By Dilina Kulathunga
Foreign Direct Investments (FDIs) into the country during the first eight months of the year has surpassed the billion dollar mark, according to the country’s Investment Promotion Minister.
According to Minister Lakshman Yapa Abeywardena, as of September 15, 2014, total FDIs stood at US $ 1.064 billion— bulk of it being flowed into the tourism sector.
This is 22 percent jump from US $ 870 million recorded during the same period last year.
“As I speak, the Board of Investment (BoI) has received in excess of a billion dollars in terms of FDIs. By September 15, we were able to surpass US $ 1,064 million and therefore I believe we could end the year achieving our target,” minister Abeywardena said.
However, the full year FDI target is set at a daunting US $ 2 billion for 2014.
Despite the end of the conflict 5-years ago, Sri Lanka has continuously failed to attract the much required investment flows and the actual FDIs were falling well short of the targets set over the years.
In 2013, Sri Lanka’s US $ 2.5 billion FDI target was revised down multiple times to US $ 1.5 billion yet managed to achieve only US $ 1.39 billion despite the much hyped Commonwealth Business Forum held last November.
It was only this week the multi-lateral lender, the International Monetary Fund urged the Sri Lanka to move away from a debt-driven model to a more sustainable FDI-driven development model.
Despite assurances, uncertainty surrounds government’s economic policies. Anti- business measures such the Expropriation Act passed in the Parliament in 2011 and poor governance structures, keeps foreign investors at bay.
Current FDI flows account only 2 percent of GDP. However, the country needs an investment flow of at least 5 percent of GDP to maintain an economic growth in excess of 8 percent in the medium term.
.jpg)
