'Strong KPMG ratings signify growing Int'l confidence in SL'
The highest over subscription ever seen for a Sri Lankan
international bond in April and KPMG's latest positive Change Readiness
Index ranking for Sri Lanka show the growing international investor
confidence on the country. And Sri Lanka prefers patient investments to
hot money. "Sri Lanka is has entered a new era of development thanks to
the visionary leadership of President Mahinda Rajapaksa.
Minister of Industry and Commerce Rishad Bathiudeen, (seated
second from left) briefs Sri Lanka’s FDI and investment
opportunities to members of Executive Roundtable on “Cross
Regional Trade and Investment Roundup |
The Sri Lankan banking giant Bank of Ceylon's $500 million
international bond was immediately oversubscribed to $ 3.86 billion last
week which is a 7.7 times oversubscription of the first international
bond issued by a bank in the country which is a huge success.
And I am pleased to inform you that we are also now better prepared
and adaptable, in that, only on April 26 that Sri Lanka has been
positively highlighted by the Global KPMG-ODI Change Readiness Index
that shows, which countries are better prepared to face global change.
Among 60 developing and emerging economies Sri Lanka achieved rank 22
which is even above the rankings of some BRIC countries thereby ensuring
the capability of our government and the country as a whole to face
international economic challenges" said Rishad Bathiudeen, Minister of
Industry and Commerce of Sri Lanka.
Minister Bathiudeen was briefing the influential "Cross Regional
Trade and Investment Roundup" Executive Roundtable on 01 May which was
keenly awaiting for Sri Lanka's investment message at Dubai Annual
Investment Meeting at the Maktoum Hall, Dubai International Convention
and Exhibition Centre.
Among the roundtable members were Gerald Tremblay (Mayor, City of
Montreal, Canada), Temir Sariev (Minister of Economy and Antimonopoly
Policy, Kyrgyzstan), Olesegun Aganga (Minister of Trade and Investment,
Nigeria), Pariq Puri (Chief Executive, Trade Development Authority,
Pakistan), Sami Al Qamzi (Director General, Dubai Department of Economic
Development) and Ponnala Lakshmaih (Minister of IT & C, Government of
Andhra Pradesh, India).
AIM has now reportedly become the sought after international level
foreign trade and FDI staple event for emerging economies and frontier
markets, due to its special focus on FDI and international trading for
emerging economies in a recession climate, and has drawn wider attention
and more than 3,000 expert and investors, including 45 foreign trade and
Ministerial delegations were present at 1 May's event in Dubai, showing
the growing importance of the event to which only 8 Ministerial
delegations attended in 2011.
Organised by the Ministry of Foreign Trade of Dubai, AIM is
reportedly the first event of its kind in the Middle East 'to bring on
one platform investment opportunities from all over the world.'
During the Executive Roundtable and thereafter, strong interest was
shown by both members of the Table and other international investment
experts on FDI and investing in Sri Lanka.
Interestingly, inquiries also focused on the investment facilitation
procedure and processes and the nature and the term of investments Sri
Lanka is looking for. Responding to these inquiries, Minister Bathiudeen
has said: "Sri Lanka encourages 'patient investments' of 10 to 30 year
term, rather than 'hot investments' which are short term and also,
environment friendly green investments. In 2011, FDI inflows exceeded
the government's target of $ 1 billion and the global banking giant HSBC
reported that high numbers of potential investors from China, India and
Singapore, making inquiries on Sri Lanka.
International investor confidence on Sri Lanka was also evident when
Sri Lanka recorded the highest ever gross inflows of FDI in 2011. FDI
including loans, increased to US $ 1,066 million in 2011 compared to US
$ 516 million in 2010. During 2011 US $ 110 million of loans were
received by the Board of Investment approved companies compared to US
dollars 39 million in 2010.
Initiatives taken to streamline the approval process by establishing
the 'one-stop-unit' concept and speed up development of prime
infrastructure facilities resulted in higher FDI inflows. In fact a
noticeable change is seen in sector-wise composition of FDI inflows.
Hotels and restaurant sector (20%), attracted most FDI inflows in 2011
followed by the Telecommunication sector (18%) which used to be the
dominant sector in recent years.
The World Bank Doing Business indicators show favourable values on
the factors of "Starting a Business", "Resolving Insolvency",
"Protecting investors", and "Trading Across Borders" for Sri Lanka. The
Board of Investments (BoI) is the central facilitation point for
overseas investors. Its companies account for nearly 65% of Sri Lankan
exports. BoI carries a mandate encompassing the entire island.
The provisions of an agreement with the BOI remain valid for the life
of the enterprise and unlike in many countries successive governments
cannot change these provisions which ensure the stability of your
investments.
The safety of investments by international investors from the 27
countries that signed bilateral Investment Protection Agreements with
Sri Lanka is guaranteed by the Constitution. I am pleased to state that
Sri Lanka reports single digit inflation in 2011 for the third
consecutive year recording 6.7% inflation in 2011. In fact Sri Lanka
believes that due to the uncertain outlook for global commodity prices a
key challenge ahead for the country would be to maintain inflation at
mid-single digit levels and has begun policy level adjustments to this
end. Due to the new economic upswing since 2009 private consumption
increased helped by demand for goods from North and Eastern provinces.
The low level inflation continues to promote consumption and I believe
this is good news for the representatives of international trading
houses who want to enter our market as well."
Responding to what sectors are chosen, Minister Bathiudeen said: "I
am pleased to inform you that in 2011 incoming private investments
focused on the sectors of tourism, telecommunications, manufacturing
specially apparel, IT/BPO, housing and real estate. During the
successful bilateral TIFA trade talks with the USA held in Colombo in
the first week of April, Michael J Delaney, the Assistant US Trade
Representative of South and Central Asia announced that the US is
pleased with the high quality of our apparel products and said that our
Expo 2102 international mega show successfully concluded in March could
help bring more apparel investments to Sri Lanka.
Sri Lanka is also entering the Pharmaceutical manufacturing arena.
Showing investor confidence in our pharmaceutical sector the global
giant GlaxoSmithKline (GSK) started the first ever solid paracetamol
production facility by a multinational in the country on 24 April. The
facility located in the suburb of Colombo has an annual volume of 2.5
billion of any solid tablet.
Also the first exclusive pharmaceutical manufacturing zone is coming
up in the city of Kurunegala in the North Western Province.
My Ministry has already commenced preliminary work on this zone and
we invite you to invest here and be entitled to the valuable government
buyback guarantees for your pharmaceutical production output, coming
from this zone."
Responding to the progress in the tourism industry, Minister
Bathiudeen said: "A South Asian tourism destination the country now
targets $2.5 Bn tourism earnings by 2016. Tourism is one of the top
contributors to the country's GDP similar to exports which rose by 22.4%
in 2011.
Affirming confidence in our tourist industry even other important
tourism destinations such as Maldives and Seychelles have already
expressed their interest to promote joint tour packages with Sri Lanka.
I should stress that both tourism and exports successes were achieved
thanks to the valuable guidance provided to our economic progress by
Basil Rajapaksa, our Minister of Economic Development."
During the opening remarks, Sheikha Lubna bint Khalid bin Sultan Al
Qasimi, UAE Minister of Foreign Trade, welcomed all participants. "The
UAE had attracted $60 billion in the last five years, while its
investments to foreign nations had exceeded $327 billion" she said.
Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime
Minister of the UAE and Ruler of Dubai was also in attendance at the
opening event.
|