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Private Sector Development

Six ways Sri Lanka can attract more foreign investments

Tatiana Nenova's picture
In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion. But Sri Lanka still has ways to go to attract more FDI.
In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion. But Sri Lanka still has ways to go to attract more FDI. Credit: Shutterstock 


To facilitate Foreign Direct Investment (FDI), Sri Lanka launched last week an innovative online one-stop shop to help investors obtain all official approvals. To mark the occasion, this blog series explores different aspects of FDI in Sri Lanka. Part 1 put forth 5 Reasons Why Sri Lanka Needs FDI. Part 3 will relate how the World Bank is helping to improve Sri Lanka’s enabling environment for FDI.

Sri Lanka and foreign investments read a bit like a hit and miss story.

But it was not always the case.

Before 1983, companies like Motorola and Harris Corporation had plans to establish plants in Sri Lanka’s export processing zones. Others including Marubeni, Sony, Sanyo, Bank of Tokyo and Chase Manhattan Bank, had investments in Sri Lanka in the pipeline in the early 1980s.

All this changed when the war convulsed the country and derailed its growth. Companies left and took their foreign direct investments (FDI) with them.

Nearly a decade after the civil conflict ended in 2009, Sri Lanka is now in a very different place.

In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion including foreign loans received by companies registered with the BOI, more than doubling from the $801 million achieved the previous year.

But Sri Lanka still has ways to go to attract more FDI.
 
As a percentage of GDP, FDI currently stands at a mere 2 percent and lags behind Malaysia at 3 – 4 percent and Vietnam at 5 – 6 percent.

Five reasons why Sri Lanka needs to attract foreign direct investments

Tatiana Nenova's picture
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.

To facilitate Foreign Direct Investment (FDI), Sri Lanka is launching this week an innovative online one-stop shop to help investors obtain all official approvals. To mark the occasion, this blog series explores different aspects of FDI in Sri Lanka. Part 2 will explore how the country can attract more FDI. Part 3 will relate how the World Bank is helping to create an enabling environment for FDI in Sri Lanka.

You may have heard that Sri Lanka is intent on drumming up more foreign direct investments up to $5 billion by 2020. At the same time, the government aims to improve the lives of Sri Lanka’s citizens by generating one million new and better jobs.
 
This isn’t a pipe dream. Thanks to its many advantages like a rich natural resource base, its strategic geographic position, highly literate workforce and fascinating culture, the island nation is ripe for investment in sectors such as tourism, logistics, information technology-enabled services, and high-value-added food processing and apparel.
 
What is foreign direct investment and why does Sri Lanka need it?
 
Very simply, foreign direct investment (or FDI) is an investment made by a company or an individual in a foreign country. Such investments can take the form of establishing a business in Sri Lanka, building a new facility, reinvesting profits earned from Sri Lanka operations or intra-company loans to subsidiaries in Sri Lanka.
 
The hope is that these investment inflows will bring good jobs and higher wages for Sri Lankan workers, increase productivity, and make the economy more competitive.  
 
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.
 
Attracting more FDI can help achieve that goal and fulfill the promise of better jobs.
 
Here are five reasons why:

The latest poverty numbers for Afghanistan: a call to action, not a reason for despair

Shubham Chaudhuri's picture
Also available in: دری | پښتو

The just-released Afghanistan Living Conditions Survey (ALCS) paints a stark picture of the reality facing Afghanistan today. More than half the Afghan population lives below the national poverty line, indicating a sharp deterioration in welfare since 2011-12.[1]  The release of these new ALCS figures is timely and important. These figures are the first estimates of the welfare of the Afghan people since the transition of security responsibilities from international troops to the Afghan National Security Forces (ANSF) in 2014.

While stark, the findings are not a surprise

Given what Afghanistan has gone through in the last five years, the significant increase in poverty over this period is not unexpected. The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation in the context of an already impoverished economy and society where human capital and livelihoods have been eroded by decades of conflict and instability.

The withdrawal of international troops starting in 2012, and the associated decline in aid, both security and civilian, led to a sharp decline in domestic demand and much lower levels of economic activity. The deterioration in security since 2012, which drove down consumer and investor confidence, magnified this economic shock. Not surprisingly, Afghanistan’s average annual rate of economic growth fell from 9.4 percent in the period 2003-2012 to only 2.1 percent between 2013 and 2016. With the population continuing to grow more than 3 percent a year, per capita GDP has steadily declined since 2012, and in 2016 stood $100 below its 2012 level. Even during Afghanistan’s years of high economic growth, poverty rates failed to drop, as growth was not pro-poor. In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable.

