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Why is Sri Lanka unable to attract FDI ?

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by Vijaya Kumar

Every developing country is keen on attracting Foreign Direct Investment (FDI) and I am sure the manifestos of the candidates contesting the Sri Lankan Presidency will be assuring the people that they will attract FDI to develop the country.

However, there is some misunderstanding about what FDI is. Some wrongly think that the Japanese Light Rail project was an FDI. It was Japanese aid to Sri Lanka – aid in very generous terms which was rejected by the Gotabaya government as the Rajapaksas for personal pecuniary reasons always prefer to deal with the Chinese. FDIs are substantial lasting investments made by foreign companies or governments into joint ventures or firms, which are often managed by them as they plan to recover their investments from the profits they generate. We have had a few examples of FDIs such as investment in Dialog and Sri Lanka Telecom (SLT) and Adani’s investment in the Port and Wind Power.

Greenfield FDI is where the investor’s FDI is directed towards establishing a new enterprise. Being a developing country, we should prefer to attract greenfield FDI in an area new to us, preferably involving high technology. We have been able to attract very little FDI of this type.

Even the petroleum distributing companies which were nationalized by Sirimavo were not FDI. Shell, Mobil and Caltex were subsidiaries of British companies functioning before we became independent. There were two reasons why they were nationalized. While providing the semblance of competition, there was evidence of collusion in price-fixing and they resisted plans to establish a refinery in the country.

The nationalization of the petroleum distributing companies did have a bad effect on our ability to attract FDI, especially as the government did not pay any compensation to the companies. The investment in highways was also not really FDI although shown as such as they were not investments by foreign companies, but funded by loans given to us on high interest. The same is true for the airport and harbour at Hambantota although the harbour subsequently became an FDI when it was was handed over to the Chinese company as we could not repay the loan. If the attempt to find a foreign company to run the airport is successful, then that too would be an FDI.

There are very few successful FDIs which we have been able to attract. One was the Trelleborg solid tyre factory established here after Sri Lanka decided to regulate the export of raw rubber. This was a Greenfield FDI investment but after several years, it went through a few owners ending up with a Rajapaksa crony company. There was also the USD 26.5 million FDI by ‘Volkswagen’ in Kuliyapitiya which would have been Greenfield FDI, but sadly never materialized. Dialog although not in a new area has brought in some new technology which spurred SLT into seeking foreign investment and technology in order to compete. There has also been some FDI in the IT service sector and in Banking. We have however been able to attract only very little Greenfield FDI and none of that in high technology.

There are several reasons why we have failed to attract such FDI. One of the causes is demonstrated by the FDI attracted by the Ranil Wickremesinghe government – the lack of transparency in the FDI selection process. During 2010-2015 and the last four years, the government has made its investment decisions based on unsolicited bids and even when a tender is called, disqualifying tenderers on technical reasons so that only the preferred tenderer remains. The Adani investments were unsolicited offers but in this case the culprit may have been the Modi government using its financial hold on us to promote its crony capitalist, Adani.

Most Western countries have strong laws that prevent their companies paying bribes and unlike in our country, these are enforced e.g. the action taken against Airbus for paying bribes to sell 15 aircraft to SriLankan Airlines – nothing done to recover this money from the recipients although details of the transaction have been available to the Sri Lankan government after Airbus was found guilty. The reluctance of reputed firms to get involved with Sri Lanka is therefore not surprising.

The second cause is the absence of rule of law in our country, although there appears to have been some improvement in the last few months. We had a Chief Justice who boasted he saved Mahinda while he was ‘Helping Hambantota’ and another who offered favourable decisions to the incoming new government if he was allowed to continue in office. Our courts (and our Attorney General) seemed to have special rules for corrupt and murderous politicians.

Investors other than those in partnership with crooked politicians, would not consider investing in a country unless they are assured of fair treatment by the courts. Furthermore, even if the courts rule in your favour, the whole process is far too long. Legal processes to punish defrauders and wrongdoers or recover payments owed take several years in our country and for businessmen, time is money.

