Sri Lanka’s business mogul Dhammika Perera attempts to bring hope after govt failures

ECONOMYNEXT – He has backed many governments in power and he was part of some but he now comes in as a minister with more powers to give effect to his promises.

Dhammika Perera, Sri Lanka’s latest Minister of Investment Promotion in the crisis-hit Gotabaya Rajapaksa administration, made a name for himself in gaming, protected businesses and acquisitions that also brought him into banking, hotels, exports and retail.

He has been talking about innovation, entrepreneurship, and the economy for the past few years and promised that he can do a much better job given the chance.

Sources close to Perera said the businessman has been eying a direct role that could influence change in the country’s economy.

Under Mahinda Rajapaksa’s second tenure as the President, Perera was secretary to the Ministry of Transport after being the chairman of the Board of Investment (BOI) in the first.

But he could not make any significant changes in the sectors he headed. Soon after he was given the Investment Promotion portfolio last week, he asked for some time to put a few key issues in order.

“Though the country is in this situation, I think it won’t be a challenge for me to bring in investments,” Perera told the media after he was sworn in. He was referring to the country’s ongoing economic crisis, the worst in its post-Independence history.

“I have brought foreign direct investments even during the war. So, it should not be an issue for me. From Tuesday (June 28) onward, there will be approvals given in just one day.”

This time he is taking a job in government at a time when the country’s exchange rate peg has lost credibility and the economy is in the midst of unprecedented monetary instability which can only be fixed by the central bank.

Unlike during the civil war, when monetary policy was better, the country has now defaulted after two years of state interventions in the form of aggressive stimulus. Investors are uneasy and the public is in survival mode with the currency having all but collapsed.

Many people are looking to leave the island.

Perera promised to fast-track passport processing and promised to ease the traffic outside the main Department of Immigration and Emigration office in Colombo within a week while introducing one-day services in regional Department of Immigration and Emigration offices in Matara, Kandy, and Vavuniya.

“It will take 14 days for me to come up with a road map. I already have a plan. I will resolve all the issues pertaining to investments and passport issuance immediately,” he said.

Critical failures

Perera’s appointment comes after President Gotabaya Rajapaksa and his advisors pushed for quick state interventions in agriculture by banning chemical (inorganic) fertilizer while the currency collapse and high inflation are causing malnutrition among poor children.There are shortages in fuel, cooking gas, and medicines, though trade controls have made big profits for protected businesses.

Thousands of youth-led protesters are still agitating for more than 80 days demanding that President Rajapaksa resign due to his ill-advised policies that have brought the country to its knees.

Perera succeeded former Finance Minister Basil Rajapaksa, President Rajapaksa’s younger brother who resigned from parliament last month after many of the ruling Sri Lanka Podujana Peramuna (SLPP) MPs asked him to quit.

Before Perera was appointed, the island nation witnessed the resignation of a prime minister, the entire cabinet (twice over), a central bank governor, and a treasury secretary between April 03 and May 12.

Perera’s appointment comes at a time the Rajapaksa administration is going through political instability with the originally strong SLPP government having lost its mandate in the face of mounting public protests.

Before his appointment, Perera had revealed his ambitious plans to attract foreign currency inflows through attracting 25,000 foreign students into Sri Lanka’s university system to earn 2.25 billion US dollars, establishing a budget airline hub to earn 2 billion dollars, and providing opportunity for private sector educational institutions to teach ICT.

He has also revealed plans to develop Sri Lanka’s coconut industry to earn 600 million dollars, construct hospitals with internationally recognised facilities to earn 200 million dollars, improve the fisheries industry to earn one billion dollars, and to make Sri Lanka the country with the best business investment environment in Asia with a view to generating three billion dollars.

Perera has been one of the few businessmen who has navigated the country’s inward looking policies well.

Frontline Socialist Party (FSP) member Pubudu Jayagoda before Perera’s name being considered for the national list MP post exposed that Perera’s casino business failed to pay taxes in the past year. However, Perera later said he had settled it 10 days before he was sworn in as an MP.

Perera has given some hope after consecutive failures of the embattled President Rajapaksa, former finance minister Basil Rajapaksa, and former central bank governor Ajith Nivard Cabraal – all of whom built strong hopes among sections of the business community in the beginning.

Analysts say Perera has huge odds to beat in his task to bring investors if monetary stability is not restored soon. (Colombo/Jun29/2022)