Govt to amend laws to boost investor confidence
The existing general laws will be amended in the future to create a better investor environment, Investment Promotion State Minister Dilum Amunugama told the 42nd AGM of the Free Trade Zone Manufacturers’ Association (FTZMA) held in Colombo on Friday.
“As you know our investment environment is not that competitive compared to other countries in the world. We are thinking of changing certain laws, including labour laws which have become a problem for exporters where you find unions suddenly popping up and interrupting your operations. So in the future, the laws in the country will be converted into more investor friendly and there will be amendments even in the labour law which will be beneficial to investors.”
The Minister said they were looking forward to speeding up these amendments to boost the capacity of the BOI.
Concerning setting up fuel stations in zones Amunugama said they were sorting out the matter and discussions were held about fire protection. The minister said Sri Lanka needs to be competitive when other countries in the world come out with good packages and the country cannot afford to invite investors offering them just land and few concessions. The minister reiterated that they were looking at new packages with existing investors running out of concessions.
“I don’t think anyone here is enjoying concessions anymore other than the BOI enjoying the concession of the payment that you give them monthly or annually,” he told the FTZMA audience. The minister said they would explore the possibility to give the current operators or present exporters, another package of incentives as some sort of investment drive program, and try to make them reinvest or boost up their operations and increase the forex that comes into the country.
The Minister also said that the Government is in serious negotiations to come up with a couple of new zones in the northern area. The four FTZs will be established in Mankulam, Kankesanthurai (KKS), where the cement corporation was sometime back located, Paranthan where the Paranthan Chemical Factory existed and in Navanthurai Trincomalee which is one of the best locations for a free logistic hub, he said.
The State Minister said President Ranil Wickremesinghe was very keen on starting these free zones plus enhancing the powers of the BOI so that the government will be able to serve investors in a better and more powerful manner.
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‘Looming economic slowdown in Europe, USA severe threat to country’s exports’
Fizel Jabir
Despite the apparent end of the pandemic, exporters are facing another global crisis, compounded by the crippling local financial crisis. The looming economic slowdown in Europe and the USA which are Sri Lanka’s major export destinations poses a severe threat to the country’s exports, newly appointed FTZMA Chairman Dhammika Fernando opined addressing the 42nd FTZMA AGM.
“In addition, the increase in corporate and personal taxes, unfavourable forex rates and the abnormal increase in the cost of commodities, particularly energy, have caused our production cost to skyrocket, eroding our global competitiveness.”
“As a result, our export figures took a plunge and many major industrial exporters are downsizing, shutting down operations or relocating. The SME sector has been particularly hard hit with the withdrawal of loan moratoriums and the contraction of large-scale enterprises having a cascading effect.”
“We fervently hope that the authorities will realize the seriousness of the situation and take swift action to prevent mass–scale furloughing, job losses and closure that will ultimately lead to dwindling foreign income to the country.”