Business

World Bank gets straight to the point on charting a new FDI path for Sri Lanka

Published

5 years ago

2021/06/14

By Sanath Nanayakkare

Faris Hadad-Zervos, World Bank Country Director for Sri Lanka, Maldives and Nepal skipped the usual preliminaries at the recent Sri Lanka Invest Forum (SLIF) and came straight to the point and told the participating global investors that Sri Lanka’s potential for attracting investment and creating an equally attractive business environment for new entrants was very clear, and if and when the right combination of things were in place this would become an ideal time to come and invest in Sri Lanka.

Speaking at the plenary session of SLIF on June 7, 2021 he said: “Let’s remember friends, not to focus today much on what Sri Lanka was, is and what it will be. We care about that but the reality is, the investors don’t. They don’t focus on what Sri Lanka is, what it was and what it will be, but what Sri Lanka is versus other countries from an investment point of view. And that’s the name of the game,”

Further speaking the World Bank Country Director said,”

Covid has likely triggered the biggest economic fallout since the Second World War.. I commend Sri Lanka on the many achievements in containing the pandemic in the past two weeks. The government’s management of the health crisis has been recognised worldwide and the measures it has taken to contain the ongoing wave.”

“The Sri Lankan government is focused on addressing its macro fiscal challenge and creating an enabling environment for investment in the short to medium term. We all agree on that and that’s why we are here. FDI has a huge role to play in helping to leverage the potential and diversity of growth in Sri Lanka.”

“In our analytical work, we have identified that some sectors such as textile/clothing, ICT services, Sri Lankan firms are expanding its global footprint, becoming globally competitive moving up the value curve, to diversify its growth and to offer more sophisticated products in different markets. You are showing the potential in these sectors. They have scaled up with the latest outside technology and experience to drive Sri Lanka for transformation. Where can the policymakers tap into the ecosystem to drive innovation in the large existing manufacture sectors such as apparel, ICT and high-tech products to fully harness Sri Lanka’s competitive advantage and integrate into the global value chain further? “

“Then the Tourism sector is the second largest export earner accounting for close to 55% of GDP before the pandemic. Tourism investments were around 10% of total FDI before the crisis. Now we are looking at the light at the end of the Covid tunnel, let’s build back better and greener. It’s time to address logistics, connectivity and shortage of skills to build a service oriented workforce so critical if Sri Lanka is to attract more high value Tourism services. But Sri Lanka’s distance to the frontier markets [in this regard] remains vast. And this is not me speaking about a shortcoming but rather a massive upward potential for a country with very positive horizons.”

“Sri Lanka’s FDI performance in 2019 was less than we wanted it to be.- at 1% of FDIs while Vietnam, Malaysia were able to attract 6% and 2.5% respectively. Sri Lanka aims to attract $ 5 billion FDI by 2025. We believe that this is entirely doable and is realistic given its rich natural resources, strategic location , highly literate workforce and available opportunities for investment.”

“If and when the right combination of things are in place , this becomes an ideal time to come and invest. This alternatively rests on a collective set of policies and practices that make up an investment ecosystem ranging from the improvement of the investment climate and elimination of unnecessary regulatory burdens and to enhancing responsiveness of bureaucracy in order to deliver effective FDI services. What we have seen in other countries is that investment promotion is the beginning of the story and not the end. The name of the game is attracting and retaining investment.”

“Also for the immediate term, the government will face a challenging balancing act between fiscal sustainability and jump starting the economic recovery. All countries are grappling with this. This is not unique to Sri Lanka. So what is the recommendation here? Use this pandemic to turn challenges into opportunities, to tackle the fundamental core issues that existed before the pandemic to build back better, greener and to be more agile. We are believers in the vast potential of Sri Lanka and that’s why we are here today.”

“We need to recognise that the government is focusing on and is trying to balance between fiscal sustainability supporting economic recovery, saving lives and catering to emerging post- pandemic spending needs. We have to recognise that this is a very difficult balancing act.”

“We have to agree that economy depends on production, labour and capital and optimal productivity. These were all affected by Covid leading to prolonged school closures, unemployment, digital barriers in education, reduction in overall investment etc. These will affect growth everywhere. Public investments are likely to be held back by revenue constraints. Sri Lanka is not unique in the world to this unfortunate thing.”

