Sri Lanka Eyes Middle East Funds for Investment Opportunities

DUBAI - Sri Lanka is inviting surplus funds in the Middle East to consider the country as destination for investment, said Dr Palitha Kohona, Secretary of the Ministry of Foreign Affairs.

By Abdul Basit

Published: Fri 12 Dec 2008, 2:06 AM

Last updated: Sun 5 Apr 2015, 11:21 AM

“We would like to encourage these funds to invest in our country as it is among one of the few countries in the world where foreign investment is guaranteed under the constitution,” said Kohona, speaking to a gathering of select media here on Thursday along with Consul General Wasantha Senanayake.

“The Middle East is a very important region for us politically and economically, especially for tourism, investment and bilateral trade. The Emirate is also home of 1.5 million Sri Lankans.”

Colombo is looking at the Middle East as a major market for export, especially agricultural produces.

The country is producer of a range of agricultural products and most of these are eco-friendly. Colombo does encourage investment in fisheries sector as well.

In response to a question regarding Free Trade Agreement or avoidance of double taxation accord with the UAE, Kohona said, “We have been talking about these with the UAE, but the step will be taken by the Gulf Cooperation Council jointly. We have already proposed the GCC that Sri Lanka intends to sign double taxation agreements.”

The country has a range of bilateral investment protection agreement with other countries.

The eastern province of the country is a very lucrative area for investment and government does provide incentives such as tax concessions, he informed.

“We have not had the full impact of current downturn in the world economy because our stock exchange is not wholly dependent on overseas funds. So there is no massive outflow,” Kohona said.

“Our financial framework is very safe; as a matter of fact the global financial crisis has so far affected Sri Lanka at a minimal.”

He said, “Our currency has maintained its value, which shows that the economy is on a sound footing.”

The country is also a niche producer of high quality garments and apparel. Sri Lanka has increased its market share in Europe and America in garments as its exports continue to grow.

The country produces 60 per cent of the world’s aircraft tyres.

The country has more than reasonably developed infrastructure, communication network, harbour and airline connectivity.

Colombo harbour is one of the 10 busiest container terminals in the African, Asian and Australian regions.

Last year, Sri Lanka recorded over $750 million in foreign direct investment.

Exports grew by almost 8 per cent and agricultural exports also witnessed a significant jump, but the tea market faced trouble for a while.

Incentives provided by the government are very attractive for certain industries.

Funds repatriated by the overseas community are close to $3 billion, which is a significant contributor to the economy.

abdulbasit@khaleejtimes.com