By Dayan Surendranathan
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Board of Investment (BOI) Chairman Sanjaya Mohottala[/caption]
Newly appointed Board of Investment (BOI) Chairman Sanjaya Mohottala, in his first public address since taking over the reins from Susantha Rathnayake, outlined his vision for the BOI, which centred on developing a conducive environment for investment, aiding the private sector, enabling market access, and enhancing the ease of doing business.
“There are certain key elements that need to come together. The first is developing an interesting pipeline of investments. The second is getting the right people and empowering them to do what needs to be done,” he detailed.
“Following this, we require policy continuity and transparency that enables us to get things done in a quick manner. Finally, the country’s investment capacity needs to increase, not just on an incremental level, but on a transformative level. It’s not just about removing bottlenecks – it’s about implementing the right policies.”
Mohottala, who was previously BOI’s Director General, made these remarks at a webinar titled “Investment Climate and Strategies to attract FDI in Sri Lanka” on 17 December.
“There will be policy continuity when it comes to tax regimes for the next five years, something we never had in the past. Simplifying the tax structure, VAT registration, and having a unique ID for all taxes are part of this. This, together with the Cabinet Subcommittee on Investment, which is directly under the purview of the President, signals that the country is serious about improving the ease of doing business and is ready for investment.”
In general, inflows to Sri Lanka have been volatile due to investor sensitivity to domestic economic and political developments. The Institute of Policy Studies (IPS) writes that FDI inflows increased in the aftermath of the war, peaked in 2014, and saw a dip in 2015/16. FDI inflows peaked again in 2017/18, but declined drastically to $ 1,204 million in 2019.
However, Mohottala remains optimistic for Sri Lanka’s prospects in the post-pandemic world.
“In the post-Covid world, there are many opportunities available for Sri Lanka, especially for companies that are looking to make their supply chains more flexible. Take the example of why we’re building pharmaceuticals: It’s because countries realise that India and China account for 70% of active pharmaceutical ingredient (API) production, and it’s too concentrated. In case another pandemic or similar situation occurs, we need a more diverse set of locations from which to produce from. Our geographical location, soft assets, and structural advantages make us more attractive than a lot of regional peers in this regard. So companies like HCL Tech have approached us.”
Mohottala stated that Colombo Port City is an investment opportunity worth at least $ 15-20 billion in investment, with the urbanisation of the greater Colombo area showing potential for another $ 10-15 billion in investment. It is expected that the Hambantota industrial zone, Colombo Port City, and the hotel and mixed development sector will attract significant inflows in the coming years. Most of Sri Lanka’s FDIs were received by projects in port infrastructure, property development and hotels, and the telecommunication sector, he said.
However, Mohottala noted that attracting FDI into export-oriented manufacturing and the service sector is required, for which the country’s energy infrastructure will need to be developed to power these sectors.
“This is where investment in power and energy will come into play, because our current levels of infrastructure are just not there yet. There are plans for another $ 2-3 billion worth of investment in this sector, with plans to add 1.5-2 gigawatts of electricity to the grid in the next five to 10 years, with 70% of power coming from renewable sources,” he explained.
Board of Investment (BOI) Chairman Sanjaya Mohottala[/caption]
Newly appointed Board of Investment (BOI) Chairman Sanjaya Mohottala, in his first public address since taking over the reins from Susantha Rathnayake, outlined his vision for the BOI, which centred on developing a conducive environment for investment, aiding the private sector, enabling market access, and enhancing the ease of doing business.
“There are certain key elements that need to come together. The first is developing an interesting pipeline of investments. The second is getting the right people and empowering them to do what needs to be done,” he detailed.
“Following this, we require policy continuity and transparency that enables us to get things done in a quick manner. Finally, the country’s investment capacity needs to increase, not just on an incremental level, but on a transformative level. It’s not just about removing bottlenecks – it’s about implementing the right policies.”
Mohottala, who was previously BOI’s Director General, made these remarks at a webinar titled “Investment Climate and Strategies to attract FDI in Sri Lanka” on 17 December.
“There will be policy continuity when it comes to tax regimes for the next five years, something we never had in the past. Simplifying the tax structure, VAT registration, and having a unique ID for all taxes are part of this. This, together with the Cabinet Subcommittee on Investment, which is directly under the purview of the President, signals that the country is serious about improving the ease of doing business and is ready for investment.”
In general, inflows to Sri Lanka have been volatile due to investor sensitivity to domestic economic and political developments. The Institute of Policy Studies (IPS) writes that FDI inflows increased in the aftermath of the war, peaked in 2014, and saw a dip in 2015/16. FDI inflows peaked again in 2017/18, but declined drastically to $ 1,204 million in 2019.
However, Mohottala remains optimistic for Sri Lanka’s prospects in the post-pandemic world.
“In the post-Covid world, there are many opportunities available for Sri Lanka, especially for companies that are looking to make their supply chains more flexible. Take the example of why we’re building pharmaceuticals: It’s because countries realise that India and China account for 70% of active pharmaceutical ingredient (API) production, and it’s too concentrated. In case another pandemic or similar situation occurs, we need a more diverse set of locations from which to produce from. Our geographical location, soft assets, and structural advantages make us more attractive than a lot of regional peers in this regard. So companies like HCL Tech have approached us.”
Mohottala stated that Colombo Port City is an investment opportunity worth at least $ 15-20 billion in investment, with the urbanisation of the greater Colombo area showing potential for another $ 10-15 billion in investment. It is expected that the Hambantota industrial zone, Colombo Port City, and the hotel and mixed development sector will attract significant inflows in the coming years. Most of Sri Lanka’s FDIs were received by projects in port infrastructure, property development and hotels, and the telecommunication sector, he said.
However, Mohottala noted that attracting FDI into export-oriented manufacturing and the service sector is required, for which the country’s energy infrastructure will need to be developed to power these sectors.
“This is where investment in power and energy will come into play, because our current levels of infrastructure are just not there yet. There are plans for another $ 2-3 billion worth of investment in this sector, with plans to add 1.5-2 gigawatts of electricity to the grid in the next five to 10 years, with 70% of power coming from renewable sources,” he explained.