Business
World Bank gets straight to the point on charting a new FDI path for Sri Lanka
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.
‘The late Mangala Samaraweera was a true democrat who staunchly opposed racism in all its forms. He was also against corruption. He was a unique person, an achiever, an artist, a creative person, well-read and practical-minded, former President Chandrika Bandaranaike Kumaratunga said. She believes that if Mangala Samaraweera (MS) lived, Sri Lanka would have been changed entirely for the better.
The former President was speaking at a special Mangala Samaraweera commemorative event held at the auditorium of the Bandaranaike Centre for International Studies (BCIS), Colombo on April 22nd, which featured the donation of Minister Samaraweera’s wide-ranging and abundant private collection of books to several Sri Lankan libraries, including that at the BCIS and the Colombo Public Library.
The programme was termed, ‘Reading with Mangala: Insights into his Personal Library and its Onward Gifting to His Fellow Sri Lankans.’ The event marked MS’ 69th birthday.
The book donation was facilitated by the family of the late minister which coordinated closely with the BCIS to make the event a success. Besides former President Kumaratunga, the event was graced by the BCIS Council of Management, public personalities, associates and colleagues of the former minister, BCIS staffers, students and well-wishers.
At the outset of the commemoration, MS was introduced eloquently and at some length to the audience by the late minister’s niece, Chanchala. MS came across to us, basically, as a multi-talented, well-read, colourful and knowledgeable personality. A resourceful person who could change things for the better.
In a panel discussion featuring many dignitaries on Mangala the person and the public figure, former President Chandrika Bandaranaike Kumaratunga mentioned the following as well: ‘Mangala had a vision for the country as a public figure and conceptualized policies in accordance with it. Among other things, he persuaded the entire SLFP to resolve the ethnic issue by political means.
‘In a survey done by a foreign company it was revealed initially that only 23 percent of the country’s Sinhala community supported a political solution to the ethnic conflict. I asked Mangala to tell me how our ideas could be taken to the public. He launched work on this project with 19 ministers. One positive result from these deliberations was the ‘Sudu Nelum Movement’ which Mangala backed to the hilt.
‘Subsequently, the message of a negotiated solution was taken to the country through innovative means, like Street Theatre and the ‘Thawalama’ campaign. Mangala gave of his best to these projects. Subsequently, in a second survey done it was disclosed that 68 per cent of the people accepted a political solution. Thus, did Mangala’s positive approach pay off. He stuck to his principles and never betrayed them.’
By Lynn Ockersz
Japan is ready to undertake fresh loan projects for Sri Lanka since the country has completed its debt restructuring process, Japanese ambassador to Sri Lanka Akio Isomata said.
“Japan is ready to consider taking on such commitments if there is a request from the Sri Lankan end but the undertaking of such projects depends on Sri Lanka’s debt servicing ability, ambassador Isomata added.
The ambassador made these remarks in response to a query raised during a round table discussion organised by the Pathfinder Foundation recently at the Taj Samudra’s Colombo Club. The theme of the event was, “Japan’s response to the US reciprocal tariffs and Japan- Sri Lanka relations in a turbulent world”. The forum was presided over by Pathfinder Foundation chairman ambassador Bernard Goonetilleke.
The ambassador also said that Japan was a victim of corruption in Sri Lanka and expressed optimism that the government would tackle the issue.
“Earlier, there were reports about some Japanese companies facing issues in Sri Lanka in securing investments. Japanese companies strictly observe compliance obligations and therefore never offer bribes or kickbacks, ambassador Isomata explained. Ambassador Isomata said that he attended the function to mark the launch of the ‘National Anti -Corruption Action Plan’ and listened to President Anura Kumara Dissanayake speaking of efforts to address the issue. The ambassador emphasized the need to implement the plan.
Responding to the President’s remarks that politicians belonging to his National People’s Power (NPP) are not involved in any form of corruption, the ambassador said it is equally important to address the same involving Sri Lankan bureaucrats.