“On the macro fiscal perspective, Covid has aggravated Sri Lanka’s long standing debt vulnerability which pre-existed.. So it is not that Covid created all these problems. Covid exacerbated them and brought to the surface some structural issues that existed, and we have seen sharp contractions in export activities, the largest in recent times.”

“So it is not an easy task contraction in output, lower revenue collection have led to rapid deterioration of fiscal deficits and GDP ratios across the world. No country is immune, so what are the priorities?.First, from a World Bank’s perspective, a policy dialogue is important. When we talk to the policymakers here, it’s agreed that let’s get the debt thing tackled to give more space in the future.”

“Sri Lanka has high debt services obligations that obviously constraints fiscal growth moving forward. We have to focus on this. The government is tackling it. Opportunities for debt financing is limited. Domestic revenue mobilisation is very important which must be central to addressing pressure on public expenditure in the future. I would say, let us keep the momentum on global integration. The government is focused on it and that is commendable. Let us put the export earnings as a key measure over GDP, to follow. Export earnings over GDP – let us follow that over time and see what happens. It would require constant touch-ups to policies. When it comes to import trade regime, I know the government’s policy. I respect it. Let’s address tariffs, para tariffs and barriers to ensure predictability in this regime. While there is no right or wrong policy, look at the role of imports; when does it help exports and domestic industry. Let’s get them in”,: he said.

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Business

Development deficit getting in the way of SL joining RCEP – Trade Ministry Secretary

Published

6 hours ago

2026/06/16

Sahan Weerasooriya

Principal panelists at Pathfinder Foundation forum.

Sri Lanka is not quite ready to join the Regional Comprehensive Economic Partnership (RCEP), since it is lacking sufficient development, Trade Ministry Secretary K.A. Vimalenthirarajah said.

‘At present the Trade Ministry is establishing Sri Lanka’s readiness to join RCEP, which consists of 15 countries, through several channels, Vimalenthirarajah said at a recent round table discussion titled, ‘Sri Lanka’s Pathway to RCEP and the Emerging Global Trading Order’, organized by the Pathfinder Foundation and held at the Colombo Club, Taj Samudra.

‘Sri Lanka is actively accelerating its compliance efforts to join the 15-nation RCEP having submitted its required accession questionnaire in early 2026, he explained.

Vimalenthirarajah added: ‘The Cabinet has established a high-level policy and working committee and also obtained some technical assistance from multilateral partners because complying with RCEP requirements is challenging. Subsequently, this body responded to the follow-up questions that came up and had discussions with RCEP representatives and it expects more follow-up questions with regard to Sri Lanka’s readiness to join RCEP.

‘Sri Lanka has also secured political and diplomatic support from current RCEP members, including Australia, New Zealand, and Indonesia, to facilitate its entry process.’

Meanwhile, state officials, including Industries and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe, are implementing key economic structural reforms, a new tariff policy, and transparent investment criteria required by the bloc. Because formal accession protocols for RCEP are still being finalized, Sri Lanka is also simultaneously negotiating bilateral trade and investment agreements with regional members to accelerate integration.

Abeysinghe, participating virtually in the event said that Sri Lanka cannot achieve sustained export growth and attract large-scale investment by relying solely on its domestic market. ‘As a small economy, the country’s future lies in deeper integration with regional and global value chains. RCEP connects 15 economies, including Japan, South Korea, Australia, New Zealand, China and ASEAN member states, collectively accounting for nearly 30% of global trade, he explained.

Abeysinghe added: ‘Access to such a market would create new opportunities for Sri Lankan businesses, particularly the country’s Small and Medium Enterprises (SMEs), which currently contribute only around 10 percent to national exports.

‘However, Sri Lanka is at least a decade behind in implementing many of the reforms required to fully participate in modern global trade. Recognizing this challenge, the government is now moving forward with several critical reforms: A new tariff policy to improve competitiveness and eliminate barriers to trade, transparent and predictable investment criteria, investment facilitation reforms to improve the ease of doing business, new legislation including the Public-Private Partnership (PPP) Act and SOE reforms to strengthen investor confidence and measures to improve investment protection and unlock new sources of capital, including venture capital and angel investment funds.

‘Sri Lanka’s exports currently stand at approximately US$ 17 billion and have grown only gradually over the years. Expanding market access through bilateral and multilateral agreements, while continuing domestic reforms, is essential if the country is to achieve its long-term economic ambitions.’

