Outlook 2012 predicts 26-28% private investment upsurge in SL

Ramani KANGARAARACHCHI

The government projects private investments to rise from around 21 percent of GDP in 2011 to about 26-28 percent in the next few years according to Asian Development Outlook 2012.

ADB Country Director Rita O Sullivan at a recent media briefing in Colombo said the government has embarked on an ambitious plan to remove infrastructure bottlenecks and has already undertaken significant investments in some sectors, specially among major infrastructure development initiatives.

As investment is key for increasing supply capacity and bolstering growth the government would like to see a greater role for the private sector through increased investments by both domestic and foreign investors.

Despite the improved political and economic environment , growth in private investment, both domestic and foreign is falling below planned levels as the government has taken only few steps to reduce red tape and improve the business climate, needed to create the conditions for ramping up private investment, she said.

However, investor confidence is a key factor in attracting investment and this requires a predictable policy environment as articulated and reinforced through the legal, regulatory, and institutional framework. Developing that framework will reduce uncertainties in the business environment and avoid unplanned actions that may send mixed signals to potential investors.