Interview: Dumindra Ratnayaka
What steps are being taken in 2018 to further develop Sri Lanka as an attractive destination for FDI?
DUMINDRA RATNAYAKA: The BOI, which is under the umbrella of the Ministry of Development Strategies and International Trade, has taken steps in 2018 to increase the attractiveness of the service it offers to investors. At a time when there is considerable competition between countries for FDI, it is very important to be able to resolve issues in a timely manner, which means arriving at a decision rapidly when evaluating new projects.
In Sri Lanka a number of new mechanisms have been developed to minimise the time taken to approve a project. This is done through the single window concept and the Single Window Investment Approvals Committee, which helps to overcome some of the bottlenecks that had previously hampered the realisation of promising investments. The purpose of this mechanism is to arrive at a decision quickly. The process has a specially designed template developed by McKinsey that screens project proposals and selects those best suited to the country. There are also some high-powered committees, including the Investment Approvals Facilitation Committee, the Officials Committee on Economic Management and the Cabinet Committee on Economic Management, which all aid in the evaluation of projects.
How can closer relationships with China and Singapore improve FDI inflows?
RATNAYAKA: The bilateral relationships with Singapore and China are very promising and are likely to create considerable potential for FDI. Sri Lanka has recently signed a free trade agreement (FTA) with Singapore and is in negotiations with China for an FTA. The pattern of investment has changed in recent years, and the main focus is now on East Asia, as China, Malaysia and Singapore, alongside India, have emerged as leading investors in Sri Lanka. We therefore need to better understand these new economic partners, in order to convince them that we offer the best possible environment for investment.
We have focused on developing promotional tools particularly for those countries, such as information documents, corporate videos and our website translated into Chinese, Japanese and Korean. The BOI has also hosted a Japanese adviser for several years to help us communicate with leading Japanese companies and entrepreneurs. Furthermore, we have officers who speak Chinese and Japanese to assist with the growing number of visiting delegations from those countries. Asia is already important to Sri Lanka in terms of tourism, trade and investment, and will continue to play such a significant role in the years to come.
How can Sri Lanka attract more sustainable investments and support diversification?
RATNAYAKA: At the BOI the focus has always been on attracting sustainable investments, as they create employment and result in the creation of wealth. We want investments for the purpose of benefitting the society at large. It can be said that a healthy economy is one which has many small and medium-sized enterprises because this is a reflection of diversity, creativity and the spirit of enterprise. Sri Lanka’s most daunting challenge will be to succeed in diversifying its export base, which is still dependent on a small number of largely traditional goods and services.
To what extent can the BOI help improve exports to support export revenue targets?
RATNAYAKA: FDI plays an important role in the exports of a relatively small economy such as Sri Lanka. To achieve the target of $20bn in export revenue by 2020, the nation will need to attract more FDI. Export industries will need to produce a greater variety of value-added products, which requires advanced technology in the production process. This is very important for the country to achieve higher export earnings.
