Addressing the American Chamber of Commerce on Friday, the US Assistant Secretary of State for South and Central Asia, Robert O'Blake described that foreign investors found Sri Lanka's marketplace an "uphill battle" although it was 3 years after the end of the armed conflict.
Highlighting "opaque" rules, "unpredictable government regulations" and "corruption" as key causes of poor foreign investment, Blake urged Sri Lanka to open up the market, particularly through the liberalisation of rules for foreign direct investment.
See here for Blake's address in full. Extracts published below:
"USAID has established Public-Private Alliances with Sri Lankan companies to expand operations into the North and East to create new opportunities and better livelihoods. These partnerships are helping to re-activate the local economies of the North and East and laying the groundwork for sustainable economic growth that provides opportunities for all Sri Lankans. We believe that creating economic opportunity must go hand in hand with political reconciliation."
"But, in the three years since the end of the conflict, to be frank, we have not seen very many new U.S. companies come to invest in Sri Lanka. It’s not for lack of trying, but our investors, and investors from many other countries as well, face an uphill battle in Sri Lanka’s marketplace. The barriers include confusing and opaque rules on bidding for contracts, unpredictable government regulations such as the recent so-called Under-utilised Assets bill, and corruption."
"The government has made progress in developing ports, aviation, and other infrastructure. But these are not enough to realise the true potential of the Sri Lankan economy. The time is right to think about how to help launch in Sri Lanka the type of large-scale economic growth that India experienced through market openings in the early 1990s. You have the human resources, and you are building the infrastructure. With more aggressive reduction of tariff and non-tariff barriers, and liberalisation of the rules for foreign direct investment, I am confident that the economy, and our bilateral trade and investment, can grow even more quickly."
