CB Governor baffled by private sector's wait-and-see stance


Dr. Indrajith Coomaraswamy

by Sanath Nanayakkare

It is a little bit baffling that while foreign investors have clearly begun to place confidence in the methodical transformation of the Sri Lankan economy, the nation's investors are still waiting on the sidelines, Central Bank Governor Dr. Indrajith Coomaraswamy said recently.

Dr. Coomaraswamy said so while addressing the Economic Summit 2017 hosted by the Ceylon Chamber of Commerce, at the Cinnamon Grand, Colombo.

"I see that Foreign investors are investing in the Stock Market. Further, our recent sovereign bond was seven-times oversubscribed. I must say, I'm a little bit baffled to see Sri Lankan investors are still weighing up things", the Governor said.

"I urge the private sector leaders here to ask yourselves these questions. Is the country moving in the right direction in terms of its economic policy making, trade policy framework and foreign investment promotion programme? Do we have the right frameworks for public debt management, sensible public expenditure targets, revenue enhancement, safeguards for Sri Lankan enterprises vis-a-vis free trade agreements, transparent tax regimes, up-front investment allowances in place of tax holidays, lowered costs in cross-border transactions, technology transfer plans, anti-dumping bill etc.? Check out these elements in the comprehensive economic strategy which is underway, and then consider whether you should invest your money here in Sri Lanka or would rather do so in Bangladesh, Trichy or Ethiopia?

"Yes, we have a noisy political system when it comes to reform. But you see the VAT finally received approval. And Hambantota Port Deal would soon be ratified in parliament after the procrastination. That's the way we Sri Lankans get things done", the Governor said eliciting laughter from the audience.

Coomaraswamy pointed out that both China and India have agreed to integrate necessary safeguards in the intended FTAs which would help protect local industries and that the World Bank would help retrain and re-skill the work force where necessary.

"There are 190 countries that vie for foreign direct investments. I don't know if there is any other country in the world that can offer local and foreign manufacturers and service providers the preferential access as Sri Lanka would; to India, China, Pakistan and the European Union which together account for three-billion consumers,the Governor said.

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