Strong KPMG ratings & Boc’s huge bond success signify growing Int’l confidence on SL,’ says Minister Rishad in Dubai
The highest oversubscription ever seen for a Sri Lankan international bond in April andKPMG’s latest positive Change Readiness Index ranking for Sri Lanka show the growing international investor confidence on the country. And Sri Lanka prefers patient investments to hot money. “Sri Lanka is has entered a new era of development thanks to the visionary leadership of His Excellency the PresidentMahinda Rajapaksa.
The Sri Lankan banking giant Bank of Ceylon’s $500 million international bond was immediately oversubscribed to $ 3.86 billion last week whichis a 7.7 times oversubscription of the first international bond issued by a bank in the country which is a huge success. And I am pleased to inform you that we are also now better prepared and adaptable, in that, only on 26 April that Sri Lanka has been positively highlighted by the Global KPMG-ODI Change Readiness Index that shows, which countries are better prepared to face globalchange. Among 60 developing and emerging economies Sri Lanka achieved rank 22which is even above the rankings of some BRIC countries thereby ensuring the capability of our government and the country as a whole to face international economic challenges” said Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka.
Minister Bathiudeen was briefing the influential “Cross Regional Trade & Investment Roundup” Executive Roundtable on 01 May which was keenly awaiting for Sri Lanka’s investment message at Dubai Annual Investment Meeting at the Maktoum Hall, Dubai International Convention & Exhibition Center. Among the roundtable members were HE Mr. Gerald Tremblay (Mayor, City of Montreal, Canada), Mr. TemirSariev (Minister of Economy and Antimonopoly Policy, Kyrgyzstan), Mr.Olesegun Aganga (Minister of Trade & Investment, Nigeria), Mr. Pariq Puri(Chief Executive, Trade Development Authority, Pakistan), Mr. Sami Al Qamzi(Director General, Dubai Department of Economic Development) and Mr. PonnalaLakshmaih (Minister of IT & C, Government of Andhra Pradesh, India).
AI Mhas now reportedly become the sought after international level foreign trade and FDI staple event for emerging economies and frontier markets, due to its special focus on FDI and international trading for emerging economies in are cession climate, and has drawn wider attention and more than 3,000 expert and investors, including 45 foreign trade and Ministerial delegations were present at 1 May’s event in Dubai, showing the growing importance of the event to which only 8 Ministerial delegations attended in 2011. Organized by the Ministry of Foreign Trade of Dubai, AIM is reportedly the first event of its kind in the Middle East ‘to bring on one platform investment opportunities from all over the world.’
During the Executive Roundtable and thereafter, strong interest was shown by both members of the Tableand other international investment experts on FDI and investing in Sri Lanka.
Interestingly, inquiries also focused on the investment facilitation procedure and processes and the nature and the term of investments Sri Lanka is looking for. Responding to these inquiries, Minister Bathiudeen has said: “Sri Lank encourages ‘patient investments’ of 10 to 30 year term, rather than ‘hot investments’ which are short term and also, environment friendly green investments.
In 2011, FDI inflows exceeded the government’s target of $ 1billion and the global banking giant HSBC reported that high numbers of potential investors from China, India and Singapore, making inquiries on Sri Lanka. International investor confidence on Sri Lanka was also evident when Sri Lanka recorded the highest ever gross inflows of FDI in 2011. FDI including loans, increased to US $ 1,066 million in 2011 compared to US $ 516 million in2010. During 2011 US $ 110 million of loans were received by the Board of Investment approved companies compared to US dollars 39 million in 2010.Initiatives taken to streamline the approval process by establishing the’ one-stop-unit’ concept and speed up development of prime infrastructure facilities resulted in higher FDI inflows. In fact a noticeable change is seen inspector-wise composition of FDI inflows. Hotels and restaurant sector (20%), attracted most FDI inflows in 2011 followed by the Telecommunication sector (18%) which used to be the dominant sector in recent years.
The World Bank Doing Business indicators show favourable values on the factors of “Starting a Business”, “Resolving Insolvency”, “Protecting investors”, and “Trading across Borders” for Sri Lanka.
The Board of Investments (BoI) is the central facilitation point for overseas investors. Its companies account for nearly 65%of Sri Lankan exports. BoI carries a mandate encompassing the entire island.The provisions of an agreement with the BOI remain valid for the life of theenterprise and unlike in many countries successive governments cannot change these provisions which ensure the stability of your investments.
The safety of investments by international investors from the 27 countries that signed bilateral Investment Protection Agreements with Sri Lanka is guaranteed by the Constitution. I am pleased to state that Sri Lanka reports single digit inflation in 2011 for the third consecutive year recording 6.7% inflation in2011. In fact Sri Lanka believes that due to the uncertain outlook for global commodity prices a key challenge ahead for the country would be to maintain inflation at mid-single digit levels and has begun policy level adjustments tothis end.
Due to the new economic upswing since 2009 private consumption increased helped by demand for goods from North and Eastern provinces. The low-level inflation continues to promote consumption and I believe this is good news for the representatives of international trading houses who want to enter our market as well.”
Responding to what sectors are chosen, Minister Bathiudeen said: “I am pleased to inform you that in 2011 incoming private investments focused on the sectors of tourism, telecommunications, manufacturing specially apparel, IT/BPO, housing and real-estate. During the successful bilateral TIFA trade talks with the USA held in Colombo in the first week of April, Mr Michael J Delaney, the Assistant US Trade Representative of South and Central Asia announced that the US is pleased with the high quality of our apparel products and said that our Expo 2102international mega show successfully concluded in March could help bring more apparel investments to Sri Lanka.
Sri Lanka is also entering the Pharmaceutical manufacturing arena. Showing investor confidence in our pharmaceutical sector the global giant GlaxoSmithKline (GSK) started the first ever solid paracetamolproduction facility by a multinational in the country on 24 April. The facility located in the suburb of Colombo has an annual volume of 2.5 billion of any solid tablet. Also the first exclusive pharmaceutical manufacturing zone is coming up in the city of Kurunegala in the North Western Province. My Ministry has already commenced preliminary work on this zone and we invite you to invest here and be entitled to the valuable government buyback guarantees for your pharmaceutical production output, coming from this zone.”
Responding to theprogress in the tourism industry, Minister Bathiudeen said: “A South Asian tourism destination the country now targets $2.5 Bn tourism earnings by 2016.Tourism is one of the top contributors to the country’s GDP similar to exports which rose by 22.4% in 2011. Affirming confidence in our tourist industry even other important tourism destinations such as Maldives and Seychelles have already expressed their interest to promote joint tour packages with Sri Lanka.I should stress that both tourism and exports successes were achieved thanks to the valuable guidance provided to our economic progress by Basil Rajapaksa, our Minister of Economic Development.”
During the openingremarks, Sheikha Lubna bint Khalid bin Sultan Al Qasimi, UAE Minister of Foreign Trade, welcomed all participants. “The UAE had attracted $60 billion in the last five years, while its investments to foreign nations had exceeded $327billion” she said.
Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE and Rulerof Dubai was also in attendance at the opening event.
- Asian Tribune –