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Foreign investment key for development - Ravi K.

by Rashomi Silva

Developed countries have discovered that positive results outweigh the negative factors of investing in developing countries, Trade and Consumer Affairs Minister Ravi Karunanayake said yesterday.

He was delivering the opening address at a seminar on International Investment Agreements.

The Minister said: "Investment is a vital component for development for countries like Sri Lanka which have lesser resources. Foreign investment is the key factor to obtain resources and 'know how' for development. Therefore developing countries are competing to attract investors by offering various incentives and facilities.

Since 1994 the global foreign direct investment (FDI) flow has increased at a mega rate of 26 per cent per annum, Karunanayake said. However, developed countries have enjoyed larger portion of the FDI whilst developing countries get a marginal amount. In 1997, 73 per cent of the FDI went to developed countries whereas the developing countries received only 24 per cent.

The Minister said the Department of Commerce and the Board of Investment jointly organised the seminar to recognise the importance of a possible multilateral investment agreement in the near future.

The seminar will cover the implications, complications and the benefits of a multilateral agreement and help Sri Lanka with in-depth knowledge for formulating its position at the next ministerial meeting to be held in Mexico.

The Minister thanked the World Trade Organisation (WTO) for providing services of its experts for seminars organised in Sri Lanka. WTO counsellors of Trade and Investment Marc Auboin and John Hancock were present.

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