CB pledges to consolidate macroeconomic policies to attract investment

Freshly-appointed Central Bank Governor Dr. Indrajit Coomaraswamy yesterday insisted that his institution would do its utmost to improve macroeconomic fundaments in Sri Lanka, thereby promoting the investment climate for foreign companies.

Addressing the Japanese delegation at the Consultation on National Development Cooperation and Economic Policy Dialogue between Sri Lanka and Japan, Dr. Coomaraswamy recalled that Sri Lanka missed out on the chance to secure Japanese investment in the 1980s when Japanese companies expanded extensively to East Asian countries. 

He insisted that it was time for Sri Lanka to “make up for lost time” and work to ensure foreign investment flows into the country. 

The conference follows up on the joint declaration made by the Japanese and Sri Lankan Governments following the meeting between Prime Minister Abe and Wickremesinghe in October last year. A range of Sri Lankan officials made presentations to the Japanese delegation on the proposed urban transport system for Colombo, port extension plans in Colombo and Trincomalee, Central Expressway, elevated highways and BIA terminal operations and second runway construction as key Government projects needing investment.

“The Central Bank will support to the utmost a number of measures that are already underway to improve the investment climate, to improve investment promotion as well as trade policy and trade facilitation. By this time next year it is extremely likely that businesses operating in Sri Lanka would have preferential access to a market of three billion people.”  

The current bilateral Free Trade Agreement (FTA) with India would be widened to include services, investment, training and technology, the Governor said. A similar partnership agreement is being negotiated with China while the Pakistan trade deal is also being expanded to contain services. A comprehensive trade agreement is also being negotiated with Singapore along with the reinstatement of GSP+ status the Government is also in negotiations for a five-year-plan to increase trade with the US.

”With Sri Lanka’s strategic location in the middle of the Indian Ocean, there is a strong business case for Sri Lanka and an important platform to grow investment. There has been a slight shift in the way the Government has been approaching the infrastructure development programme. There are a series of area development programmes around the country and the idea is to develop a Master Plan, but while individual countries will help Sri Lanka develop the plan the investment that comes out of them will be open to everybody. So there is a realignment that is taking place,” he said. 

Several of the older Master Plans need to be changed to fit into the new Master Plans being currently formulated by organisations include a Master Plan for Kandy by the Japan International Cooperation Agency (JICA), Dr. Coomaraswamy noted.  Hambantota, Colombo and Trincomalee are the other cities the Government is preparing Master Plans for along with 50,000 acres for investment zones around the country.

“I hope our friends from Japan and other countries will bear with us as we realign these projects. Clearly there is a great deal that can be done with Japanese capital and expertise playing a significant role in assisting Sri Lanka to achieve its development objectives.” (UJ)