Stable business climate for investors in Sri Lanka - President

SRI LANKA'S Economic policy is designed to ensure a modern and balanced economic management in which domestic enterprises are supported and foreign investments encouraged, said President Mahinda Rajapakse in his address at the Breakfast Meeting with senior corporate leaders of India on December 29, at the Hotel Maurya Sheraton, New Delhi.

Following is the address:

"On my present visit, I have had occasion to discuss various matters that are of bilateral interest to Sri Lanka and India.

My Government is hardly six weeks old. But during this short period, we have been able to give a clear direction to our economic and other policies.

During the election campaign that preceded my victory, our coalition of 26 political parties offered to our citizens and to other stakeholders, a clear policy direction, a common programme and a well-structured plan of implementation.

Our economic policy was also spelt out clearly in my manifesto titled Mahinda Chintana. Our policy is designed to ensure a modern and balanced economic management in which domestic enterprises are supported and foreign investments encouraged. We have, at the same time, set ourselves a GDP growth target of 8% per annum over the next six years.

It is also our stated policy that the benefits of economic development should be genuinely enjoyed by all sections of the people of our country, - and in particular the lower income groups that account for almost 50% of our country's population.

For you as business leaders, the formulation of corporate plans, vision statements, mission statements, goals, strategies and action plans for your own enterprises and business houses, constitutes a routine procedure.

Thereafter, you develop budgets, targets, performance measurement indicators and time frames for implementation. It is by following these processes that a sense of direction and a feeling of accountability develop among your stakeholders. You are then able to move with discipline and confidence towards the realisation of your vision.

I believe that a nation too needs to develop for itself, a clear focus and a sense of purpose. Therefore when presenting my government's first budget on December 8 this year, we linked it in every possible way to the long-term goals of the 'Mahinda Chintana'.

By doing so, we felt we could make sure that our stakeholders would be able to move together, both with a sense of urgency and confidence, towards the achievement of our vision for our country.

It is now our commitment and determination to steer our country's economy towards the creation of new economic opportunities that will enable our people to come out of poverty quickly, permanently, and in a spirit of equity.

Agriculture, livestock, fisheries and plantations, are among the thrust areas of our national development strategy. We shall also provide special assistance to small and medium enterprises - SMEs as they are called, tourism, industries and banking.

Furthermore, our special attention will be directed to infrastructure and rural development, while education, health, skills development, poverty alleviation, good governance and the encouragement of foreign investment will be our priority fields of focus.

We shall also be taking steps to improve productivity, and to create such marketable skills within our labour force that will enable our people to secure employment, both in Sri Lanka and abroad.

To achieve the transformation of our economy in this manner, we seek to mobilise the domestic private sector on the one side, and the foreign investor community on the other.

And, when mobilising the foreign investor community to invest in our country, we look to India's business community as a natural and a strategic partner.

Many Indian firms have identified Sri Lanka as an attractive centre for economic activity and investment in our region. Indian investors are well positioned to benefit immensely from our recently concluded agreements with several important countries and trading blocks.

In fact, many Indian enterprises have already made use of the India-Sri Lanka Free Trade Agreement and started operations in our country.

There has been, in recent years, a significant growth in bilateral trade, economic activity and planned economic partnership between our two countries. We are confident this trend will continue to offer more and more opportunities to the private sector of both our countries.

In our endeavour to develop our country, Sri Lanka attaches great importance to Foreign Direct Investment. My Government has therefore intensified our country's efforts to address the needs and aspirations of investors.

The Board of Investment (BoI) of Sri Lanka is the central body for the facilitation of Direct Foreign Investment in our country.

The BoI which is represented at our meeting today is a 'one-stop-shop' that expedites the approval processes and the setting up of projects in Sri Lanka. It is my hope that you will use the opportunity of this morning's meeting and the meetings that follow, to develop close ties with each other in order to commence, continue and consolidate your businesses in Sri Lanka.

Sri Lanka offers generous incentives across a wide range of sectors, to foreign investors. I am sure that many of these sectors are definitely of interest to Indian investors. Sri Lanka also provides a stable investment climate.

Our environment is one that is known for its friendly and approachable officials, and for its package of fiscal incentives including tax holidays for foreign investments.

In many instances, these benefits are provided, in addition to duty free privileges on the import of capital goods and raw materials for export oriented industries. We also allow 100% foreign ownership in many cases, and we provide for the convenient repatriation of earnings.

We are confident that over the next few years, agro-processing, apparel, dairy, rubber, IT and infrastructure will be prominent among the high-growth sectors of our economy. These sectors will provide immense opportunities both for you in India and for us in Sri Lanka as well.

I understand that the relevant Sri Lankan officials have already made contact with you, to establish the necessary links and identify the possible areas of cooperation. Initiatives that are taken in these areas will be to the mutual benefit of our two countries.

Let me add that I am also conscious of the fact that as we go on to implement our joint efforts, a few problems and bottlenecks could arise.

In this regard, let me assure you that my Government will place immediate and special emphasis on resolving the problems and concerns of investors, through a high level commitment for plan and project implementation by the private sector.

I therefore invite the business leaders present here this morning, - cordially and with confidence, - to establish business ties with Sri Lanka, and take advantage of the attractive opportunities available in our country, to expand your businesses and enhance your profitability.

Sri Lanka and India have enjoyed the warmest bonds of friendship and cooperation from very early times. Let us agree to strengthen these bonds some more, as we jointly face the opportunities and challenges of the 21st century.

And let met assure you, in conclusion, that my Government is totally committed to provide assistance to those of you who are hoping to invest in our country.

We hope we will have the privilege of welcoming many of you soon to Sri Lanka, and we thank you for the confidence placed in our country and wish you all success in your endeavours.