په افغانستان کې د فقر په هکله د وروستیو ارقامو او شمېرو خپراوی: د عملي او مخنیوونکو اقدامونو لپاره خبرتیا، نه د ناهیلۍ رامنځته کول

Shubham Chaudhuri's picture
Also available in: English | دری

د افغانستان د احصائيي مرکزي ادارې لخوا په افغانستان کې د ژوند د وضعیت د څېړنې سروې موندنې په دغه هېواد کې د شته واقعیتونو به هکله یو مشرح انځور څرګند کړی. ترلاسه شوي معلومات دا څرګندوي، چې د افغانانو له نیمایي څخه زیات نفوس د فقر د کرښې لاندې ژوند کوي، چې دا حالت د ۲۰۱۱ – ۲۰۱۲ زېږدیز کلونو[i] په پرتله د ټولنیزې- اقتصادي اوضاع په لا خرابېدلو دلالت کوي. د دغې سروې د تازه ارقامو او معلوماتو خپراوی په ډېر مناسب وخت کې ترسره کېږي، ځکه چې دا ارقام او اړونده تحلیلي ټولګه ېې د افغانستان د خلکو د هوساینې وضعیت وروسته له هغه چې په ۲۰۱۴ کال کې له نړیوالو ځواکونو څخه د افغانستان امنیتي ځواکونو ته امنیتي مسوولیتونو لېږد ترسره شو، په تفصیل سره څېړلۍ ده.
که څه هم د دغې سروې موندنې ناهیلۍ کوونکې دي، خو د حقیقت پربنسټ دي

دې حقیقت ته په پام سره، چې افغانستان په تېرو پنځو کلونو کې له زیاتو پېښو سره مخامخ شو او ډېرې لوړې او ژورې ېې تجربه کړې، نو ځکه په اوس وخت کې د فقر او بیوزلۍ د بې ساري زیاتوالي تمه هم کېدله. د فقر لوړه کچه د اقتصادي فعالیتونوله کمښت، د نفوس د زیاتوالي او د امنیتي وضعیت له خرابېدلو سره مستقیمه اړیکه لري. له بلې خوا د داسې یوې ټولنې جورښټ، چې اقتصادي بنسټونه ېې د اوږد مهاله جګړې او بحران له امله ویجاړې شوې وي او بشري ځواک او معیشتي برخې ېې د ټیکاو او امنیت د نه شتون له امله خورا زیانمنې شوي وي، پرته له کوم شک څخه، چې د فقر ټغر هم پکښې ډیر پراخ پاتې کېږي.

د ۲۰۱۲ زېږدیز کال په لومړیو کې د نړیوال ایتلاف د ځواکونو په تدریجي وتلو سره، او په ورته مهال د افغانستان د ملکي او پوځي څانګو د مالي مرستو کمېدل، د اقتصادي فعالیتونو او د خصوصي سکټور خدماتو لپاره د تقاضا کچه ېې په شدت سره زیانمنه کړې  ده. له ۲۰۱۴ کال وروسته د امنیتي وضعیت خورا خرابوالۍ د دې لامل شو، څو د پانګوالو او مستهلکینو باور په سیاسي اوضاع باندې را کم شي، او له دې امله یو ستر اقتصادي ټکان رامنځته شو. پرته له کوم شک څخه د افغانستان اقتصادي وده، چې له ۲۰۰۳ څخه تر ۲۰۱۲ کلونو پورې شاوخوا ۹،۴ سلنه وه، وروسته له هغه چېد ۲۰۱۳ تر ۲۰۱۶ کلونو په ترڅ کې امنیتي وضعیتخورا خراب شو، نو له امله ېې اقتصادي وده هم ۲،۱ سلنې ته را ټیته شوه. د نفوس د کچې د ۳سلنې، کلنۍ وده سره جوخت، د ناخالص کورني تولید په حساب د سرانه عاید کچه له ۲۰۱۲ کال راپدېخوا په دوام داره بڼه را ټيته شوې ده، څرنګه چې د ۲۰۱۲ کال په پرتله په ۲۰۱۶ کال کې د ۱۰۰ امریکايي دالرو په اندازه را ټیټه شوې ده. د یادونې وړ ده، چې حتي په هغو کلونو کې چې افغانستان یوه ښه اقتصادي وده لرله، د فقر او بېوزلۍ په کچه کې هراړخیز لږوالی رامنځته نه شو، ځکه، چې د اقتصادي ودې محور د هېواد په بېوزلو سیمو کې د فقر په کموالي تمرکز نه درلود. پر دې سربېره، په وروستیو کلونو کې له اقتصادي ودې څخه د نفوس د کچې د ودې چټکوالی، د دې لامل شوی، څو د فقر لمن نوره هم پراخه شي.

