Ambassador of Japan to Sri Lanka, members of the Japanese diplomatic mission, Mr. Sumitaka Fujita, Chairman of Japan- Sri Lanka Business Co-operation Committee, members of the Japanese business community, distinguished Guests, Ladies and Gentlemen,

It is with great pleasure today that I speak before the Sri Lanka-Japan Business Co-operation Committee on the Government of Sri Lanka’s strategy to Promote Investment.

Before I cover this important subject I think that it is crucial for me to provide some insights into Sri Lanka’s relations with Japan and on how they will progress in the future.

Japan is, as this audience will know, one of the countries which have invested in Sri Lanka from very early on and which continues to play a leading role as an investor in our country. Indeed it was in the 1970s that Noritake established a factory in Sri Lanka

I think I should begin by stating that Investment is indeed a very important component to the Sri Lankan economy. Furthermore it has in fact considerably transformed our country’s economic landscape casting aside in 30 years a reliance on plantation based exports and bringing about the emergence of a highly diversified economy where the mainstay are light industries and services.

This ability to effect economic change is the cornerstone to Sri Lanka’s aggressive promotion of investment. For many years these efforts did not bear fruit, but last year, Sri Lanka succeeded in attracting US$ 889 million, which is the highest the country has ever achieved. Hence we expect, notwithstanding the effects of the global economic meltdown, for FDI to increase over the next few years.

Of course, once that is achieved there will be many advantages for the country. Our export earning will increase when the quantum of FDI rises. Already FDI based industries represent export earning of US$ 6.5 million or 65% of the total export earnings. This is another strong argument in favour of attracting more FDI.

I might also add that the Government is seriously committed to increasing the number of employment opportunities in the country and with Investment based industries accounting for nearly half a million jobs in the country, attracting FDI is a strategic tool which we are using in that connection.

For a relatively small economy such as ours, FDI can play an important role in boosting our economy by injecting much needed foreign exchange, by creating new employment opportunities and by creating conditions for technology transfers. Those are the positive results of foreign Direct Investment and the reasons why Sri Lanka has adopted a strategy to actively promote FDI into the country.

Our strategy also accords considerable importance to FDI as a tool for economic and social transformation as investment can help redress many inequalities and perceived injustices. The Board of Investment is operating a scheme known as the 300 Enterprises Programme to establish projects outside the Western Province which has traditional received the lion’s share of FDI. The incentives offered are for longer periods and they aim at bringing jobs to rural people rather than expect them to move to areas where opportunities already exist.

In our strategy, Foreign Direct Investment also has an important role in the reconstruction of our country and will play its part in addressing the effects of a two and a half decades long conflict that had a debilitating effect on the economy and very social fabric of Sri Lanka.

In that connection the BOI has developed a comprehensive scheme of incentives aimed at promoting and facilitating investment in areas where the Northern and Eastern Provinces has comparative advantages such as in agriculture, fisheries and tourism. The incentives will help in re-integrating the affected provinces into the mainstream economy.

This is the thinking behind the Government of Sri Lanka’s strategy for investment and it is important that the Japanese investors understand the motives that govern our policies. Of course Japanese investors are welcome and encouraged to start projects anywhere in the country but more so in the North and the East where investment is most needed.

If I were to sum up Sri Lanka’s relations with Japan, the best description I could think of is "a deep friendship and a permanent dialogue".

It would be correct to say that the entrepereneurs I meet most regularly are those from Japan and this is conducted under the aegis of the bi-monthly Joint-Forum which I hold with His Excellency the Japanese Ambassador and the heads of Japanese enterprises in Sri Lanka. The Forum is a venue where we discuss all aspects of concern to both our countries and what is very gratifying is that many matters of concern have been addressed and, or will be addressed in the future.

But rather than speak of the present I think it is a much more useful exercise to use this Committee meeting to map out the future progression of Japan –Sri Lanka relations as ultimately the true test of the friendship between our nations will be measured by our success in expanding the volume of our bilateral trade and investment levels.

We are fortunate in that regard since many of the Japanese companies in Sri Lanka are known internationally for high quality products or exceptionally skilled services. Hence business leaders such as the Japanese enterprises in Sri Lanka have the possibility not just of boosting their investment in Sri Lanka, but also of acting as ambassadors on our behalf by working hand in hand with our Government.

Thus when household names such as Mitsubishi Corporation, Noritake, Shin Nippon, Toyota, Okaya, to name but a few, speak in favour of Sri Lanka, this message will carry considerable weight within the investor community.

Hence Sri Lanka is keen to see more Japanese companies on her soil, and we need to move beyond the current 60 enterprises, which have been operating to date. A greater quantum of investment than the estimated US$ 330 million total Japanese investment must also be our goal. And new Japanese investments must boost employment from the 12,000 jobs currently provided by Japanese enterprises.

I also think Japanese enterprises should study Sri Lanka’s potential and look at new sectors in addition to those where they are already represented. Japanese enterprises have already invested in very diversified sectors ranging from power, electronics, assembly of vehicles, porcelain manufacture, tourist hotels, cement manufacture, plastics, dental hospitals and many other areas. But these are by no means the sole areas where they may invest in Sri Lanka.

Further, most Japanese enterprises represented today are familiar with the BOI’s regime of incentives, the facilities the Board provides at the Export Processing Zones and the free trade agreements that give Sri Lanka-made products duty free access to the Indian, Pakistani and European Union markets.

As in every forum held, a central message needs to come out. The one that comes to my mind, which I believe, is central and sums up our vision for the future is "Sri Lanka is back in business".

This is the message that my government is sending overseas as well as to visiting delegations that come to the country. I would be grateful if you could convey it in Japan with the same strength and conviction that I express today.

It is important that you send the message that Sri Lanka is moving ahead and that our island nation is no longer mired in a problem that has consumed her for 26 years.

We see the end of our problem as an opportunity to rebuild our country.