Investments will flow into Sri Lanka after polls: CBK
June 16, 2015 (LBO) – Investors are waiting for the upcoming election to finish in order to bring in new projects to Sri Lanka, former President Chandrika Bandaranayake Kumaratunge said.
“We need to bring in investments and now the investors are ready to come,” she said at a recent media conference.
“Because they know that the polls are impending they have come and had the necessary discussions and put everything in place but will come only post election.
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Kumaratunge says that she had met several European investors in the past few years that had been keen to start projects in the Island but had faced difficulty during the Rajapaksa rule.
“I can tell you especially big European investors who had come and had discussions with the Board of Investment and were very keen to set up here but the only issue they had was that everyone wanted a commission,”
“Not one but all the departments and the politicians, some time they said the whole family wanted commissions,”
Now she says this issue is not there so they are all ready and waiting to invest.
Sri Lanka’s new 100 day administration took a back seat in setting a foreign direct investment goal for 2015 after authorities failed to meet their targets in the recent past.
In 2014 FDI increased by 9.2 per cent from 84 million US dollars to one billion US dollars according to statistics from the Central Bank’s annual report while FDI in 2013 declined by 2.7 per cent from a year earlier to 916 million US dollars.
According to investments advisors, Sri Lanka’s policy inconsistency is unhealthy for foreign investments and the mini budget 2015 also did not sent the right signals to the FDI community.
Wearing fancy suits, sitting in AC rooms looking at fancy colored charts and making mockery by this “alleged” racketeer. ground reality is that still Sri Lankan delicate girls and young women go to work in Arab world to send money to their poor homes….
Sri Lanka became a middle income nation under the last Rajapakse regime. Unfortunately, due to petty political revenge and maybe due to incompetence, the rapid growth of this economy is now stagnating, under the new Sirisena/Ranil/Chandrika regime. Though already late, it is time to restart all those major infrastructure development projects like the Port City, which have been stopped by the new regime, violating contractual agreements, and costing the nation dearly in paying damages to the contractors, out of funds that could have been used for development.
There will be no alternative than resorting to “tight monetary policy path” to control the situation when fiscal front of the economy is battling like current scenario in SL. I expect at least 1.5-2% escalation in policy rate toward the end of the year, under the current scenario.
This is called the central bankers delema world over.Consider a patient with many ailments.High blood pressure ,Cronic kidny dieses, Diabetes & High clorostol levels.Medicine for blood pressure & Diabetes is adverse for kidny ,whilst heavy treatment for clorostol could affect kidny & the liver & sugar control ect ..Combinations & permutations are many.Bottom line is every ailment could be life threatening & needes to be controlled.So we come back to fundamentals.Nothing is more valuable than maintaining good general health.Those fruits we did not eat,those alchoholes we gulped down with sugar buns in business meetings with less plant based foods have caused serious damage during the carnival season of our life..More weaker the general health for whatever the reasons obviously less choices the doctor ( Banker here) has.What is good for Balance of payments can be bad for the Growth ,What is good for growth is bad for BP ,Inflation(if there is)ect ect.So eventually we come to the fundamental issue (truth)of the value of maintaining good economic health & what habits we should have dropped decades ago & what to keep & how to defend our self from adverse environmental issues.A difficult task that needs to be done.How best is the billion $ evasive answer for many many countries @ this moment.
A little more … just a little more easing on the interest rates. Another 50bps to 100 bps. Keep going, it is necessary. The alternative will cause much pain.
The CCC is probably right in its stance. Closing up never helped anyone. But it should be managed, as they have pointed out. Opening up didn’t do the UK any favours, and it now comes down to a black or white referendum in June.
Points to ponder.In the name of free trade & as a consequence of commodity rout & lack of government support many many like the rubber farmers who were self employed & earned foreign exchange to the country are on the road.The local industry imports latex cheap whilst local estates idle.The crude oil is @ an all time record low whilst the internal selling price of fuel is keptt artificially high may be due to Some economic reasons .What ever the chance that is not available for the millions of self employed in this country is available to CPC & IOC(to repatriate) with few local employees.Why?
“Few companies have already de-listed…” Yes among the few, INCLUDING a Company that is headed by the present CSE chairman.. This review could have been done sometime back, when a series of companies started de-listing. SEC and CSE are spending so much for awareness for the listing of new companies in order to increase market capitalization and depth while, not taking immediate efforts to stop the de-listing of companies that are already listed.
Minimum public float is a must for any new companies listing in CSE and also it should be maintained by the respective listed companies. A public float of 15% to 20% should be required. if not, foreign investors will never take CSE seriously. If you look at current tickers that foreigners hold like JKH and COMB – its due to the depth of the float. so SEC should move to a minimum public float basis. No use crying over this, as other markets such as Singapore and Malaysia also have similar rules.
It is obvious that the more rules that there are, the more people will leave. Some common sense rules are required, but there is such a thing as over-regulation that borders on market manipulation