Sept 27, 2007 (LBO) – Sri Lanka’s new company law has made it easier to start new ventures but winding up procedures are still cumbersome, a new World Bank study has said. In countries where bankruptcy is inefficient, unviable businesses linger for years, keeping assets and human capital from being reallocated to more productive uses, said the study on ‘Doing Business’ by the International Finance Corporation, the bank’s private sector lending arm.
Sri Lanka ranked 39th when it came to winding up a business with creditors spending on average 1.7 years to recover their money and only getting 44.6 cents on the dollar.
Restrictions on business activity limit economic growth and employment generation.
Sri Lanka has tight labour laws, some of the tightest labour laws in the region mostly applies to the formal business sector.
Limited employment opportunities at home have driven more than a million Sri Lankans abroad to areas like the Middle East where they work under precarious conditions.
Even now, a teenager who sought work as a housemaid has been condemned and is in death row in Saudi Arabia with an international human rights watchdog and Sri Lank