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Happy With Investments

Feb 12, 2011 1:52:31 PM - thesundayleader.lk

Geethanjana Gunawardane

Deputy Finance Minister Geethanjana Gunawardane is happy with the present investment inflows into the country.
“1977 is different to today,” he told this reporter on Monday when he was asked why investments weren’t flowing into the country now, like it did in 1977.
“Only you’ll are saying that there are no investments, IMF says that there are investment inflows,” he further said.
The situation that existed prior to 1977 and that which exists currently cannot be compared, said Gunawardane.
The country’s economy was opened-up in 1977 when the J.R. Jayewardene led UNP swept the polls that year.
The economy prior to its opening up was modelled along socialist lines with shortages, controls and rationing being the order of the day.
When The Sunday Leader asked Gunawardane whether it was the fear of the uncertainty of Government policies that were holding back investments, he said that that was not the forum to discuss such issues.
The occasion was the launch of a new currency series by the Central Bank of Sri Lanka (CBSL).
Economists and UNP MP Dr. Harsha de Silva who himself is an economist, attributed corruption to be a key impediment to FDI inflows into the country (see last week’s The Sunday Leader issue).
According to IMF Resident Representative Dr. Koshy Mathai, FDI inflows into the country last year were US$ 375 million (CBSL Governor Ajith Nivard Cabraal said that it was US$ 500 million), lower than the US$ 601 million recorded the previous year.
When this reporter asked Mathai whether it was the corruption issue that was hindering FDI inflows into the country, he said that economists as times try to be theoretical about such matters.
But when you speak to the “man in the trench” (investor), the story is different, he said. They attribute it to the 26 year old war. But now Shangri La is coming in, another big time Chinese hotel investor is also coming in, so in the next three to six months we shall see big time FDI inflows into the country, he said (see last week’s The Sunday Leader issue).
It may however be moot to note, that prior to Mathai’s positive picture of future FDI inflows, he earlier said that the next three to six months would be critical to the country.
That occasion was a press conference organized by the IMF last Thursday (February 3) in regard to the release of an IMF tranche of US$ 216.6 million from a total standby arrangement of US$ 2,599.4 million.
When this reporter asked him why he said that the next 3-6 months were going to be critical to the country, Mathai shifted gear and instead came out with the aforesaid positive statement.