The third cause is the smallness in our market. Any investor in Sri Lanka cannot hope to survive if he caters only to the local market. An investor who already has an export market may be enticed by the availability of raw material as we saw in the Trelleborg case. It may be possible to attract FDI to manufacture Titanium products from Ilmenite or Phosphate fertilizers from Eppawala apatite, but such investments may not always be acceptable to our people. We do have a large market nearby, the Indian market and if we are able to have agreements that permit the export to India of the product manufactured here, this could attract FDI.

Could we try to make our Port City a new Singapore as some claim? Singapore encouraged investments in identified potential high-growth sectors such as skill and technology-intensive sectors, machinery, pharmaceuticals and aerospace by offering incentives to investors and has over the years become a centre for business and financial services. Moreover, it provides an attractive living environment which encourages multinationals to site their enterprises there. It is unlikely that Port City would be able to replicate Singapore given its heavy Chinese involvement and the political problems between China and the US. It could have attracted Chinese industry seeking an alternate location to export to the West (the China Plus One policy) but that too seems unlikely as Chinese industry is presently facing problems of oversupply.

Unless our new President is able to install a transparent procurement system, guarantee the rule of law and speed up our courts, we are not going to attract any worthwhile FDI.

What else can our new President do to attract Greenfield FDI ? We should provide incentives for pharmaceutical FDI from India to produce generic medicine but we should also encourage the manufacture of active pharmaceutical ingredients (API) as this could give a boost to our technological capabilities. The other areas for FDI worth exploring are semiconductor manufacture, tooling industry and software development. We should work towards obtaining Indian concurrence to permit us to access to the Indian market and use it to attract industrial FDI from multinationals and leading international firms. This will improve the technological learning of the workers employed in these industries and help them start their own spin-offs (small industries supplying parts to big factories) and later on even start their own competitive industries.

We have a large diaspora who could get involved. Special concessions over and above that offered to other industrialists can be provided to dual citizens who are prepared to invest their funds and knowledge in manufacture for the export market provided their investment and number employed exceeds a specified threshold.

FDI is essential, especially Greenfield FDI, but it is not going to fall onto our laps. We have to work hard to attract it.

Vijaya Kumar is a Professor Emeritus in Science of the University of Peradeniya and a former Chairman of the UN Commission on Science and Technology for Development.



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Combining local resources,traditional knowledge and science to build a food-secure Sri Lanka

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World Food Day 2026: Innovating today for a better food future

by Dr. Kaushalya Wijayasekara

What will be on the Sri Lankan dinner table ten years from now? Will our children be able to get nutritious food at a price their families can afford? Will farmers be able to grow enough despite changing weather and rising costs? And how much of the food we produce will actually reach the consumer, instead of being lost or wasted along the way?

These questions can’t wait. A farmer faces unpredictable weather. A family faces rising food costs. Fruit goes unsold after a good harvest. Some children do not get enough nutrition. The future of food is tied to the future of Sri Lanka itself.

World Food Day 2026 is a chance to look beyond the immediate problems and ask whether we can build a food system that feeds our people well, gives farmers better opportunities, protects the environment and makes better use of what we already have. The answer can be yes, but we will have to think differently.

We are not starting from zero. Sri Lanka has diverse crops, fisheries, traditional food knowledge, indigenous varieties, research institutions, universities and a young generation able to create new solutions. What we need is to bring these together and act. Producing more will not secure our food future on its own. It will depend on how intelligently we produce, process, preserve, distribute and consume food.

Making more of what we already have

Innovation does not always mean inventing something new. Often it means finding better uses for the resources we have.

Sri Lanka grows traditional rice varieties, kurakkan, green gram, cowpea, jackfruit, breadfruit, cassava, sweet potato, coconut and palmyrah. All of them have great potential for modern, nutritious, value-added foods. Jackfruit and breadfruit can be made into flour and other convenient products. Traditional rice varieties can go into new foods that suit changing consumer needs. Palmyrah, with its strong cultural heritage, can create new income through better processing, packaging, quality assurance and market development.

The aim is to connect our traditional food knowledge with modern consumer needs and technology, while keeping our food heritage.

