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| Wednesday, 17 September 2003 |
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Major change in BOI structure, culture vital for more investments By Channa Kasturisinghe The Investment Policy Review of Sri Lanka conducted by UNCTAD has felt the need to effect a major change in the Board of Investment's (BOI) structure and culture in order to make Sri Lanka's investment climate more competitive. Rory P. Allen, Principal Investment Advisor, of the United Nations Conference on Trade and Development (UNCTAD) said that the BOI's core functions and non-core functions should be redefined and make it a highly pro-active agency that aggressively markets Sri Lanka. He was speaking at a Investment Policy Review meeting in Colombo on Monday The BOI was formulated in 1978, as the Greater Colombo Economic Commission to promote private investment including export-oriented manufacturing industries. Its name was changed to the Board of Investment in 1992, as a part of an effort to increase its effectiveness attracting Foreign Direct Investment FDI. The present Government has embarked on a program to restructure the BOI to make it a more effective organisation to attract investments in keeping with the objectives of Regaining Sri Lanka. Allen said that the BOI had about of 1,300 staff positions in 15 departments and that the once the BOI is strengthened with redefined core functions it would need only 250 staff positions. The BOI has too many roles to play including developing and managing export processing zones, and industrial parks, regulating and promoting Foreign Direct Investment (FDI) and facilitating investment. It is a regulator in respect of building, town planning, environmental permits for its clients, a customs' authority for its clients and a fiscal incentives' administrator. With the new BOI Act it will have to play the additional role of a regional economic development organisation. He said that Sri Lanka's performance in generating national private investments and attracting FDI has been poor even following the establishment of the BOI as it has been weak in its capacity in FDI attraction. "Although the BOI has been strongly facilitating larger investors it has not helped in improving the regulatory, tax and operating conditions of small to medium scale Sri Lankan investors," he said The Investment Policy Review report has recommended that the BOI should focus mainly on four areas including promoting Sri Lanka by actively targeting foreign investors in areas of potential and economic significance, endeavour to achieve a better investment climate needed to make Sri Lanka a first-choice regional hub, facilitating the operations of national investors and helping them to form linkages with foreign investors and regulation of FDI entry consistent with national policy. It has also recommended that the BOI should divest the existing activities including development and management of zones and industrial parks, investor regulatory services and granting and administering fiscal incentives. It also said that the budget required should come from the Treasury and the BOI's current revenue generating activities may wind down. "The BOI's annual budget is approximately US$ 14 million. There is no other investment promotion agency in the world with so many functions and a few with more staff," the report said. |
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