Mar 20, 2015 (LBO) – Sri Lanka’s policy inconsistency is unhealthy for foreign investments while the new mini budget does not send the right signals to the FDI community, an investment advisor said.
“In my role as a banking partner at KPMG, we get lot of investors who come and one of the things they ask all the time is consistency in policy direction,” Reyaz Mihular, Managing Partner of KPMG Sri Lanka, a financial advising company said at the “Conference of capital market 2015’held in Colombo on 18th this month.
“It really upsets them and worries investors. the land act is one example,”
Critics says the new ruler’s interim budget 2015, mostly refers as the “Saradiel budget” approved by the parliament in early February, is only targeted at a basket of goodies promised during the presidential election campaign.
“I don’t look at the interim budget for direction but I will look at the steps after election,” Mihular said.
“Investors asks me what is this one off tax and super gain tax? I keep saying that is one off and don’t look at those for direction,”
“We will see greater clarity with regard to the future. We need to get the election done and dusted soon,”
“Because of the uncertainty people are not going to invest,”
“I have lot of investors saying, let’s wait till the elections are done before come in for projects. Because they would like to see which direction, what would be the policies and etc,”
“So don’t look to the mini budget for direction, wait for more firm policies once the elections are held,”
“The sooner that is done the better.”
Sri Lanka’s foreign direct investment (FDI) was 1,900 million US dollars in 2014.
The island fell short of the targeted 2.0 billion US dollars FDI’s for 2013 and 2.5 billion US dollars for 2014.
Board of investment which now comes under the purview of the investment promotion ministry rejected setting targets for this year and plans to focus on faster procedures to attend to the approvals and establish a one –stop- shop for investment need.
“There is no need to set unrealistic targets and also we don’t want to sell the country for the sake of foreign investments,” Investment Promotion Minister Kabir Hashim told LBO at a interview earlier on the said topic.