ECONOMYNEXT – Sri Lanka is not getting foreign investments as fast as expected with investors becoming picky and political controversy over selling national assets, Finance Minister Basil Rajapaksa said.
“We have great hopes for foreign investments,” Finance Minister Basil Rajapaksa told parliament.
“But I also told in my budget this is political is a debatable item. In some ways it is interpreted as a national asset that is given to foreigners. So we have to do this matter thoughtfully and carefully.
“As a result foreign investments to do come as fast as we expect.”
Sri Lanka’s then opposition started an anti-privatization and anti-foreign investment policy ideology around 2003 backed by the Janatha Vimukthi Peramuna which said the move was ‘selling national assets’.
It was adopted by the then Sri Lanka Freedom Part which started re-taking to the state already privatized companies such as SriLankan Airlines and Shell Gas now Litro.
Tight laws were then brought to prevent foreigners from buying land.
Sri Lanka is now trying to sell a number of real estate in Colombo to bring in foreign investors. In 2011 a number of private firms were also expropriated further clouding matters.
Rajpaksa said foreign investors were also looking to make profits and will go to countries where conditions for operations and terms were better.
“So foreign investor may go for a better country, where more things are given, where they can earn more, where they can earn faster they may go,” Rajapaksa said.
“So we have saying that we are doing this carefully and in a process. But we do not think we will get foreign investments as fast as we think or as fast as we expect.”
Sri Lanka saw 398 million dollars of foreign direct investment flows up to June 2021.
“We have to look at the percentage of dollars,” he said. “Also do not forget that when a foreign investor comes he also takes returns in dollars. He may bring in the first year, but from the next year, he takes them out.
“So we are looking at a way to keep money within the country.”
His remarks came amidst attempts to sell a part of a power plant to a US company, which is tied to compulsory purchases of fuel.
The Chairman of the Board of Investment of Sri Lanka also resigned last week, amid a dispute with unions in part due to a team of highly paid executives hired to speed up projects.
Sri Lanka has also seen an exodus of foreign investors from bond and stock markets amidst heightened monetary instability coming from activist central banking involving targeting the call money rate with liquidity injections. (Colombo/Dec12/2021)
