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Q: As the new head of the BOI, you have said
that you intend making the investment-approval process as simple as
“getting a prescription from a doctor”. How will this paradigm shift in
policy work? How do you know that those responsible are capable of
implementing this new policy?
A: It
should be noted that the new BOI investment-approval process has been made
simpler within the existing investment-policy and regulatory
framework. The BOI, as an entity, is responsible for this. The new process
is already being implemented satisfactorily – so, the question of
capability is well addressed by the fact that within a short space of two
months, approval has been granted for over 200 projects.
Q: You also said recently that “not all FDIs are
worthwhile for investment…”. Can you elaborate on this?
A: Yes,
it is critical that we attract the right type of investments – those that
are needed for the sustainable development of the country and the economy
in the long term. Therefore, it is imperative that we seriously assess
issues such as environmental sustainability, domestic value addition,
employment generation, technology transfer and net export earnings, and
give due emphasis to regional development as stipulated in the ‘Mahinda
Chinthana’. We need to attract FDI that contributes to the well-being of
our economy and strikes a balance.
Q: You are seemingly upbeat about our investment
pros-pects, despite the prevailing country situation. Many indi-cators –
including the LMD-ACNielsen Business Confid-ence Index and even the stock
market – suggest that inves-tors are viewing Sri Lanka as a high-risk
destination. How do you explain this?
A: Sri
Lanka attracted its largest quantum of investments in 2006 – US$ 600
million, compared to US$ 272 million in 2005. This indicates that it
continues to be an attractive destination for FDI, demonstrating its
capacity and capability to compete in regional and global markets despite
the country situation. Over 500 applicants have sought approval for 2007
so far and over 100 agreements have been signed to date.
Q: How do you view insider dealing – does it
occur in Sri Lanka? And if so, how serious a threat is it? How can it be
overcome?
A:
Listed companies are required to establish effective governance measures
to manage sensitive and critical information. These measures should
ideally deny access of information to persons other than those who require
it to carry out their functions. This requirement also applies to other
entities that are regularly in possession of inside information – such as
investment banks, financial advisors, legal counsel and auditors – who
need to adopt a formalised monitoring regime with reporting and follow-up
routines.
There is a general obligation for
everyone possessing inside information – not merely the issuing company –
to take prudent precautions in order to prevent its misuse or access by
unauthorised persons.
Q: What are your views on takeovers of companies
via the stock market?
A: These
should take place in a transparent manner and within the framework of
prevailing rules and regulations of the Colombo Stock Exchange.
Q: Why would a high-profile investor – like Sir
Richard Branson, for instance, who was once rumoured to be interested in
setting up here – put Sri Lanka ahead of numerous other investment
destinations?
A:
To begin with, the country possesses
several inherent advantages despite the well-known bottlenecks and
constraints. Its natural advantages – particularly, the strategic location
on major air and sea routes, and the ease of access to the vast market
potential of South Asia – are among the obvious advantages that will
continue to attract overseas investors.
Reputable multinationals, including
FORTUNE 500 companies, have set up lucrative and long-standing ventures in
the manufacturing, infrastructure and services sectors under the BOI
umbrella. Among the long list of high-profile and successful companies in
the manufacturing sector are Courtaulds, Noritake, Holderbank, FDK,
Trelleborg and YKK. The leading investors in the infrastructure and
services sectors are Dialog Telekom, NTT, Shing Kwan Group, HSBC, Royal
Dutch Shell and AES Corporation, to name a few.
In fact, foreign investors have commended
the country’s educated and skilled-labour force, the pro-business
regulatory system and attractive incentives offered by the BOI. The
security of foreign investment – which is guaranteed by the constitution –
is, most definitely, to Sri Lanka’s advantage. Then, of course, for an
explorer like Branson, the lure of Sri Lanka’s culture, people,
spirituality and natural wonders will definitely be compelling!
Q: Why do you say that the blame for the rise in
the cost of living must be shared by the BOI, the Foreign Ministry and the
Foreign Employment Bureau – and not the Central Bank of Sri Lanka (CBSL)
or its Governor?
A: The
CBSL is responsible for implementing effective and appropriate monetary
policies which have an impact on inflation. At the same time, the BOI is
bound to drive economic growth by not only attracting FDI, but also
concertedly pursuing strategies that aim to increase value addition within
the country, create employment, increase exports and acquire technology or
know-how.
Increasing oil prices certainly have an
impact on the persistent rise in the cost of living, but the bottom line
is that there is no point in saying that it is not possible to control it.
Instead, we must all equally shoulder the responsibility to
mitigate the impact of the rising cost of living.
The
interviewee is the Chairman/Director General of the
Board Of Investment (BOI) of Sri Lanka.
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