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BOI concerned over proposed Economic Transformation Bill
Colombo, May 19 - The Sri Lanka All Union Alliance of the Board of Investment (BOI) has issued a stark warning against the proposed Economic Transformation Bill, set to be submitted to Parliament on May 22.
The alliance cautions that the Bill will severely destabilize the investment sector, which is already grappling with economic challenges.
According to the coalition, the Bill caters to a select few individuals without consulting field experts or investors. This could prompt the departure of existing investors, further jeopardizing the sector.
The alliance calls for a transparent revision of the Bill, involving affected parties and economic experts.
While proponents claim the act will drive significant economic transformation, the alliance argues that its true aim is to secure financial gains by transferring 15 profitable investment zones under BOI control to private associates before upcoming elections.
A critical aspect of the bill is the immediate repeal of the Sri Lanka Board of Investment Act No. 4 of 1978, which would disrupt operations for both foreign and domestic companies currently under BOI governance.
The act proposes the creation of five new entities: the Sri Lanka Economic Commission, Sri Lanka Investment Zones, Office for International Trade, National Productivity Commission, and the Sri Lanka Institute of Economics and International Trade. It includes the appointment of three separate boards of directors and 25 senior positions, likely filled by political affiliates, according to the alliance.
This restructuring will split the BOI into two entities—one managing investment zones and the other handling external investment projects—potentially undermining the integrated support system that currently facilitates over 2000 projects.
The alliance highlights that the BOI has been instrumental in maintaining investment zone operations during crises, including the COVID-19 pandemic, and questions the logic behind privatizing profitable zones.
They warn that privatization will increase operational costs for investors and jeopardize employee rights, as the BOI currently liaises with the Labor Department to safeguard occupational rights.
Furthermore, the bill grants the Minister of Investment, with Finance Minister approval, the authority to approve projects rejected by other agencies, bypassing cabinet scrutiny. This could open avenues for corruption and environmentally or socially harmful projects.
The alliance argues that the primary barrier to attracting investment is the lack of a consistent policy, not the structure of the BOI. They call for strategic changes to improve the investment environment rather than resorting to privatization and restructuring.
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