نشر آمار و ارقام اخیر پیرامون وضیعت فقر در افغانستان: هشدار برای اقدامات عملی و پیشگیرانه، نه ایجاد نا امیدی

Shubham Chaudhuri's picture
Also available in: English | پښتو

نشر سروی وضعیت زندگی درافغانستان توسط اداره مرکزی احصائیه یک تصویری کلی از واقیعت های موجود را در این کشور برملا میسازد. آمار و ارقام ارایه شده حاکی از آنست که بیشتر از نصف افغانها در زیر خط فقر زندگی مینمایند، که این حالت نشان دهنده تشدید وخامت اوضاع اجتماعی- اقتصادی نسبت به سالهای ۲۰۱۱-۲۰۱۲ میلادی[i] میباشد. نشر یافته ها و ارقام تازه این سروی در زمان مناسبی صورت میگیرد، چنانچه که این ارقام نخستین بسته معلومات تحلیلی پیرامون چگونگی وضعیت رفاه مردم افغانستان را پس از زمان انتقال مسؤولیت های امنیتی از نیروی های بین المللی به نیرو های امنیتی افغانستان در سال ۲۰۱۴ فراهم میسازد.

باوجود اینکه یافته ها این سروی نا اُمید کننده اند، اما مبتنی بر واقیعت اند

باتوجه به آنچه که در افغانستان در طی پنج سال گذشته اتفاق افتاده و این کشور مسیر پر فراز و نشیب پیموده، افزایش چشمگیر فقر در این مقطع زمانی دور از انتظار نبود. میزان بُلند فقر رابطه مستقیم با رکود فعالیت های اقتصادی، افزایش تراکم  نفوس و بدتر شدن وضعیت امنیتی دارد. از سوی دیگر ساختار های اقتصادی افغانستان طی سالیان متمادی در اثر جنگ و ناامنی از هم فروپاشیده و منابع بشری و معیشتی آن بنابر بی ثباتی و نا امنی به شدت آسیب دیده باشد، بدون شک که ریشه های فقر بستر گسترده دارد.

با شروع تدریجی خروج نیرو های بین المللی در اوایل سال ۲۰۱۲ میلادی، و کاهش همزمان کمک های مالی به بخش های نظامی و ملکی، میزان عرضه و تقاضا به خدمات و فعالیت های اقتصادی و سکتور خصوصی نیز به شدت کاهش یافت. بدترشدن اوضاع امنیتی پس از سال ۲۰۱۴؛ باعث کاهش اعتماد سرمایه گذاران و مسهلکین نسبت به اوضاع سیاسی گردید و این وضعیت بالنوبه یک شوکه اقتصادی بزرگ را ایجاد کرد. بدون شک میزان رُشد اقتصادی افغانستان که طی سالیان ۲۰۰۳ الی ۲۰۱۲ همه ساله در حدود ۹،۴ درصد بود، در اثر بدتر شدن اوضاع امنیتی در جریان سالهای ۲۰۱۳ الی ۲۰۱۶ به ۲،۱ درصد کاهش یافته است. همزمان با رُشد ۳ درصدی میزان نفوس در سال، میزان درآمد سرانه به حساب تولید ناخالص داخلی از سال ۲۰۱۲ بدینسو به طور دوامدار کاهش یافته است، چنانچه که  در سال ۲۰۱۶ به اندازه ۱۰۰ دالر امریکایی کاهش در مقایسه به سال ۲۰۱۲ گزارش گردیده است. شایان ذکر است که حتی در طول سال های که افغانستان رُشد اقتصادی مطلوب را تجربه کرد، کاهش قابل ملاحظۀ در میزان فقر رونما نگردید، زیرا محور رُشد اقتصادی در کاهش فقر بر محلات فقیر این کشور متمرکز نبود. رویهمرفته با پیش افتادن افزایش رُشد نفوس از رُشد اقتصادی در طی سال های اخیر، افزایش میزان فقر غیر قابل اجتناب بود.

Bringing together the next generation of digital innovators in Pakistan: Meet Zaki Mahomed

Priya Chopra's picture

The Digital Youth Summit (DYS) is a technology focused conference that takes place annually in Peshawar, Pakistan. In the lead up to the summit, we bring to you the first of our Speaker Spotlights featuring Zaki Mahomed. The upcoming DYS is on April 27-28, 2018. Register now here.  



Zaki Mahomed (ZM) is founder & CEO at Pursuit, a new startup based in San Francisco. Pursuit helps people build the lives of their dreams through easy access to skilled immigration programs. Having lived in Karachi, Singapore, Toronto and San Francisco before turning 30 has given him a global perspective on the art and science of building great companies.

Tell me a little about what you are working on now?  How did you get started?

ZM: I recently founded and am the CEO of Pursuit. We help highly skilled immigrants access global job opportunities with companies that will sponsor their work visas. We want to live in a world where borders are not barriers to opportunities and employers can seamlessly hire perfect candidates from anywhere in the world.

