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Robust structural reforms and macroeconomic stability seen as vital to ensuring FDI inflows

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Heshana Kuruppu

By Ifham Nizam

The National People’s Power (NPP) government to enhance Foreign Direct Investment inflows, must continue to implement robust structural reforms, maintain macroeconomic stability and address vulnerabilities in the financial sector, senior Chartered Accountant Heshana Kuruppu said.

Kuruppu, who is the President of CA Sri Lanka and President of the South Asian Federation of Accountants, speaking to The Island Financial Review stressed that consistent and transparent policies, along with efforts to improve infrastructure and reduce bureaucratic hurdles, will be essential in rebuilding investor confidence and fostering a conducive environment for long-term investments.

Extracts from the interview;

Q: How do you perceive the new government’s economic initiatives in terms of their potential impact on local businesses?

A: NPP’s current proposal is for an interim government until parliamentary elections occur. Thus, it’s uncertain if they will implement major initiatives outlined in their policy framework. A new budget must be presented to parliament for any significant changes, which won’t happen with the existing parliament. Consequently, it’s too soon to assess the impact on local business.

Q: Which sectors do you think will benefit the most from these initiatives, and which ones might face challenges?

A: As highlighted above, it is too early to comment on the sectors going to have an effect. However as per the policy statement NPP has identified several priority sectors, such as, ICT, Fisheries, Construction, Agriculture, Tourism, Creative sectors (Art, Cinema, Music) etc.

Q: How prepared are businesses in Sri Lanka to adapt to these new policies?

A: Sri Lankan businesses seek consistent policies, whether fiscal, investment or labor-related. Despite past inconsistencies, the private sector has significantly contributed to economic growth. Consistency could have unlocked greater potential. Political parties need to support this now and the NPP appears to share this view, having promised private sector-friendly policies.

Q: How will these initiatives influence tax policies and what are your expectations regarding changes in corporate taxes?

A: Following the crisis, low and middle-income earners faced significant challenges. Their disposable income decreased due to taxes and the cost of living rose markedly. Despite low inflation, high living costs persist since incomes haven’t adjusted accordingly. The election results clearly show their dissatisfaction.

The incoming President and new administration will face the challenge of addressing these needs. To satisfy this segment, taxes need to be reduced, safety nets increased, or both. However, these actions should not strain the government budget as borrowing is not an option.

Conversely, achieving a sustainable solution in the mid to long term relies on real GDP growth. However, this requires a boost in capital expenditure. Yet, raising capital expenditure might result in a budget deficit.

Therefore, a careful strategy is needed to manage these conflicting demands. I don’t anticipate significant changes in corporate taxes in the near future.

Q: What is your opinion on the new President’s focus on the promotion of entrepreneurship and innovation in the business sector?

A: Key initiatives of the entrepreneurship policy include creating strategic think tanks, introducing tailored taxation frameworks and enhancing investment protection legislation. The policy emphasizes supporting micro, small, and medium-sized enterprises (MSMEs) through specialized divisions, collateral-free loans and cooperative business models.

Additionally, it focuses on optimizing industrial zones, adopting sustainable practices and leveraging digital technology to drive innovation and market efficiency. The overarching goal is to create a conducive environment for entrepreneurship, ensuring affordable infrastructure and transparent market operations.

These are all good initiatives. Historically, many promising proposals appear in election policy statements and sometimes in budget plans, but very few are actually implemented. Let’s hope this time is different.

Q: Do you think the new policies are sufficient to attract foreign direct investment (FDI)? Why or why not?

A: Regardless of whether policies are new or existing, their consistency is what truly matters.

Maintaining consistent policies is vital for drawing and keeping FDI. Predictable regulations, lower risks tied to sudden changes, aiding long-term investment planning are important. Conversely, inconsistent policies can deter investors by creating uncertainty and unexpected costs. Frequent alterations in tax laws, labor rules or trade policies can lead to an unstable business climate, deterring foreign investors.

In addition, economic and political stability is crucial for attracting Foreign Direct Investment (FDI), as it provides a predictable environment for investors. Sri Lanka’s recent economic challenges, including high inflation, currency depreciation and a significant debt burden, have created a complex landscape for potential investors. However, the country is showing signs of stabilization, with moderate growth projected at 2%-3% in 2024.



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U.S.-Russia diplomatic thaw ignites Sri Lanka’s hopes for trade windfall

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Thilaka Jayasundara

Sri Lanka’s Ministry of Industries and Entrepreneurship Development Secretary Thilaka Jayasundara voiced confidence yesterday that warming U.S.-Russia relations could catalyse economic opportunities for Sri Lanka, during a forum hosted by the National Chamber of Commerce.

Speaking at the ‘Russia-Sri Lanka Development of Trade, Economic, and Banking Cooperation’ event, Jayasundara, a seasoned official with experience across multiple political administrations highlighted that eased secondary sanctions resulting from improved Moscow-Washington dialogue could unlock favorable trade conditions for Sri Lanka. Her remarks drew visible approval from Russian Ambassador Levan Dzhagryan, seated nearby.

“Sri Lanka’s balanced, neutral foreign policy positions us to benefit from any collaborative outcomes of U.S.-Russia talks,” she asserted, underscoring the nation’s potential to leverage evolving geopolitics for trade and investment gains.

Jayasundara didn’t miss the opportunity to urge Sri Lankan trade chambers to collaborate with the Export Development Board (EDB) to diversify exports and maximise foreign exchange earnings.

“Businesses and banks present here should explore to forge stronger B2B linkages for mutual benefit at the breakout sessions,” she added, referencing discussions at the forum that connected SMEs and large firms in agriculture, fintech, pharmaceuticals, industrial manufacturing among other sectors.

