Mar 28, 2015 (LBO) – Sri Lanka needs to ease foreign investment entry obstacles to attract more foreign direct investment, finance minister Ravi Karunanayake says.
Karunanayake made this comment while delivering a keynote address at the 18th Asian Investment Conference organised by Credit Suisse.
The conference is an exclusive business gathering in the Asia Pacific region attended by prominent political, economic, financial, and academic figures, institutional and hedge fund investors as well as high-net-worth individuals and business leaders.
Karunanayake was quoted as saying, that “little Sri Lanka needs help to meet its people’s expectations and become the pearl of the Indian Ocean.”
“Almost three decades of civil war and years of misrule, meant that Sri Lanka missed the opportunity to be to India what Hong Kong is to China.”
His government (Sri Lanka’s) intends to revise investment rules to attract overseas flows and it will continue to cement trading relationships with other nations.
Sri Lanka is in the process of linking free trade agreements (FTA) with China and United States while the island has already signed FTA’s with India and Pakistan.
Karunanayake went on to say that the external account is a problem.
With almost half a percent of the country’s public borrowing is denominated in foreign currencies, Karunanayake said that he favors a stronger rupee to reduce debt servicing costs.
However he says higher currency penalizes exporters. The solution, he said, is to ease barriers of entry for foreign investment which would raise skill levels and efficiency.
Karunanayake forecasts 7-7.5 percent GDP growth for 2015 which will be driven by tourism, agriculture and petroleum.
He identified logistics, infrastructure and housing as sectors that need to be improved.