AIA’s Sir Mark tells Sri Lanka: Stabilisation alone will not bring capital back

Addressing SLID forum in Colombo says next stage of growth should rely to capabilities, not conditions 

Exhorts clearly identifying conditions required to 

attract investment

Warns Sri Lanka must move from crisis management to sustained growth to attract long-term capital

Calls for deeper reforms, policy stability and credible governance to reduce investment risk

Says Sri Lanka must compete for global capital through stronger competitiveness and deeper 

capital markets

Notes globalisation is being reconfigured rather than reversed as Asia emerges as the centre of global growth

AIA Group Chairman Sir Mark Tucker - Pic by Ruwan Walpola

Sri Lanka’s hard-won macroeconomic stabilisation marks only the beginning of its recovery and will not by itself bring the long-term capital needed to drive sustained growth, AIA Group Chairman Sir Mark Tucker said yesterday, warning that the country must now move decisively from crisis management to building the capabilities required for expansion. 

“Sri Lanka has done the hard work that has led to stabilisation. But stabilisation alone will not bring capital back,” he said, stressing that “in other words, the next stage of growth will rely on capabilities, not just conditions.”

Delivering the keynote address at the Chairman and CEOs Forum titled “Reconnecting to capital and repositioning Sri Lanka in a fragmented world”, organised by the Sri Lanka Institute of Directors (SLID) at Port City Colombo, Tucker said Sri Lanka has made meaningful progress in stabilising its economy following the crisis but now faces the more complex challenge of translating that stabilisation into sustained growth.

“There is a need to clearly identify the conditions required to attract investment and transition from recovery to sustained expansion. There is also a need to commit to creating and maintaining these conditions consistently and over time.”

Tucker, who also served as former Group Chairman of HSBC Holdings and previously as Chief Executive and President of AIA Group, said Sri Lanka now has an opportunity to pivot from a period defined by crisis response towards one focused on long-term development.

“Sri Lanka has begun and needs to continue to pivot from crisis management to stabilisation, with the very real prospect of not just sustaining but accelerating its growth journey.”

He said long-term expansion would require reconnecting Sri Lanka with large pools of private capital at a time when countries are competing more intensely for global investment.

“Long-term sustainable growth will require capital at scale. At scale that far exceeds what the public sector can provide.”

For that capital to return, he said, investors must see credible reforms and a stable policy framework.

“Critical to this will be Sri Lanka continuing and deepening its reform agenda, strengthening policy and regulatory stability, modernising government, and removing long-standing frictions that increase execution risk and deter investment.”

Competitiveness, he said, must also be strengthened across a range of policy areas.

“Tax, labour and land use, and foreign investment policies and frameworks all need to be reviewed to ensure that policy supports long-term planning.”

Sri Lanka already possesses several advantages that could underpin its growth within the changing Asian economic landscape.

“Sri Lanka’s competitive advantages in strategic location, cost advantages, professional talent and natural advantage will shape how Sri Lanka competes in the reconfigured Asian trade landscape.”

However, translating these advantages into sustained growth would require coordinated leadership between Government and the private sector.

Developing and sustaining a multi-pronged development strategy requires strong engagement between policymakers and business leaders, particularly in identifying the policy constraints that limit productivity and investment.

“All of you in this room will know best what drivers are at stake, and you will know what policy support is needed and what obstacles need to be removed in order to truly unleash the productive forces that will carry Sri Lanka even more strongly into the future.”

Tucker said Sri Lanka must also strengthen its ability to mobilise capital through deeper domestic financial markets.

“Deeper, more liquid capital markets and modernised market infrastructure are needed to attract funds and channel them into productive investment.”

Institutional investors such as pension funds and insurers could play a significantly larger role in financing long-term infrastructure and development projects.

“Pension funds, insurers and other owners of precious capital can, and importantly should, play a larger role in funding long-term duration projects.”

Public-private partnerships will also be essential to mobilising capital for infrastructure, energy and sustainable development.

“To mobilise public-private partnership into sectors such as infrastructure, energy and sustainable development, an effective, credible PPP framework is essential.”

Such partnerships must be built on transparent governance and predictable processes.

“Transparent governance, balanced investment allocation and predictable and reliable processes will attract world-class private partners, able to bring further technology, scale and execution to Sri Lanka.”

Tucker noted that global capital markets are increasingly shaped by sustainability standards and climate-related investment frameworks.

