November 6, 2011 (AFP) – Sri Lanka’s president has vowed to turn his war-battered nation into the “miracle of Asia,” but a controversial new nationalisation law is seen as a major blow to hopes of wooing foreign capital. The government says the move will boost investor confidence in the south Asian country, hungry for foreign investment as it recovers from decades of ethnic bloodshed that came to an end in 2009.
But the plan has provoked comparisons to Robert Mugabe’s seizure of white-owned land in Zimbabwe, which heralded the collapse of that country’s economy.
President Mahinda Rajapakse’s government is set to introduce the bill, aimed at reviving “under-performing” and “under-utilised” assets, this week in parliament, where his party holds a two-thirds majority.
Colombo already has earmarked 37 firms for take over under the legislation, including the company that owns the Hilton hotel in the capital, and another firm currently constructing a high-rise that is due to accommodate the first Hyatt hotel in Sri Lanka.
“When they (foreign investors) see we’re putting in place systems to ensure better management, they should be encouraged to come and invest here,” government spokesman Keheliya Ram