How a liberal and flexible mindset could attract more dollars to Sri Lanka

I hope the Minister of Justice would look in to areas where there are substantive hindrances in making Sri Lanka a viable destination for investments. If we don’t implement these changes we will miss the bus

As Sri Lanka and Japan celebrate 70 years of diplomatic relations, a series of events have been organized to mark this bilateral friendship. The recently concluded Daya Weththasinghe memorial oration was delivered by Upul Jayasuriya, Past President of the Bar Association of Sri Lanka and former Chairman of the Board of Investments (BOI) under the theme ‘Ease of Doing Business – The Way Forward’. The event was organized by the Lanka-Japan Friendship Society and witnessed the presence of Ambassador of Japan to Sri Lanka Hideaki Mizukoshi and other distinguished invitees. 

Excerpts of the speech ;
“As a nation we have much to learn from Japan and its people. They rose from the ashes after the world war. But during the past 73 years what have we done as a country and a nation? We have had an excellent civil administration, highly commendable Judiciary, police and public service and an education system.But today, our administrative service has become a lip service with insincerity towards the people and a bunch of yes men to the politicians. Where does the buck stop? It began with 1 Rupee to 1 USD and now to Rupees 203 officially. Main sources of income for the country is by way of increase of Foreign Investment and Garment exports. In 2021 it stood at USD 4.4 Billion when compared to USD 5.6 Billion in 2020. What is the contribution the garment trade is making towards the GDP? As you know 70% of the inputs are imported. The contribution is only 25%-30% whereas the field of software contributes 100% to the GDP. But what are we doing to improve our IT industry? That is where our future lies. Sri Lanka has earned a USD 1.5 billion from the export of software but Japanese IT companies are currently looking at moving out from India and are looking at Vietnam.”

So why not Sri Lanka? 
Speaking on expanding relations between the two countries, Jayasuriya said that in order to act on this currently Sri Lankan students should be taught the Japanese language. “Crash courses should be incorporated in schools and Universities; we need Japanese teachers. We can have an IT diploma awarded parallel to University students. This could be similar to the German Technical Institute we had successfully established long years back. We need Japanese technical institutes in every province. We don’t have to put up new buildings. We can use school buildings and universities after school hours. We need government officials taking decisions positively with changes in attitudes. If they can’t fall in line we must have them replaced.”

“Such positivity can be inculcated only from the top down and not bottom up.”He appealed to the Ambassador to consider this request on behalf of the Japan Sri Lanka Friendship Society to help Sri Lanka to setup these centeres and teach the Japanese language and simultaneously setup IT training centeres and have them trained in software development. Presently the IT industry is annually losing 20% of its skilled staff to the overseas corporate sector while some companies come to Sri Lanka and train their staff. I believe that we can provide the necessary infrastructure and can offer the best possible human resource capital in the sector to become the most preferred destination in the area of Information Technology for the 1700 Japanese companies that are in the process of pulling out of India and China.”

Why do we have an energy crisis? 
Sri Lanka has sunshine all year round. The solar energy that we generate is around 1% of our requirement. European countries with 4 months of sunshine have 50% of their power generated from renewable energy. Why is it that we haven’t had any investments in renewable energy in the recent past? If you need power generated by LNG there are many companies in the world willing to invest in LNG in Sri Lanka. Why should the state owned institutions sign contracts to buy LNG for 25 years not knowing how the technology would change within the next 5 years? 

Investment in Minerals 
When talking about minerals, it is vitally important that the government should invite Public Private Partnership whilst keeping majority shares in the value adding process for all our minerals such as ilmenite in making Titanium and Nano Titanium, rutile, graphite making graphene, phosphate in making much needed NPK fertilizer for the farming community, tea extracts such as antioxidants and in cosmetics. These are industries that the government should participate in joint ventures with technically qualified overseas partners and handover the management to them. 

We are selling our gold. There are things more valuable than Gold itself. Sri Lanka is rich with all the natural resources of metals in its raw format be it Graphite, ilmenite or phosphate from Eppawala to name a few. We have the best graphite in the world whereas if you add value to it we can export graphene at USD 700/Kg. Then you can process it to titanium and Nano Titanium. A ton can be sold for US$ 25,000. We sell graphite in gunny bags at a rate of USD 2000 per ton. Is it not a crime?” he questioned.