By Hiran H Senewiratne

Business

Pussalla Agri Ventures secures EU, USDA organic certs, paving way for high-value exports

Published

6 hours ago

2026/06/16

Sahan Weerasooriya

Roshan Ranawake, Managing Director of Control Union Sri Lanka, presents the certification to Philip J. Wewita, Chairman of Pussalla Agri Ventures (Pvt) Ltd, in the presence of Dr. Chamindi Jayasooriya, Director, and members of the Pussalla Agri Ventures team.

In a landmark development for Sri Lanka’s organic spice sector, Pussalla Agri Ventures has been awarded both EU Organic and USDA Organic certifications for its premium Ceylon cinnamon products. The certifications were officially conferred at Control Union Sri Lanka, signaling a major milestone in the company’s strategic transformation toward fully certified organic operations.

The recognition strengthens Pussalla Agri Ventures’ position as an emerging exporter of certified organic products, with its flagship offering, organic Ceylon cinnamon (Cinnamomum verum, also known as Cinnamomum zeylanicum), cultivated in Sri Lanka’s traditional cinnamon-growing regions.

Notably, the dual certification opens doors to some of the world’s most lucrative and compliance-driven organic markets, including the European Union and the United States.

Pussalla Agri Ventures began its structured transition into organic cinnamon cultivation several years ago, building a fully integrated system covering cultivation, processing, and value addition. The company currently manages extensive cinnamon cultivation lands and operates under strict organic agricultural principles, ensuring compliance with global certification standards.

These certifications, issued through Control Union Sri Lanka, validate that the company’s farming and processing systems meet rigorous international requirements, including restrictions on synthetic chemicals, comprehensive traceability controls, and environmental sustainability practices. These certifications add to an existing portfolio that already includes SL GAP, Food GMP, and Cosmetic GMP certifications.

Company representatives described the achievement as a “milestone” in the Pussalla organic journey, one that paves the way for expanded access to premium export markets in Europe and the United States. According to them, the certifications are expected to enhance buyer confidence, particularly among health-conscious consumers and clean-label food brands.

Pussalla Agri Ventures emphasised that its organic cinnamon is sourced entirely from its own cultivated estates.

“This estate-to-exporter integration ensures full control over quality, traceability, and processing integrity. The company’s model allows cinnamon to be harvested, processed, and packed under continuously monitored conditions, maintaining strict alignment with international organic standards,” they noted.

Speaking further they said:

“Sri Lanka supplies the majority of the world’s True Ceylon Cinnamon, a spice prized for its delicate aroma, low coumarin levels, and reputed medicinal properties. The growing global demand for certified organic spices has created new opportunities for local producers who meet international compliance standards. Pussalla Agri Ventures’ certification achievement places it among a select group of Sri Lankan exporters adopting globally recognised organic systems, thereby enhancing the country’s reputation in high-value spice markets.”

“As organic food sales continue to rise in North America and Europe, certifications such as these are becoming essential rather than optional. For Pussalla Agri Ventures, the journey from conventional to certified organic is not merely a compliance exercise but a strategic repositioning aimed at long-term sustainability and premium pricing power.”

By Sanath Nanayakkare

Business

NCCSL to host seminar on data protection & privacy

Published

7 hours ago

2026/06/16

Sahan Weerasooriya

The National Chamber of Commerce of Sri Lanka (NCCSL) will host a timely and insightful seminar titled “Data Protection & Privacy: Safeguarding Businesses in the Digital Era” on 18th June 2026, from 9.00 a.m. to 12.30 p.m., at the National Chamber of Commerce Auditorium, Colombo 10 with the objective of enhancing awareness among businesses on emerging cyber risks, data protection requirements, and digital security best practices.

As organizations increasingly rely on digital platforms, online transactions, cloud-based systems, and data-driven operations, protecting sensitive information and ensuring privacy compliance have become critical priorities for organizations of all sizes. The seminar aims to provide practical knowledge and strategic guidance to help businesses strengthen resilience against cyber threats while fostering trust and confidence among customers and stakeholders.

Interested parties are encouraged to register by contacting Udula – 0714034775/ 0114741788 | udula.nccsl@gmail.com or Nishanthi – 0762555707 | nishanthi@nationalchamber.lk