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Investors they say are attracted to countries where there is less corruption and better governance.

This may not be true all the time. Investors are also attracted to countries, which offer lots of tax breaks, and also plenty of cheap labour. A major plus point is of course places where there are huge and preferably untapped markets such as China and India.

Sri Lanka, being a small country, is not a big market and because we have had a more-or-less open economy for about 25 years, many operators have already explored our market.

We also do not have a vast pool of cheap labour in comparison with countries such as India, Bangladesh and China, although our workers are highly literate and are easily trainable.

Therefore it is vitally important that we strive to make good governance practices a hallmark of doing business in Sri Lanka so that we can get Brownie points from the investor community and make this country more attractive for them to set up projects.

In an increasingly globalised world, we have to realise that even our own investors can easily set up businesses overseas if the climate is not conducive in Sri Lanka. Surely many investors, including Sri Lankans would prefer countries such as Singapore where the systems are highly transparent and the public administration has a reputation for honesty and efficiency.

The key agency dealing with investment, both foreign and local, is the Board of Investment (BOI) and the recent government moves to make this organisation more efficient and vested with more authority is indeed very welcome.

The government will convert the BOI into an Authority with greater powers and also decentralise the working of this agency by setting up separate boards to administer different regions with regional bias.

This is expected to take investment outside the Western Province, which has up to now attracted more investor capital than any other region of the country.

These governmental moves however are merely setting the background and the framework for one-window operations, which will make matters easier for investors. We hope that this decentralisation will remove a bugbear of investors who frequently complain that although they have BOI approval for projects local government officials and Provincial Councils often harass them in mid-implementation.

While these moves will help increase transparency it is important that the country as a whole improve our culture of governance if we are to show the investor that this is a good place to put your money.

There is a lesson to be learned from the East Asian financial crisis. In that region, which had seen massive economic growth, investor capital fled first from the countries where there had been evidence of collusion between big time corporations and the government to manipulate the stock market.

In most countries there has to be a relationship between government and the big companies, if they are colluding to cheat investors then the country earns a bad name. In that context the recent decisions taken by the government and the Attorney General regarding the Securities and Exchange Commission scandal augurs well for the future.

At the same time the private sector must also step in to introduce good governance practices. Better accounting and auditing, a sense of corporate responsibility towards shareholders and greater transparency within the companies will go a long way in improving the credibility of companies in the eyes of investors.

This will give greater standing to our bourse, which already has a good reputation for transparency thanks to its modern systems. A more credible and solid stock market will encourage both local and foreign companies to list here and act as a magnet for investors.

All these measures must be driven by good intentions to improve the investor climate in Sri Lanka, for without being able to attract foreign investment and hold our own capital within our shores we will not be able to achieve the economic growth targets we need to reach.

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