Commenting on Japan- Sri Lanka bilateral relations, Isomata said Sri Lanka is a very important partner for Japan in many ways.” As Sri Lanka’s economy is in the process of getting back on track with efforts underway to implement the IMF agreement, along with the debt restructuring agreement, I don’t think Japanese companies will come immediately to make new investments at this stage. But as the Sri Lankan economy goes back on track in a stable manner, I think we can cultivate the interest of Japanese investors to take a closer look at opportunities in Sri Lanka for further investment. We need cooperation with Sri Lankan people, he said.
The ambassador added: “We are seeing increasing numbers of young Sri Lankans going to Japan for employment in Japanese companies. There are two kinds of programmes for inviting young foreign workers into Japan right now.
“One is called the TITP -Technical Intern Training Programme. The second one, recently started, is SSW -Specified Skilled Worker Programme. Under these two programmes, an increasing number of Sri Lankan youngsters are going to Japan right now. We have opened up eight industrial sectors for Sri Lankan workers, starting with caregiving, hotel accommodation, food industry, agriculture, construction and most recently, the transportation sector, like bus driving and truck driving. This will strengthen Japan’s labour market. We need a young labour force because Japan is facing the problem of an ageing society.”
By Hiran H Senewiratne
The SLT Group has reported a Profit After Tax (PAT) of Rs. 2,001 million for the first quarter ended March 31, 2025, a surge from Rs. 156 million in Q1 2024, reflecting effective financial management and improved operational efficiency.
SLT Group demonstrated strong performance for the first quarter of 2025, with revenue increasing 3.4% to Rs. 27,851 million. The growth was primarily driven by Mobitel’s contribution of increased revenues while SLT PLC revenue remained stable.
The Group’s cost optimization initiatives continued to yield positive results, with operating expenses decreasing 2.9% amount to Rs. 710 million compared to the same period last year. The reduction, combined with revenue growth, led to a 13% increase in EBITDA to Rs. 10,443 million.
At company level, SLT PLC reported a marginal 0.7% increase in revenue of Rs. 117 million compared to Q1 2024, primarily driven by growth in enterprise, small and medium enterprises (SMEs) and broadband streams.
SLT PLC also achieved significant cost declines, with operating expenses decreasing 5.2% amount to Rs. 838 million Year-on-Year (YoY). Notably, electricity expenses fell 38.3% following tariff reductions in March and July 2024. Vehicle hiring and fuel costs also decreased 22.7%, and repair and maintenance expenses curtailed by 12.5%.
SLT PLC specifically demonstrated impressive profit growth, with PAT increasing by 369.9% to Rs. 1,344 million compared to Rs. 286 million in Q1 2024. The notable performance was supported by a 380% surge in Profit Before Tax (PBT) to Rs. 1,920 million and a 60.3% increase in Operating Profit to Rs. 2,538 million.
Mobitel demonstrated strong financial performance in the first quarter of 2025, reporting notable revenue growth supported by the growth of data services. Total revenue reached Rs. 11.8 billion, reflecting the company’s success in capitalizing on demand for digital connectivity. Enhanced top-line performance, combined with effective cost reduction initiatives, led to a significant improvement in profitability.
EBITDA increased by 28.5%, resulting in a healthy EBITDA margin of 30%. Operating profit (EBIT) also recorded a marked improvement by 392%, with a 7% EBIT margin. PBT saw considerable growth, and the company successfully turned around its financial position, moving from a net loss in the first quarter of 2024 to a net profit of Rs. 477 million in the same period of 2025.
Reaffirming its commitment to delivering superior network experiences and the widest coverage across the island, SLT-MOBITEL Mobile was recognized as the country’s fastest 4G network for 2024 by Ookla®, the global leader in internet testing and analysis at Mobile World Congress Barcelona, held in March 2025.
Leveraging strong Q1 results as a foundation for 2025 growth, the SLT Group aims to continue the ongoing digital transformation journey delivering innovative solutions and expanding services to meet customer needs. Through operational efficiency and digital advancement, investing in advanced technologies to strengthen market position, the Group remains committed to supporting Sri Lanka’s digital economy and creating value for all stakeholders.
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