asian supply chains which have expanded operations due to the global demand.
The landmark agreement will boost US FDIs to Sri Lanka which are vital to enhance productivity and economic growth.
IESC is a loan originator for the Enterprise Development (EDN) , a program sponsored by the Overseas Private Investment Corporation (OPIC), an agency of the United States government. OPIC works with the US private sector and helps businesses to gain a foothold, in emerging markets catalysing revenues, jobs and growth opportunities in countries. AmCham President Vijaya Ratnayake said that the critical challenge for Sri Lanka is to increase FDIs to boost productivity and economic development.
“Sri Lanka is targeting an eight percent economic growth rate this year for which an investment growth of 35 percent of the GDP is essential”, Ratnayake said.
The economic growth forecast of 8.3 percent this year was lowered to 8 percent given the slow global economic growth expected this year.
OPIC provides investors with financing, guarantees, political risk insurance and support for private equity investment funds. The Corporation will finance up to US$ 250 million for projects in Sri Lanka. Ratnayake said the SME sector will be a key beneficiary of the partnership.
Political risk insurance for currency iinconvertibility expropriation and political violence for assets and business income are some of the services offered by OPIC.
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