A new investment strategy is being worked out by the Ministries of Finance and Economic Development with a view to increasing Foreign Direct Investment (FDI) for large scale projects including industrial ventures.Accordingly the mandate of Sri Lanka's Board of Investments (BOI) will be redefined and legislation enacted to replace the BOI with a new investment promotion authority, official sources said. Foreign investment approvals for small and medium scale projects and industries would be liberalized and there would be no need for them to seek BOI approval under the new authority, they said.
However, the planned changes have been delayed by a dispute between some top government officials as to whether the BOI should be replaced or strengthened under the same structure, they added. “With this uncertainty, the fate of the BOI would only be known when President Mahinda Rajapaksa presents the budget,” one senior official said.
He said Sri Lanka could easily reach the target of $2 billion in FDIs, even with two projects, which had been submitted, adding that the BOI cannot be run on Chinese restaurants and Indian restaurants “We need to properly classify projects,” he said.
In the meantime, the BOI – reacting to several Sunday Times stories on the future of the institution -, said in a statement that it would prioritise approvals of investment into specific sectors as part of its thrust to revive the country’s economy.
It said, foreign investments in tourism, agriculture, fisheries, education, Information Technology, outsourcing, infrastructure, ports and aviation would take precedence over others. Projects in those sectors would be given priority over those in telecommunications, property development, garments, and manufacturing, which were already developed, the BOI said.