Ethnic harmony, peace pre-requisite for foreign investments in post-conflict nations
Taking a cue from the international experience to attract foreign investments (FDI), ethnic harmony, peace and tranquility in a country play an important role as shown by countries like Mozambique which have emerged out of conflict and which have very efective investment promotion programmes and manage FDIs successfully.
In an analytical exposure, this was revealed by Dr Saman Kelegama, Executive Director, Institute of Policy Studies Sri Lanka making the keynote address at the “Invest in East – International Investment Promotion Forum in the Eastern Province (EP) held last week in Colombo.
This was the first international forum organized by a provincial council and was presented by the Ministry of Agriculture, Animal Production and Development, Rural Industries Development and Fisheries, Eastern Provincial Council (EPC).
He said that these countries were able to attract large multinational companies and serve as a signal for others in the world to invest in those countries. Through such FDIs these countries have managed to create employment opportunities and improve the livelihood of the people.
In the infrastructure development initiatives, Dr Kelegama pointed out that a number of international agencies like UNDP, UNIDO, USAID, World Bank etc played a key role in providing the required finances to creating an enabling environment for private sector investment to come into the region.
He said that though there is provision under Provincial Council Act for PCs to engage in investment promotion and initiate development plans and investment these could only be done with the concurrence of the Central Government. This implies the government’s involvement in the autonomy and independence of PCs.
He said that there are a number of niche opportunities for PCs to promote investment in their provinces which could well be outside the process of the Central Government. It would also be essential to have a comprehensive website, because these foreign investors before venturing into investment in a foreign country, they would go through all the details of whether investor friendly atmosphere is available in the country. They would thus go through Google, Facebook and You Tube to access such information.
The GDP growth rate in the EP even during the war was 4.3 per cent, and now he said it has shot up to 6.8 per cent. Rice production was 25 per cent, fish production was 20 per cent and milk production was 15 per cent in relation to the country’s economy, he said. He pointed out that during the war such productions had halved, due to security involvements.
After the EP was liberated in 2007 there was an upsurge in the infrastructure development, electricity, water supply, etc prompting the private sector to come into the region.
He said that major private sector companies are engaged in business like CIC, Hayleys, Cargills, etc in agriculture, livestock, etc. There are a number of investment projects in the EP – 28 of them have commenced commercial operation, 36 awaiting implementation and seven awaiting approval. Twenty-seven of these projects are in tourism sector, 15 in agriculture and 11 in industries and the balance in fisheries, etc.
Rohantha Athukorale, Head of National Portfolio Development. Sri Lanka and Maldives, United Nations (UNOPS), speaking on “Current Trade and Investment climate in the Eastern Sri Lanka – Investment Obstacles and Mitigation Strategies” said that the country’s economy is private sector driven in that 80 per cent of the economy is private sector based.
He elaborately explained how the EP merchandising was happening with major companies and banks taking root and analyzed the sales figures of those companies to show how their sales have increased in that province because the buying power of the people in the area has increased.
He said that Sri Lanka’s economy in 1990s was Rs. 20 billion and by 2013 it spiralled to almost Rs. 65 to Rs. 67 billion. He said the service sector catapulted to almost 50 per cent. This day long forum was attended by around 200 investors and some of them were from around 25 countries.
At the venue, the Business Times (BT) met Magfur Uddin Ahamed, Maruf A Khaled and Saifor Amin from Bangladesh and they told the BT that they were impressed by the Forum as they found the details they have collected from the event are useful.
Mr. Ahamed said that they would be visiting the Eastern Province to acquaint themselves of the locality and to observe the facilities available because they are keen to invest preferably in agriculture. He said that a team of five from Bangladesh participated in this Investment Promotion Forum.