o postponements or cancellations of investment have been made by potential investors, even though the tsunami – by hurtling this island nation into the doldrums of death and destruction – has shaken the very foundation of its economy.
Confident of Sri Lanka’s future, Board Of Investment (BOI) Chairman Saliya Wickramasuriya, in an exclusive interview with LMD, speaks of development prospects for affected lives and the nation as a whole, amidst the worst natural disaster the world has seen for decades.
“So far we have had no postponements or cancellations of investment, and the only tangible effect the BOI has seen is the request by a few beach-resort projects to enhance their Project Implementation Periods (PIPs), or defer start dates, to take into account possible changes in legislation on coastal governance. On the contrary, we have had several letters from investors assuring us of their intent to proceed with projects as planned,” says Wickramasuriya.
In light of these positive signals, he is emphatic about the need to assure potential investors that despite the huge human and social cost of the disaster, relatively few sectors of the economy have been affected and basic industrial infrastructure still functions as normal. However, he stresses: “Foreign Direct Investment (FDI) is crucial at this stage of our development…” – especially since the country’s dwindling foreign-exchange reserves, plus an open economic policy, makes it vulnerable to external market forces.
As a means of ensuring FDI, he advocates Private Public Partnerships (PPPs), which he says would provide an “excellent opportunity” for foreign participation in rebuilding roads, railways, bridges, power stations, water and sewage plants, and even city developments such as those planned for Galle, Matara, Hambantota and Batticaloa. “This is to say nothing of the reconstruction of tourism-industry real estate and townships to house displaced coastal industry folk,” he adds. Hence, Wickramasuriya expects many large-scale projects to be tendered on a PPP basis, in which a foreign collaborator not only constructs but has a stake in the future of the project as well.
Consequently, he says that to improve business climate, it should be noted that how we deal with this crisis will reflect our commitment, resolve and priorities. As such, maintenance of law and order, equitable dispensation of relief and rehabilitation assistance, and structured and implemented reconstruction programmes are key to restoring business confidence.
Drawbacks to building business confidence are mismanagement, inefficiency, corruption and pilferage of resources. Wickramasuriya says strong punitive steps need to be introduced to deal with any efforts to exploit the current situation. The BOI chief is confident that the government-appointed task force on preserving law and order would stymie these issues and retain the confidence of donors, investors and business partners alike.
Meanwhile, aid agencies have warned that worst-hit communities would take a generation to be rebuilt. Sri Lanka was one of the more severely affected countries. Nevertheless, Wickramasuriya feels that Sri Lanka, which has proved to be resilient in the past, could bounce back within five years – with a condition, of course: “We need to have a clear set of policies and strong implementation.”
On a sombre note, he adds: “The huge human cost – of loved ones lost – can obviously never be replaced, just remembered.”
Yet, for all of those who survived the tsunami, Sri Lanka has to be rebuilt. And pragmatically, too. The business sector has an especially significant role. The composition of a large number of business leaders in the three task forces reflects the government’s commitment to involve the private sector in this process.
What of the BOI? What role can this key investment body play in rebuilding Sri Lanka? “Continue its reform process to deliver a world-class service to all investors – local and foreign, big and small,” asserts Wickramasuriya.
On the social responsibility of investors, he says: “The world has clearly demonstrated its social responsibility in recent times. Investors have responded with one voice to this catastrophe. We would like them to continue to support communities in which they work, by contributing to education, welfare and the transfer of knowledge throughout their project lifetimes. Issues raised by the disaster will continue to dominate, long after relief has ended.”
And he strongly cautions: “The world is watching – and we must perform…”