The whole future of Sri Lanka and the business environment of this country, will depend on how the Board of Investment will function, Minister of Enterprise Development and Investment Promotion Dr. Sarath Amunugama said.
`We have no option, but to go for a rapid expansion of foreign direct investment. All our future prosperity, job creation and economic growth will depend ?I say it very seriously, on how successful the BOI is, in drawing foreign investment,` Minister Amunugama said.
The Minister made these remarks addressing the BOI staff during a function held to welcome new minister in charge of the BOI.
`As a former Minister of Finance, I am aware of two things. The first is that our domestic income is sufficient only to pay salaries of government servants, pensioners, to repay our debts and to look after a few maintenance requirements. We are financing our budgetary gap with foreign assistance. At the last donor meeting, it so happened that we were able to get Rs.4.5 million worth of commitment over a 3-4 year period. But it is very obvious that, that type of donor funding needs to be reviewed, because our annual debt repayments are mounting. The grant component in this funding is very little compared to the mid-term and long-term credit element. So we can`t go on borrowing much longer, as the economy cannot be sustained on the basis of such bi-lateral and multilateral borrowings. That leaves us only two options. One option is to drastically reduce consumption, reduce salaries, reduce development programmes and cutting down to the bare necessities which countries like North Korea, Albania, Cuba, the hard-line Communist countries, and so on, are presently doing. I don`t think anyone in Sri Lanka will envisage a future where we can sustain our economy based entirely on domestic savings. So we have no option, but to go for a rapid expansion of foreign direct investment,` the minister said.
`When BOI was started, the foreign direct investment scenario was limited. There wasn`t much money in Asia and it was largely the push and pull of the garment and textile center that drew investments into Sri Lanka, and the BOI and the Industries Ministry was largely driven by the textile industry. But today, the picture is totally different. Asia is full of money. China does not know what to do with its money. India has a lot of excess capital. The Middle East is awash in money. Japan is in surplus. Countries like Thailand, Singapore, and Malaysia are now becoming countries, which invest abroad. Eastern European countries are financing in a big way. Hungary for example, is now a major donor to Sri Lanka. Austria is a major bi-lateral contributor. So there is no question of want of money. I think, you know it better than I do, that it is so, if you look at the number of projects that are being submitted to BOI. Not of the bottom end, but at the top end.`
What is not permissible is to hang on to files and create a feeling in the country that BOI is an inefficient and corrupt organization. I want to leave this organization after removing those two stains from the BOI! It cannot be corrupt, cannot be inefficient because this is an issue much bigger than us. Because the whole future of Sri Lanka and the business environment in this country, will depend on how BOI functions.
Don`t forget that Sri Lanka is not the only girl on the beach! There are so many countries which are fighting for investment. Chinese development is not based on internal savings. Chinese development, which is a miracle, is due largely to foreign investment. The country that is drawing the most capital investment in the world even more than America, is China. India is developing today not on domestic savings. The idea that you can unplug yourself from the world economy is a big joke. Actually, we have to plug ourselves on to the global economy. Look at the development pattern in Sri Lanka today. The Western province i.e. Colombo, Kalutara and Gampaha districts are accounting for 54% of Sri Lankan GDP. The hospitals are here, the schools are here, the factories are here, the hotels are here, in the Western Province and it is plugged on to the global economy, and as a result the lowest unemployment figures, in Sri Lanka are in the Western Province. Today you go to any of these big factories, you go to any BOI sites, they are saying `find us more employees`. Today they are bringing Chinese workers to Havelock City. I said, then show it in Shanghai, at our Investment Forum. Which other country can say they are bringing workers like that! Our workers are going to Korea, to Singapore to the Middle East, . So isn`t that a sign of a vibrant development system.? We have nothing to complain.
Today, it is no exaggeration to say, that the future prosperity of Sri Lanka will depend on how we at BOI function. All our future prosperity, job creation and economic growth will depend ?I say it very seriously, on how successful the BOI is, in drawing foreign investment` The minister added.