By Chathuri Dissanayake
Launching wide-ranging reforms to improve the investment climate in the country, Prime Minister Ranil Wickremesinghe yesterday said that wider powers will be needed to implement certain changes while proposed legislative and sub-legislative changes will be expedited.
The Prime Minister, speaking at the launch for the Roadmap on Investment Climate Reforms in Sri Lanka, said that identifying and implementing the legislative reforms and changes in “subordinate legislations” that is required to create an enabling business environment should be the priority task of the reforms.
“We are bringing in new legislation, like the State Land Bank, the establishment of a single window and the establishment of economic development areas. The report on the taskforce on tourism, the report on the taskforce of investment and the report on the taskforce on the digital economy are all coming in. This task will be supplemented by them,” he told the gathering.
Sri Lanka slid back from being ranked 79th in 2012 in the Ease of Doing Business rankings compiled by the World Bank to 110th in 2017, reflecting a negative trend in the investment climate in Sri Lanka. The reforms are being implemented to ensure that the country achieves a Government target of being ranked 70th in the rankings by 2020, the Prime Minister highlighted.-Pic by Ruwan Walpola
To achieve this target the Government appointed eight taskforces to implement the reforms. The taskforces will focus on the eight different areas of priority covered in the rankings, including Starting a Business, Dealing with Construction Permits, Registering Property, Getting Credit, Protecting Minority Investors, Trading Across Borders, Enforcing Contracts and Resolving Insolvency to ensure needed reforms are implanted.
Sri Lanka’s declining performance in the global ranking puts in focus the fact that other peer countries have undertaken major reforms during this period. Stressing the need to attract new investments, Wickremesinghe highlighted that Sri Lanka needed to move away from infrastructure-driven growth which was financed by borrowings.
The Prime Minister said that the country has to seize the opportunity given at present to develop the economy.
“This is our last chance,” he said.
Speaking about the competition from other countries, the Prime Minister said that the country has fallen far from where it started in the 1970s.
“There were only two or three countries in front of us in then. China was behind us, now we only have Afghanistan, Laos, Cambodia and Myanmar if we look back,” he said, emphasising the need to improve the investment climate.
Wickremesinghe also said that the Government would be announcing a list of investments next week.
“We will come up with the list of investments which we propose for private investment whether it is foreign or local, we want all investment and we want joint collaborations.”
Domestic market producers will be offered incentives and assistance packages to help transition to a competitive environment created to attract more investments.
Stressing the need to be competitive, the Prime Minister said that both domestic market enterprises and export enterprises had to go in one direction if the investment climate was to improve.
“The Ministry of Investment Strategies and Finance will come up with a package of trade adjustment assistance. Incentives are given to domestic market manufacturers for new machinery. Domestic market manufacturers are an important sector and no one wants them to fall; they need time to become competitive and to adjust,” he said.
Speaking at the launch, Development Strategies and International Trade Minister Malik Samarawickrama highlighted that the reforms are focused on “attracting, retaining and integrating foreign investments” to the country.
The Minister also said that at present the high transaction costs and dense web of business regulations in the country discourage investments and the expansion of businesses, giving incentives for informal methods.