Investment Promotion State Minister Dilum Amunugama in discussion with Obaidani Apparels Ltd., Managing Director Khalfan Al Obaidani yesterday

The attack on the investor is making the rounds at a time when a group of IMF officials are in the country for observations before their first review on the IMF’s Extended Fund Facility

Although it has been six weeks since the Omani owner/Managing Director of the export-oriented Al Obaidani apparel manufacturing plant in Katana and its security guards were assaulted by a group of unidentified thugs, no arrests have been made by the Police yet.

The authorities instead are said to be contemplating ridiculously to relocate the garment factory to another area. It is an admission on the part of the law enforcement authorities that they are not capable of preventing the recurrence of such attacks on investors in the area or they do not want to do so. 

It is the State Minister of Power and Energy, who has been accused of this attack. Samagi Jana Balawegaya (SJB) Parliamentarian Nalin Bandara Jayamaha on Tuesday carefully using words told Parliament that “the finger is pointed at the State Minister” and requested President Ranil Wickremesinghe to remove him from his post. However, the State Minister denied the allegation immediately.

Al-Obaidani Apparels (Pvt) Ltd is a member company of the Al-Obaidani group in Oman, a leading Apparel Company in Gulf Coast Countries. A group of five persons forcibly entered the Company premises in Ambalayaya, Katana on March 30 and first assaulted the Security officials of the premises and then barged into the residence of the Managing Director of the Company which is situated in the same premises before they attacked him as well. 

Six days after the incident, on April 5 the State Minister of Export Promotion Dilum Amunugama said in Parliament that perpetrators responsible for the attack will be arrested and brought before the law. 

He said that he is not satisfied with the investigations carried out by the Police in this regard and therefore he will hand over the matter to the CID to implement the law properly. The State Minister also stated that the Oman Embassy has expressed serious concern about the incident and this is serious damage to the country.

Yet, it has been six weeks since the incident took place and five weeks since Amunugama’s statement, but the assailants are still at large. 

The first reaction by the investor unarguably was to relocate the factory to another country. A week ago, it was said that all was set for the relocation but following a discussion with Public Security Minister Tiran Alles on Tuesday, the Omani investor is said to have changed his mind. He is said to have assured the Minister that he would not leave Sri Lanka and would continue his operations in Sri Lanka. 

However, he had told the Minister that he would discuss with his family whether to operate the apparel factory in Katana or to shift it to another area. That points to his fears that his business premises would again come under attack, despite the Minister’s assurances. 

The Board of Investment (BOI) of Sri Lanka under which the company has been registered told on Tuesday that an impartial investigation has been initiated over the attack. 

Again on Wednesday BOI said that necessary arrangements were being made to provide an alternative site for the company to continue its operations uninterruptedly.

Rumours had it since the attack that a politician from Gampaha District was behind the incident. As if vindicating them Police have failed to make any arrests thus far. It is a well-known fact that crimes organised or backed by politicians are normally not properly investigated, or weak legal actions would be initiated so that culprits can later get off scot-free. 

For instance, the politician who was involved in the murder of the Briton, Khuram Shaikh on Christmas Day in 2011 at a hotel in Tangalle was arrested ONE YEAR after the crime was committed and only when Prince Charles, (Present King Charles III) intervened. 

Also, the case against the murder of Parliamentarian Joseph Pararajasingham was withdrawn, without citing reasons. 

The attack on the apparel factory has taken place at a time when Sri Lanka is struggling to come out of an unprecedented foreign exchange crisis which led to the last year’s public uprising. Despite a slight respite in the foreign exchange meltdown being felt last month, no changes could be effected in the economy that was contracted in the face of the crisis.  The International Monetary Fund (IMF) would only create a breathing space for the Government to find avenues to fill the foreign exchange gap, but the country has to pay a price for it, by way of getting its indebtedness further increased. 

It is here that foreign investments become vital. The BOI states that the Al-Obaidani Apparel Company “has carried the Made in Sri Lanka brand to the world, secured much-needed dollars for the country, and employed hundreds of employees for over seven years of operations in Sri Lanka.” 

If the authorities are suggesting relocation of such a vital economic site as they are so helpless in protecting it, in the face of threats by a group of thugs, what is the safety assurance the Government is giving to the foreign investors in general?

The question has been remaining for a long time if an environment conducive to foreign investors prevails in the country. We have heard about politicians and officials demanding bribes for the approval of projects as well as ransom from investors who have already started operations. The Daily Mirror of May 10 stated in an article that Cho Sung Lea, the President of the South Korean Disaster Relief Foundation has unsuccessfully visited Sri Lanka twenty times over the past eight years to obtain approval to 19 modern factories with over 30,000 job opportunities. 

Although he had not directly stated why the officials and politicians have been dragging their feet, he had hinted at it by saying “We are unwilling to give concessions. I believe that any benefit received from Korean investments should go directly to the country and its people.”  

Australian High Commissioner Paul Stephens, in a recent interview with the Daily Mirror, had lamented. 

 “A number of Australian companies are interested in investing in Sri Lanka, which would help the economic transformation that Sri Lanka needs. But the investment environment is complex and there are a number of hurdles in the way of obtaining approvals needed for investment plans to come to fruition.”

The “2020 Investment Climate Statements: Sri Lanka” published by the US State Department vindicates this statement.  

It says “Public sector corruption is a significant challenge for U.S. firms operating in Sri Lanka and a constraint on foreign investment. While the country generally has adequate laws and regulations to combat corruption, enforcement is weak, inconsistent, and selective.  

“U.S. stakeholders and potential investors expressed particular concern about corruption in large infrastructure projects and government procurement.” One has to conclude that the attack on the Al-Obaidani factory and its owner has much to do with such corrupt practices. It seems that the authorities are inviting investments while closing the door.

Eradicating corruption is one of the conditions tied to the IMF bailout package as well. And the story of the attack on the investor is making the rounds at a time when a group of IMF officials have arrived in the country for observations before their first review which would decide the second disbursement of USD 2.9 billion Extended Fund Facility (EFF) approved by the IMF Executive Board on March 20.