Stop wasting the food we produce

Reducing food loss and waste should be a major priority. Seasonal fruits such as mango, banana, papaya and pineapple can be lost in large quantities when production exceeds demand or when storage, transport and processing facilities are inadequate. With suitable technology, these fruits can become dried products, pulps, powders, beverages and other shelf-stable foods.

Agricultural and fisheries by-products are resources too. They could be turned into food ingredients, animal feed, bio-based products and other useful materials, which would move us toward a more circular food economy.

Technology alone is not enough. We need stronger local processing facilities, cold storage, efficient transport, collection centres and market information systems, especially close to where food is produced. Cutting food loss raises the value of what our farmers and fishers already produce.

Nutrition and food safety come first

Food security means more than having enough food. People also need food that is safe and nutritious.

Sri Lanka can develop affordable, nutritious foods from local pulses, grains, vegetables, fruits and fish. Children and other vulnerable groups should get particular attention. Schoolchildren in particular deserve a focus: safe, nutritious, locally sourced products for school feeding programs would support child nutrition, local farmers and domestic food industries at the same time.

Food safety must stay at the centre of food innovation. Good hygiene, quality control, laboratory testing, traceability and appropriate food safety systems are what make new products safe as well as attractive and nutritious.

A food system that can cope with climate change

Climate change is already affecting agricultural production, water availability, crop yields and food prices. We need food systems that can handle changing conditions. That means climate-resilient crops, efficient water use, soil and water conservation, better storage and resource-efficient food processing.

Traditional knowledge matters here. Generations of Sri Lankan farmers have developed practices suited to local climates and ecosystems. Combining that experience with modern science can give us solutions that fit local conditions and are sustainable. Technology alone will not build the future of food. Science, experience and local knowledge together can.

Give young people a bigger role

Sri Lanka’s universities have an important part to play in shaping our food future. Young people should be encouraged to identify real problems in the food system and work on practical solutions in areas such as food waste, sustainable packaging, nutrition, food safety, modernising traditional foods and digital technologies.

A good research project should not always end as a research paper. Where appropriate, research should be supported to move on to products, technologies, enterprises and community solutions. That needs stronger partnerships between universities and industry, along with mentoring, research funding, business support and market connections. If young researchers and entrepreneurs can turn their ideas into viable food innovations, both consumers and producers will benefit.

A pathway designed for Sri Lanka

We do not need to copy food-system models from other countries. We can build a pathway that suits our own resources, culture and needs. It would bring together local resources, traditional knowledge, scientific research, appropriate technology and entrepreneurship, with farmers, fishers, universities, research institutions, food industries, entrepreneurs and policymakers working side by side.

The goal goes beyond selling raw materials. We need to create more value, reduce waste, improve nutrition, generate jobs and strengthen rural livelihoods. This matters especially for small and medium-scale food enterprises, which can drive local economic development when they get the right technical, financial and market support.

The choices we make today

The food future will not create itself. It will be shaped by what we grow, what we research, what we process, what we consume and what we choose not to waste.

So, the question for World Food Day 2026 is this: what can we do today so that every Sri Lankan has safe, nutritious, affordable and sustainable food tomorrow?

The answers are already around us, in our farms, fisheries, food businesses, universities, laboratories and communities. We have the resources, the traditional knowledge, the scientific expertise and talented young people. What we need now is to connect them and act.

A better food future begins with the choices we make today.

Dr. Kaushalya Wijayasekara

Senior Lecturer, Department of Biosystems Technology, Faculty of Technology, University of Ruhuna

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20th Anniversary of Digampathana blast – the day Sri Lanka Navy cried

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Aftermath of the terror attack

By Admiral Ravindra C Wijegunaratne
WV, RWP and Bar, RSP, VSV, USP, NI (M) (Pakistan), ndc, psn, Bsc
(Hons) (War Studies) (Karachi) MPhil (Madras)
Former Navy Commander and Former Chief of Defence Staff
Former Chairman, Trincomalee Petroleum Terminals Ltd
Former Managing Director Ceylon Petroleum Corporation
Former High Commissioner to Pakistan

The Digampathana suicide truck attack on 16th October 2006 remains the deadliest single strike in Sri Lanka Navy history, leaving scars that time cannot erase.