New financing structures including regulated infrastructure vehicles, green financing instruments and blended financing models are becoming increasingly important in structuring bankable large-scale projects.

As one of the region’s leading asset managers, AIA has developed a climate transition plan and committed to validating climate targets, reflecting evolving expectations among global investors.

He also highlighted the potential role of Sri Lanka’s global diaspora.

“It is a source not only of capital, but of expertise and resourcefulness, key to developing the entrepreneurial ethos and supporting the ecosystem.”

Structured mechanisms connecting diaspora investors to priority sectors such as services, energy and innovation could accelerate investment flows.

However, Tucker emphasised that capital ultimately depends on trust.

“But capital only flows where there is trust.”

“And trust is built or eroded by strong or weak governance. Even the strongest investment case can fail when good governance is lacking, creating uncertainty, inconsistency or unmanaged risks.”

Strong governance standards, transparent disclosures and predictable policy frameworks are therefore essential to rebuilding investor confidence.

“Risk oversight, particularly in the financial sector, will continue to be necessary in order to rise international standards, to improve rigorous testing and to build new systems.”

Corporate boards must also strengthen governance in areas such as risk management, financial controls, organisational culture and cyber resilience to ensure institutions remain robust through economic cycles.

Predictability at the national level, he said, is equally critical.

“Investors, both domestic and international, plan over decades, not months. We need consistent rules, clarity of process and quality of execution.”

Tucker acknowledged that investors in Sri Lanka have sometimes faced policy uncertainty, regulatory shifts and project reversals.

“We must face the reality experienced by investors in Sri Lanka today. We need to improve certainty and stability in the policy and regulatory environment, evidenced by shifts in rules, project reversals and inconsistent transparency, all of which amplifies execution risks and slows investment in the country.”

He said Sri Lanka should therefore focus on creating a stable regulatory environment with durable and consistently applied rules, streamlining approval processes and aligning governance frameworks with international standards.

Beyond policy and governance reforms, Tucker said the next stage of growth will depend increasingly on the country’s capabilities.

Investment in skills, talent development and service quality will play a central role in strengthening competitiveness.

“Sri Lanka is a country rich in talented people, with a warm and collaborative culture, and we see this clearly with our own team in Sri Lanka.”

Continued investment in people, digital infrastructure and modern physical infrastructure will be necessary for Sri Lanka to integrate effectively with regional and global economic networks.

Sri Lanka’s strategic location along the main East–West shipping route positions it to become a regional hub for trade, logistics and services as global economic activity shifts towards the Indian Ocean region.

The centre of gravity in global growth is increasingly moving towards the Indian Ocean basin, South Asia, the Middle East and ASEAN economies.

Sri Lanka therefore has an opportunity to position itself as a regional node within this evolving economic architecture by strengthening connectivity and accelerating trade agreements that anchor investment and market access.

These developments are unfolding within a global environment characterised by rising geopolitical tensions and technological transformation.

National security considerations are increasingly shaping economic policy and cross-border commerce, creating a more complex and uncertain operating environment for businesses.

Yet despite these pressures, global trade has remained resilient.

World trade expanded by around 7% in 2025 and exceeded $ 35 trillion for the first time, supported by expanding services trade and new trade corridors.

Inter-Asia trade has also reached record levels.

“Globalisation continues to undergo a significant reconfiguration, not a retreat,” Tucker said.

Countries that adapt early to these shifts, particularly by strengthening digital capabilities and aligning policies with emerging global standards, are likely to capture the greatest benefits.

Tucker also reflected on AIA’s long-standing presence in Sri Lanka and the company’s early investment in the country.

He recalled that AIA made a significant long-term commitment in 2012 by acquiring the company now known as AIA Insurance Lanka, reflecting the group’s belief in Sri Lanka’s growth potential and the opportunities within its largely underpenetrated insurance market.

Since then, AIA has expanded its distribution network, strengthened resilience across economic cycles and grown into one of Sri Lanka’s leading life insurers.

AIA’s presence in Sri Lanka now spans nearly four decades, dating back to the early years of the country’s modern insurance industry.

Founded in Shanghai in 1919, AIA today operates as the world’s leading pan-Asian life insurance group.

Given AIA’s position as an Asian company with a global mindset and a global investor base, Tucker said the group brings a unique perspective on geopolitical and economic developments across the region.

“AIA stands ready to play its part as an investor, as an employer, as a long-term partner, as Sri Lanka takes this next step forward.”