Financial Times

Enticing foreign investors to Sri Lanka when we are not the most attractive location – in terms of political stability and uncertainty – is a tough call for agencies like the Board of Investment (BOI). But that’s probably their job and that’s why we need probably the best team at this agency.

However our investment promotion authorities can learn from two practical statements last week on foreign investments and the way forward.

A Malaysian delegation representing Malaysian-Chinese companies and their connected chambers was in town last week and in an interview with this newspaper made an interesting statement which our agencies should grab and follow-up. In fact such investors could be perceived as ready-made ambassadors for Sri Lanka given the positive way they view Sri Lanka.

Asked whether Sri Lanka’s conflict and uncertainly was a deterrent to foreign investors, Soong Siew Hoong, Secretary-General of the Associated Chinese Chambers of Commerce & Industry of Malaysia (ACCCIM), said: “We go where no one dares. Taking risks is entrepreneurship. We are looking for opportunities. We are not too worried about the Tigers (LTTE).”

There are many lessons to learn from this statement – the first one being that there are foreign investors in the world who are willing to take risks, go to trouble-spots and who are entrepreneurial in spirit. If the BOI is smart and savvy – and here I have some doubts – it would strike a more close relationship with investors and chambers of this kind of entrepreneurship and provide all the support they need.

Second lesson: provide better guidance. One of the Malaysian visitors is a professional engineer who has been visiting Sri Lanka for more than five years and still trying to make his first investment in energy saving systems.

His grouse: “Every time I am close to finding a partner, the government changes.” What a sad state of affairs and I don’t know how the change of a government deters investments but it seems this investor has had problems connected to political changes and I’m sure the BOI has not been working on this aspect of the problem – because the team at the BOI also changes with the times.

It appears that the issue here is the CEB and political changes probably bring in new policy. Third lesson: this investor is mooting an energy saving scheme that ensures a 30% saving in electricity use. Now translate that into a 30% saving in companies, public sector institutions and households and that’s enormous in terms of foreign exchange savings to the country. Shouldn’t we take this more seriously than just an investor trying to set up shop here? The investor, Michael Shak is director at Bluecros, one of Malaysia’s largest manufacturers of energy saving systems that has also invested in many countries where others dare to go like Iran, Cambodia, Nepal, Bangladesh or parts of Africa. More lessons there.

Overall, the delegation’s policy of dare-to-go-where-others-fear-to-tread could be a good rallying call and new campaign plug for the BOI in its endeavour to get sizable investment deals this year.

This is also in line with what Ajith Nivard Cabraal, new governor of the Central Bank is saying.

He believes that Sri Lanka is at a discount – meaning that any investor would have enormous benefits putting his or her money in any investment project; be it stocks, infrastructure or any other sector. “Look, prices (investment costs) are cheap.

You get all the benefits you can (unlike in any other location) like tax holidays, etc. The cost of investment thus is cheap. Imagine your gains if our problems get solved?” he said, adding that in an environment where there are less problems, tax holidays and other perks would be a thing of the past. “I think these problems will end; it has to end. And investing now brings a lot of gains to the investor,” he said.

The Malaysian investors deserve to be praised for their policy of coming, and coming again to Sri Lanka “where others fear to tread” and taking Cabraal’s point further, would ultimately be the beneficiary in investing in a troubled environment.

Courtesy a la SriLankan Airlines

Interesting! When a SriLankan Airlines London-Colombo flight made an emergency stop at Frankfurt on June 24, the passengers said they were poorly treated on the ground and kept in the ‘holding area’ without refreshments or toilet facilities for a couple of hours.

The airline while agreeing that there was some inconvenience due to immigration issues which was beyond their control, said airline staff had made arrangements for meal vouchers and other concerns were taken care of, a claim disputed by passengers we spoke to. Now a report from a senior airline staffer – who was on the flight - confirms that the passengers could have been treated better on the ground.

Lessons – our column is full of that today – for SriLankan too for it should have acknowledged the weaknesses and rectified it instead of taking defensive positions. An apology (if not done already) would have gone a long way towards improving relations with the public – particularly given the competition that it has on many sectors now including London/Colombo where Etihad Airlines is offering a much lower rate than SriLankan! Instead angry passengers are threatening to boycott SriLankan.

By the way SriLankan Airlines CEO Peter Hill flew Etihad (flight no.201) to Colombo from Abu Dhabi last Monday although there was a SriLankan flight at the same time. Wonder why – no seats (on SriLankan), comfort, cost or safety?