Foreign education 
Sri Lanka is losing over USD 2 billion every year! At any given time there are more than 70,000 Sri Lankan students studying overseas. Simply because successive governments are mollycoddling a particular Trade Union which has totally forgotten about the Hippocratic oath. But they do act in a hippo-critical manner. All the developed countries in the world US, China, Japan, India, Australia, Malaysia and even countries such as Bangladesh and Nepal attract our students. Why can’t Sri Lanka follow suit? There were several universities that were interested in setting up universities in Sri Lanka. There was a famous British university that had been allocated 20 acres of land in the Mirigama Zone. But they refused to start off. At the moment Sri Lanka has no hope of such educational institutes that would have averted the dollar drain but also given an opportunity to earn much needed foreign investments and the inflow of dollars from prospective foreign students particularly from India. It is so vital as India has no foreign universities granting foreign degrees. If Sri Lanka can offer these foreign degrees Indian parents would be happy to send their children to Sri Lanka rather than to European destinations where some of get brutally assaulted and undergo cultural disparities.”

He suggested that foreign capital could be generated by offering resident visas to those interested at USD 500,000 to make Sri Lanka a second home. “Similar schemes are already practiced in Malaysia with USD 80,000  whereas earlier it was only USD 30,000. Similar laws are available in many countries of the West and East.”

Schedule B of the BOI Law 
He then made a reference to Schedule B of the BOI Law and said that the application of the Customs Law, Tax Law, Exchange control Law are no more in schedule B as new laws have been brought in repealing the old Laws. “BOI is not a regulatory authority but it is the prime institution for the facilitation of foreign direct investments (FDIs) in to the country. The new laws that have been brought in are not included in the schedule B.There should be other laws that should be brought in with required amendments under the BOI Law. There has to be a deemed approval process. Since areas such as environmental law, property ownership, forest have not been included a multitude of projects are failing having been pushed from pillar to post!” He exclaimed.

Jayasuriya further said that the Port city could be converted into a tax haven.“ Why not have a ‘ Cayman Island’ or ‘Liechtenstein’ in Sri Lanka? Why not develop Delft Island be developed in a similar manner? It spans 4000 acres! It won’t require the dumping of nearly USD 1.5 billion in to the sea to reclaim land. It is already there. You can even have casinos and every other facility that investors need to make them comfortable. Make no mistake, if we want to satisfy our desire to attract those notes with the face of George Washington we have to be much more liberal and flexible. We need to offer what our investors need! I sincerely hope the Port City would be a success. But, for the port city to be a success there should be pre-requisites that ought to be fulfilled.”

Expediting approval 
Jayasuriya believes that in order to attract foreign investors to Sri Lanka the approval process needs to be fast tracked. “It should be concluded in 24 hours. Approval from local authorities such as Forest department, Environmental Authority, Ceylon Electricity Board,Geological Survey & Mines Bureau should be obtained. If approval is not granted within the days the matter should end up before the Board of Directors of the BOI to exercise the power of deemed approval. If BOI approval of the project is not recognized by any person or an institution it should be made an offense punishable under the bribery and corruption Law.”

Democracy and Rule  of Law 
Speaking about democracy and rule of law, Jayasuriya referred to the U.S. federal court system’s definition of law; “Rule of law is a principle under which all persons, institutions, and entities are accountable to laws that are: Publicly promulgated, equally enforced, independently adjudicated, and consistent with international human rights principles.” This principle is enunciated in article 12(1) of the 1978 Constitution. Thankfully it is held high as sacrosanct by Courts of Sri Lanka.”

He then made references to certain projects that had been halted due to corruption. “For example, the Dole project had come under flak and criticism by successive governments and politicians. It was approved in 2013. It was the Dole project that started planting bananas in a scientific manner and was exporting Bananas to the west. At that time it was earning more than USD 15 million in foreign exchange. It had employed more than 2000 employees. That was the livelihood for more than 1500 families. Forest conservator has given them marching orders and filed action for the recovery of the land under the forest ordinance. I called him for a meeting and tried my best to convince him. I failed. I then advised the company concerned to file action, making BOI a party. The company has been waiting for nearly 7-8 agonizing years to get their approvals sorted out and obtain more land to expand the plantation,” he added.

“All I say is that those who do not see the larger picture and adopt a positive approach, are sick parasites. Some of these errant officials mislead the politicians. Unfortunately some of the politicians wouldn’t have the courage to overrule them as they wouldn’t know the subject. I am aware that the Minister of Justice is making inroads to change the law so that to some of the archaic laws will be able to meet the current challenges. I hope he would look in to these areas where there are substantive hindrances in making Sri Lanka a viable destination for investments. If we don’t implement these changes we will miss the bus. This is the need of the hour for economic stability and should be implemented immediately,” he said in conclusion.