BOI seminar on peace, development in the East

One of the greatest challenges the country will face after the current conflict ends, will be to take steps to begin the development process in the Northern and Eastern provinces.

The BOI has in recent years, developed a strategy to rebuild the areas devastated by the war. This strategy is heavily dependent on the participation of the private sector. It has already borne fruit in the Eastern Province and its lessons are largely applicable to the North as soon as peace returns to the troubled parts of the island.

The recent statement by Secretary to the Ministry of Foreign Affairs Dr. Palitha Kohona saying that the conflict had cost Sri Lanka the equivalent of a loss of US$ 200 billion, places in a macroeconomic context the extent of the damage suffered by the economy as well lost opportunity.

This figure only expresses the problem in financial terms and does not take into account the damage done to the infrastructure of the country, the disruption to her educational system and the social cost. These factors have slowed down Sri Lanka's economic and social development.

The BOI has taken some initiatives to bring about development into the Northern and Eastern areas.

The organization has focused its efforts on infrastructure development by creating and upgrading the facilities that are so badly needed by investors. Investment will be channelled into the affected areas by developing large-scale infrastructure projects, such as a new investment-processing zone and a 450 mw power plant in Trincomalee. A preliminary study on power for the proposed zone in Trincomalee has already been completed.

In addition there are plans to develop agro-industries and industrial estates in Batticaloa and at Uhana, Ampara.

To get the private sector's participation in this development, the BOI hosted an Investment Forum in Batticaloa and Ampara on April 3 and 4. The forum was led by Director Promotions and Mega Projects Vidharshan Fernando.

The first part of the forum was held in Batticaloa where around 65 businessmen and prospective investors participated. A detailed presentation was made on the investment opportunities available in the Eastern Province after which an interactive Q and A session was held for the audience to express their views. The audience showed significant interest in projects related to the agriculture, manufacturing and tourism industries.

The second part of the forum was held in Ampara with the participation of over 30 businessmen and prospective investors. The agriculture, manufacturing and tourism industries again generated most of the interest among the audience.

In addition to all these efforts, the BOI has created an attractive regime of incentives to encourage investors to develop projects in the Northern and Eastern Provinces under the BOI's 300 Enterprise Program.

Among the sectors where the North and East have clear comparative advantages include manufacturing of products such as apparel, food and beverages, wood products, rubber and building of fishing boats and fishing gear.

In the same light the BOI wants to see the private sector take a leading role in the development of tourism and recreation industries and in the construction of new hotels.

The Eastern Province has some of the best beaches in the country and Sri Lanka's tourism industry will benefit once again from having two enticing coastlines to market.

There is also a considerable potential for agriculture and agro-based industries. In this sector the BOI is encouraging investors to grow new crops and the adoption of post harvest technologies, but also to set up the infrastructure needed for agro industries such as rice mills, ice manufacturing plants and cold rooms. The private sector is also encouraged to develop dairy farming and livestock development, and to cultivate and process vegetables.

Sri Lanka's fisheries is largely untapped and the BOI is actively promoting the fisheries sector in the newly liberated areas. This will be a growth sector for the future.

The BOI understands and appreciates that the private sector companies will be taking heavy risks when opting to invest in the Northern and Eastern Provinces.

Investments in these provinces will be considered investments made in the most difficult areas under the BOI's 300 Enterprises Program.

The end of the war must first of all be seen as an opportunity for Sri Lanka to develop a largely untapped area with considerable potential. In this endeavour the private sector will play a leading role. Economic development will help address some of the social and political grievances that have led to problems in the past.