The secretary’s optimism aligns with Sri Lanka’s broader strategy to navigate global economic headwinds by capitalising on diplomatic shifts and expanding its export portfolio.

According to the EDB, the total export value from Sri Lanka to Russia was USD 144.25 Mn in 2023 and total imports from Russia to Sri Lanka for the same period were USD 393.55 Mn. Official data for 2024 remains pending.

The Russian delegation that took part in the B2B meetings was headed by Dr. Alexander Rybas, Trade Commissioner of the Russian Federation.

By Sanath Nanayakkare

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Hemas Hospitals named Official Healthcare Partner for JOE-PETE Big Match 2025

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Hemas Hospitals has proudly partnered with the JOE-PETE Big Match 2025 as the official healthcare provider, continuing its strong tradition of supporting community events and ensuring the safety and well-being of all participants and spectators.

As one of Sri Lanka’s most anticipated annual school cricket encounters, the JOE-PETE Big Match brings together passionate fans, students, and alumni from St. Joseph’s College and St. Peter’s College. With thousands expected to attend, Hemas Hospitals steps in once again, marking its fifth consecutive year of involvement, to provide expert medical support on-site.

“As a leading private hospital network, we’re proud to be a part of this iconic event. Our partnership reflects our commitment to community health and to being there where it matters most,” said Dr. Pradeep Edward, Director General Manager, Hemas Hospital Thalawathugoda. “We want all attendees to enjoy the event with peace of mind, knowing that their health and safety are in good hands.”

During the match days, Hemas Hospitals will deploy on-site medical teams, ambulances, and a qualified sports medicine medical officer to respond to any health emergencies or injuries. From first aid to injury management, the team is equipped to handle a wide range of situations with the efficiency and professionalism that Hemas is known for.

“Our practice of having highly trained medical staff and emergency support continues,” said Anjana Cramer, Business Development Manager. “Our aim is to be proactive, responsive, and accessible throughout the event.”

In addition to healthcare support, Hemas Hospitals will have a strong brand presence at the event, with Hemas flags, A-boards, a branded ambulance, and the medical team visibly positioned throughout the grounds.

“We want this partnership to not only represent medical readiness but also our larger message of promoting health and unity through sport,” said Duwayne Rozario, Executive – Business Development. “It’s about more than just treatment, it’s about being an active part of the community.”

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Sun Siyam Pasikudah; unique cluster of luxury chalets looking out to Eastern sea

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Sun Siyam Pasikudah; irresistible appeal.

Weddings on the beach, an aqua platform to be served dinner in the sea; four ocean pavilions, informal camaraderie, more so, come as you are atmosphere for informality and bonhomie un matched in any resort.

What are we talking about? Just a cautious; yet unavoidable blend for a holiday; and an atmosphere of ‘let yourself go’, experience unmatched in a resort hotels.

Where are these ‘happenings’? At the Sun Siyam Pasikudah.

Just so, assuming you’ve been to the Maldives, and factually, it’s a demand driven destination, to the US, so too, we assume, Sun Siyam Pasikudah is a growing destination for holidays in the warm waters of the Indian Ocean surrounding the East coast of this island.

Why surrounding? Simple; just that Sun Siyam Pasikudah perched by the sea, apart from the warm waters bordering the resort; we are also of the positive atmosphere of the shallow sea abutting the picturesque appeal viewed from the sea. Appealing to tourists already enjoying the numerous attractions of this resort facility.

Our observations were French, Germans and other Europeans were already enjoying the facilities of Sun Siyam Pasikudah.

General Manager Arshed Refai was on hand to give us detailed explanation on facilities guests could expect and enjoy and numerous offerings that appeal for long stays. Quite regularly, he said, guests are quite reluctant to depart. Particularly Europeans who we observed enjoying the sun and more so walks along the beach.

Additionally, Ministry of Tourism provided train services as well to encourage tourist traffic to the East to enjoy the growing popularity of this resort and other resorts we observed in the area.

GM Refai further said the dining experience, and varied choice of cuisine catered to each national from West to East; which, he said, was quite in order to cater to choices in food and individual taste desires.

Originally launched in 2014 as Sun Aqua Pasikudah, the property underwent a rebranding in 2020, becoming part of Sun Siyam Resorts Collection and adopting the name of Sun Siyam Pasikudah. ‘Was it popular among local tourists’? He responded positively that its appeal was growing, related to the chain of other destinations in the East. Additionally, its popularity and appeal, particularly to its chalets and Five Star luxury was in reality not an available concept elsewhere.

Chef Dilan Jayasundera, explained varied cuisine and food flavours he was adept in producing to ensure guests were not in need, food vice.

He further said a broad cross section of tastes was catered to.

Asst General Manager Keerthi expanding on additional facilities said 34 rooms were villa style accommodation spread over the land. Four ocean pavilions complemented a formal atmosphere.

GM Refai further said 90 guests at peak accommodation enjoyed international cuisine.Excursions, to the fish market, sea observations in glass bottom boats to observe fauna and flora under water, including the varied amphibian fish population were of great appeal.
Questioned on any Maldivian influence, he said, Sunsiyam was not influenced by the Maldives, but its style was of broad appeal.

The resort’s transformation showcases bold monochromatic interiors balanced with rich golden tones, creating a unique, sophisticated, and chic environment. The resort offers distinct culinary adventures, immersing guests in Sri Lanka’s vibrant flavors and colonial traditions. Noteworthy options include The Cellar, Sri Lanka’s largest wine cellar on the eastern coast, the Tea House with an extensive tea collection for a delightful tasting journey, Slice & Grill, a fast-casual poolside concept with a retro design, and the Beach Shack, a tropical paradise with Caribbean vibes.

 

By Steve A. Morrell

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