The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group last week pointed out the need for a proper industrial policy and a better investment climate to attract desired levels of Foreign Direct Investment (FDI) into Sri Lanka.
IFC’s country manager for Sri Lanka and the Maldives, Adam Sack delivering the keynote speech at the 21st Annual General Meeting of Industrial Association of Sri Lanka (IASL) urged the Sri Lankan industrial sector to lobby the government to formulate a world class investment climate and to establish a good industrial policy to attract the FDI in achieving the much needed sustainable economic development.
“Sri Lanka improving its ‘Doing Business 2012 report’ ranking to 89 out of 183 countries and becoming the 2nd best in South Asia, ranked above even China and India is alone not enough for it to attract the necessary FDIs”, he said. Sri Lanka must create a world class investment climate with the support of the private sector and make continuous improvements to the industrial policy.
Meanwhile the Executive Director, Research and Policy Advocacy, Board of Investment Dr. I.N Samarappuli said that so far for the first five months the country has attracted less than a quarter of the targeted FDIs for the year which stood at US $ 450 million. However he expressed his optimism over achieving the target of US $ 2 billion by the end of this year.
He pointed out that the foreign investors watch predictability and the consistency of a country’s policy before they invest. “They are continuously in touch with the Sri Lankan media and are well informed on developments in the financial markets. So any development in the local market can send very important signals to the foreign investors who could even change their investment decisions”, he said.
He also emphasized the need for re-directing the country’s Industrial Policy (IP) towards exploiting the comparative advantages created by its strategic location, educated workforce, successful trading history, agricultural products and sophisticated demand created through growing higher middle income class in the island.