By The Pulseline News Desk
Sri Lanka is preparing a major overhaul of its foreign investment promotion strategy, focusing on institutional restructuring, stronger legal frameworks and targeted engagement with international investors as the Government seeks to attract more foreign direct investment (FDI) and strengthen export capacity.
Duminda Hulangamuwa, Senior Economic Advisor to the President and Chairman of Board of Investment (BOI), has said attracting foreign investment required more than promotional campaigns and invitations to international businesses, stressing that Sri Lanka must first establish the institutional, legal and infrastructure conditions necessary to give investors confidence. “You can’t promote FDI by going and talking to investors and asking them to come and set up industries. It won’t happen overnight. We have to do reforms in certain areas,” Hulangamuwa has said.
One of the key proposals is the establishment of a separate institution dedicated to investment promotion and research, following President Anura Kumara Dissanayake’s initiative to strengthen the country’s investment promotion architecture.
Hulangamuwa has said Sri Lanka must first establish a stronger presence on the global investment map and create the necessary foundations to attract sustained international investor interest.
BOI to become genuine one-stop investment centre
A major component of the proposed reforms involves strengthening the legal and institutional powers of the BOI.
Hulangamuwa has said the Government intends to transform the BOI into a genuine one-stop investment centre, enabling investors to obtain the necessary approvals through a single institution rather than navigating multiple government agencies and lengthy administrative procedures.
He has revealed that amendments to the existing BOI legal framework were already being drafted to strengthen its authority and improve its ability to facilitate investment projects.
The proposed changes are expected to address one of the longstanding concerns of investors, which is, the complexity of dealing with multiple institutions when establishing and operating businesses in Sri Lanka.
The reforms are also intended to improve coordination between government agencies and reduce procedural obstacles that can delay investment decisions and project implementation.
Investment strategy linked to export growth
Hulangamuwa has said the Government’s investment promotion strategy was closely linked to its broader objective of increasing exports and foreign exchange earnings.
He has identified tourism and the export of goods as key sources of foreign currency, emphasising that attracting FDI should contribute directly to expanding the country’s productive and export capacity.
The focus, therefore, would not simply be on attracting foreign companies to establish operations in Sri Lanka, but on securing investments capable of generating exports, accessing international markets and strengthening the country’s participation in global trade.
He has also highlighted the importance of negotiating Free Trade Agreements (FTAs) and expanding market access for Sri Lankan products, noting that investment promotion could not be separated from the country’s wider trade policy.
Improved access to international markets, combined with a more predictable investment environment, would be important in encouraging foreign businesses to consider Sri Lanka as a regional production and export base.
Five countries identified for targeted investor engagement
As part of a more focused investment promotion strategy, the Government has identified approximately five countries for targeted engagement with potential investors.
Rather than relying heavily on large-scale investment forums and promotional events, the proposed approach will involve direct, one-on-one discussions with investors in those markets.
Hulangamuwa has said this would allow Sri Lanka to present specific investment opportunities, engage more closely with prospective investors and develop stronger business relationships.
The approach reflects a shift towards more targeted investment promotion, with greater emphasis on identifying potential investors and matching them with opportunities in Sri Lanka.
Institutional reforms before investment drive
Hulangamuwa has expressed confidence that international investor interest would gradually improve once Sri Lanka establishes the necessary institutional capacity, legal framework, infrastructure and global investment profile.
His remarks come as the Government seeks to reposition Sri Lanka as an attractive destination for foreign capital amid the country’s efforts to move towards investment-led economic growth.
The proposed investment promotion agency, amendments to the BOI legal framework and targeted international engagement are expected to form key elements of that strategy.
However, the effectiveness of the proposed approach will ultimately depend on how quickly the Government can implement the institutional reforms, streamline investment approvals and create a predictable operating environment for businesses.
For Sri Lanka, the challenge is no longer simply to promote investment opportunities overseas, but to ensure that the country has the legal, institutional and economic foundations to convert investor interest into actual investment, exports and employment.
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