Sri Lanka hit by regime uncertainty

Nov 08, 2011 (LBO) – Sri Lanka’s investment prospects would be hurt by sudden changes in policy and laws relating to property rights and investment returns analysts said, describing a condition identified by economists as ‘regime uncertainty’. “Consistent government policy: that is what investors are looking for,” Sujeewa Mudalige, President of the Institute of Chartered Accountants of Sri Lanka told a business forum on taxation organized by Sri Lanka’s Institute of Policy Studies.

“In my view when an investor comes in they want to make sure, your tax laws will be consistent, your labour rules will be consistent.

“You will not have a pension scheme which will be all of a suddenly brought in from somewhere. You will not have laws and regulations which will not come in without adequate consultation and discussion.”

Expropriation

Sri Lanka abandoned an attempt to build a third state controlled pension fund out of private sector worker’s salary deduction earlier this year after a protesting worker in an export industrial zone was killed by police fire.

Sri Lanka is currently in the process of bringing a law to expropriate assets of dozens of private businesses, which the state says is underperforming or where asset