It was a seemingly ordinary Monday morning on 16 October 2006, but the calm of that day would soon be shattered in a way none of us could have imagined. As the Commandant of the Naval and Maritime Academy and Flag Officer Commanding Naval Fleet at Trincomalee, I was aware that a number of my cadets were travelling that morning, part of a convoy of fifteen buses carrying naval personnel from Trincomalee, Colombo, and other bases, heading toward Dambulla to rendezvous with another group. The convoy also included trucks and escort vehicles, a routine movement planned and coordinated with the army to ensure the roads were clear. The morning started quietly. Some personnel greeted friends, handed over their weapons, or strolled to a nearby tea shop. It all seemed so ordinary—too ordinary for what would come next.

Sri Lanka Navy sunk LTTE Ships carrying arms, ammunition and warlike materials thousand miles away from Sri Lanka in Indian Ocean in September and October 2007.

By late morning, both convoys had reached the small ground at Digampathana, near the Sigiriya junction, and personnel mingled briefly, unaware that a carefully orchestrated act of terror was waiting. Then, suddenly, an empty half-truck veered directly into the convoy. It exploded with a ferocity I can still recall as if it were yesterday. Nuts, bolts, and high explosives tore through the air. Pandemonium erupted instantly. I later learned that 107 of our naval personnel were killed on the spot and another 153 critically injured. The scene was indescribable—bodies scattered, vehicles mangled, personal effects strewn across the ground. I remember later hearing that the head of the suicide bomber was recovered more than 100 meters away from the blast, a grim testament to the sheer force of the explosion.

I was in my office at the Naval and Maritime Academy when my mobile phone rang. A young midshipman from the 21st intake called, his voice trembling: “Sir, there was a huge explosion at the convoy point! Many are dead … my batch mate Wijesundara is among them.” I immediately jumped into my jeep with my escort Chief Petty Officer and driver and rushed to Digampathana, relying on every ounce of my driving skill to reach the scene. The journey, which usually took little more than an hour, felt endless that day, each passing mile weighed down by dread.

When I arrived, I was confronted with a sight that no training can prepare you for. The injured were being rushed to Dambulla Hospital, where doctors and nurses worked tirelessly, improvising in ways that saved lives despite the overwhelming chaos. I went back to the site after visiting the hospital. The remains of our naval personnel were scattered across the ground, and someone had begun collecting weapons and protective gear. I immediately contacted Surgeon Rear Admiral Nico Jayasekara and received his instructions: collect all body parts in separate bags and transport them to the Trincomalee Naval Hospital mortuary. This gruesome work had to be done with care and dignity, and it filled the icebox in my vehicle. Through DNA testing initiated by Rear Admiral Nico, we were able to identify every naval personnel lost that day, bringing some closure to grieving families.

The Navy Commander at the time, Vice Admiral Wasantha Karannagoda, was devastated. I had worked closely with him and knew how deeply he cared for his men. He ensured that the fallen were honoured with full ceremonial naval funerals at Welisara Naval Base, attended by families and comrades. Sixty-seven funerals were conducted in a single day—a number that still haunts me.

The Digampathana attack remains the largest single loss of naval life in our history. It was a day of sorrow, but also a day that reinforced our resolve. The tragedy galvanized the Navy to target the LTTE Sea Tiger wing with renewed determination and reshaped our maritime operations forever. Every time I think of that day, I remember not just the lives lost, but the courage, professionalism, and dedication of those who survived, those who treated the injured, and those who ensured the fallen were honored properly. May the souls of our naval hero’s rest in peace, their sacrifice guiding us and inspiring generations of naval personnel to come.

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‘Murder at Whitby Abbey’

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Tales of Mystery and Suspense – 24

I was intrigued by the title of a book I found in a book drop at the condominium of a friend, Murder at Whitby Abbey, and I brought it home with me though I will not be able to return it in the near future. It was described on the cover page as ‘a standout in the crowded medieval mystery field’, though I fear I do not know of other books in this field, apart from the Cadfael series, which I have dealt with earlier.

