Sri Lanka, A Good Place to Invest - IESC Vice President. Higher Returns on Investments Compared to the United States

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.

Related Info :

• The American Chamber of Commerce Discusses Post – Conflict Development Opportunities in Sri Lanka

The American Chamber of Commerce Discusses Post – Conflict Development Opportunities in Sri Lanka

12th December 2009, www.news.lk

The American Chamber of Commerce (AMCHAM) and the US Embassy in Sri Lanka co-hosted a roundtable discussion on reconstruction and rehabilitation in the North and East and new development opportunities which are available in the post-conflict era. The event took place on Wednesday, December 9, 2009 at the Hilton Hotel in Colombo.

The Amcham and the U.S. Embassy brought together business leaders from leading corporations, representatives of regional Chambers of Commerce and USAID for a roundtable discussion with U.S. Assistant Secretary of State Robert O. Blake. The companies which were represented were Hayleys PLC, Chemical Industries (Colombo) PLC, Hatton National Bank, Brandix Lanka Ltd, Daya Group of Companies and Aitken Spence PLC. The Business for Peace Alliance of Regional Chambers of Commerce, the American Chamber of Commerce in Sri Lanka and USAID’s Connecting Regional Economies (CORE) Project also participated.

The business and chamber leaders told Assistant Secretary Blake that there have been many improvements in the Eastern region of Sri Lanka since the defeat of the Tamil Tigers in 2007. Because there are fewer security checkpoints, both trade and personal transportation have improved. In addition, the roads in the East have shown a dramatic improvement in the last two years. The business leaders also explained how the East has great potential in agriculture, fisheries, tourism, and other areas. However, they said, the North, which was just freed from LTTE control in 2009, is not yet as ready for investment as the East. Nevertheless, the fishing industry has begun to rebound since the restrictions on fishing have been lifted and the North has great potential for tourism.

The business leaders agreed that there are still a number of challenges to increased economic growth in the East and North. Worker productivity is low for agricultural production and industrial production, so there needs to be a significant training program, especially vocational training, to prepare for emerging economic opportunities. There is also a great shortage of water supply for agricultural production. The East needs better transportation infrastructure to bring workers to manufacturing plants. Since the East has great agricultural potential, including in dairy production, there is a great need for a cold storage supply chain to bring fresh goods to Colombo and other markets. The East could also benefit from additional investment to bring technology transfer and new economic opportunities.

Finally, Assistant Secretary Blake and the business leaders discussed how the diaspora could assist with reconstruction in the North and East, since its members have both resources and skills. One possibility would be to involve the diaspora in public private partnerships to provide additional educational opportunities in the East and North.