The book, by Cassandra Clark, is set during the reign of Richard II and has as a backdrop his precarious position, which led to his being replaced, and murdered, by his cousin Henry, who reigned as Henry IV. It is a gloomy book, the action taking place in the twelve days of Christmas leading up to the Epiphany. And the gloom is pervasive, even though this is supposed to be a time of festivity, with mummers performing, and many of those in the guest house where the heroine stays going to town to enjoy themselves, with much drinking and much music, which also fills the guesthouse.

The heroine Hildegarde is a nun, sent to try to acquire a relic being sold by Whitby Abbey, though this was also a penance set by the Abbot of the monastery that governed her abbess because she had had sex with a man. Soon after she and her companions reach the Abbey set high on a cliff, she finds that there are other bidders, and soon suspects that the hierarchy, not perhaps the Abbot who seems a weakling, but his rapacious bursar, is determined to make money, and not above creating false relics to sell to several aspirants.

After Hildegarde and her Cistercian companions – Whitby is a Benedictine Foundation – two monks, Gregory and Egbert, and a young priest Mark, reach the abbey, they find that Aelwyn, a monk they had met on their way to the guesthouse had died. This was in the apple store, and they realize, when they find the surplices of novices stuffed into the air vents, that he had been left to suffocate in the overwhelming scent of apples.

Clark

The Cistercians are asked to look into the death, perhaps because they are likely to get no cooperation from the Abbey folk, but perhaps because those in charge are keen to know what happened. And the infirmarer, an old monk, suggests Hildegarde talk to a man called Edred who worked for the bursar, and had been a friend of Aelwyn’s. But Edred too is killed, before he can keep an appointment he had made with Hildegarde, drowned in a pool near the farmhouse of the Abbey.

Meanwhile tensions arise between the fisherfolk and the abbey for the bursar wants to charge them for using the beach that technically belongs to the abbey to dry their fish and their nets. This leads to physical battles, when the guards used by the abbey, under the command it seems of the bursar whose determination to make money is not resisted by the abbot and the prior, try to storm the area where the fishermen live.

Hildegard finds out more about what had happened through two youngsters, one of whom Torold is the son of Aelwyn by a woman who worked as a prostitute for a cartel, and with whom Mark fell in love. The other works on the farm and had seen Edred meet someone near the pool, after which that someone left the place by himself. And the boy had also found in the pool a sort of dagger with the seal of the abbey.

He and his dog, and Torold who follows her, rescue Hildegarde from a man at arms who has waylaid her and tries to rape her earlier. Escaping into the abbey she was nearly been raped then by the bursar, but she managed to escape, in the process setting fire to him and the muniments room, which led, when he was rescued, to the discovery of a box with the money he said had been stolen, blame being cast on both Aelwyn and Edred.

Matters come to a head when the fisherfolk try to storm the abbey, being resisted by the men at arms stationed on the towers. But then Hildegarde realizes that behind the murders was the bursar’s clerk, whom she pursued to the cathedral. There is great drama then as she escapes from him when he tries to kill her, and then from the man at arms who had tried to both rape and kill her, but they both fall from the scaffolding she had climbed, the latter coming from a tower where he had been stationed.

Both of them think they run the rapacity of the abbey, the latter claiming to work for the nobles opposed to Richard, who is presented throughout the book as devoted to his subjects, not to power or money. But though the villains die, the bursar continues, having got over the hysteria the fire had caused and his acknowledgment then of guilt – and though the abbot and the prior seem less vicious, whether they will be able to assert themselves is questionable.

Before the climax, when the others in the guesthouse were leaving, Hildegarde found that two of them were in possession of the relic, for which they seem to have paid well. Hildegarde herself had made a derisory offer, but before she leaves the abbot gives her the relic, perhaps in gratitude for what she and her fellow Cistercians had discovered, the abbey having made as much money as it needed and more from the gullible other buyers.

Mark’s inamorata is saved from the stews because she moves in with Edred’s widow whom the bursar had thrown out of the rooms he occupied when her husband was found dead. Hildegarde had paid for lodgings, in a house run by the man who ran the brothels, but he had a kindly side and was going to finance them to make nets for the fishermen.

So, the Cistercians set off for their home as swiftly as they can to get there on the day of the Epiphany, having stopped en route to pray for King Richard whose birthday it was.

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