I started Pursuit because I’ve lived and worked in 5 cities over my career. One of the most satisfying experiences of my career has been hiring immigrants who took a risk on my ideas and companies and moved their entire lives to join us. While fraught with risk, I’ve rarely regretted giving an opportunity to an immigrant and always gotten a committed and loyal worker in return. We want to make it easy for other businesses to be able to provide such opportunities to the type of talent they desperately need!

Specifically, through Pursuit, qualified skilled workers can apply for their immigrant visas and upon approval, get matched with vetted employers looking for their skills. Currently we work with Software Engineers and Developers and we primarily operate in Canada, which is our first market.

What do you think is the future for youth in the tech industry?

رفاه در حوزه جنوب آسیا مستلزم سهم بیشتر زنان با پرداخت معاش کافی در نیروی کار

Annette Dixon's picture
Also available in: English

Women in the Work Force
جنوب آسیا شاهد رشد اقتصادی ٦ در صدی طی ٢٠ سال گذشته بوده، که این امر در نتیجه سبب کاهش فقر و بهبود در عرصه صحت و تعلیم و تربیه گردیده است. ما در حالیکه از این پیشرفتها در روز جهانی زن تجلیل می کنیم، بهتر میبود اگر زنان بیشتر با دریافت مزد کافی شامل نیروی کار میبودند. زنان در جنوب آسیا فقط ٢٨ درصد نیرو کار و یا انعده شان که در جستجوی کار هستند، را تشکیل میدهند. در مقایسه  با حوزه خاورمیانه و شمال آفریقا که در انجان ٢١ درصد نیرو کار را مردان تشکیل میدهند در حوزه جنوب اسیا مردان ٧٩ درصد نیرو کار هستند، که این دومین کمترین میزان در جهان است.
 
 نیروی بالقوه انکشاف  جنوب آسیا با بزرگترین جمعیت کار در حال رشد، در طبقه متوسط قرار دارد؛ اما کمبود زنان در مشاغل و مشارکت اقتصادی، منعکس دهنده فرصت های از دست رفته است. ده ها میلیون زن در هند و سریلانکا، در طول بیست سال گذشته از نیروی کار کنار رفته اند.
 
 از جمله بسیاری از عوامل باز دارنده، یکی هم بیسوادی است که تقریبا نیمی از زنان بالغ  در جنوب آسیا را دربر میگیرد که دخترانشان از بالاترین میزان سوء تغذی در جهان رنج می برند. میزان خشونت علیه زنان و مرگ و میر مادران در بالاترین میزان در جهان باقی مانده است. همه این عوامل مشارکت کم، بیکاری بیش از حد  و تفاوت های مزد مستمر برای زنان است، که در بازار کار را نشان می دهد.
 
 چه کاری می توانیم انجام دهیم تا به وجه احسن، زنان را تشویق کنیم تا در نیروی کار شرکت کنند؟ این کار، با شروع ارزش قایل شدن به ارزشهای دختران برابر فرزندان است - دسترسی آنها به غذاهای مغذی و سرمایه گذاری در آموزش و پرورش آنها برای دستیابی به توانایی هایشان فراهم می شود. بیایید علاقۀ دختران جوان را در موضوعاتی مثل علم و ریاضیات جلب کنیم و آنها را متقاعد سازیم که آنها به همان اندازه پسران توانایی دارند و میتوانند در مهندسی، تحقیقات علمی، فناوری اطلاعات و دیگر زمینه هایی که توسط کارفرمایان تقاضا می شود، شغل ایجاد کنند. ما همچنین باید توجه فرزندانمان را به احترام دختران و زنان افزایش دهیم و روشن کنیم که برای خشونت مبتنی بر جنسیت، هیچ مجال باقی نمانده است.

South Asia’s prosperity will require more women to work for pay

Annette Dixon's picture
Also available in: دری

Women in the Work Force

South Asia has enjoyed a growth rate of 6 percent a year over the past 20 years. This has translated into declining poverty and improvements in health and education. While worthy of celebration as we mark International Women's Day, the success could have been more dramatic if more women worked for pay. Only 28 percent of women in South Asia have a job or are looking for one, compared to 79 percent of men. This is the second lowest in the world, after the Middle East and North Africa region at 21 percent.

With the largest working-age population and growing middle class, South Asia’s development potential is vast. But the lack of women in employment and economic participation reflects lost potential. In India and Sri Lanka, tens of millions of women have dropped out of the work force over the last twenty years.

Many factors are holding them back. Almost half of South Asia’s adult women are illiterate and its girls suffer from the highest malnutrition rates in the world. Rates of violence against women and maternal mortality remain among the highest in the world. All these factors translate into a labor market characterized by low participation, high unemployment and persistent wage gaps for women.

What can be done to better prepare and encourage women to participate in the work force? It starts with valuing our daughters as much as our sons – providing them with the same access to nutritious foods and investing in their education for them to reach their potential. Let’s spark the interest of young girls in subjects like science and mathematics, and convince them that they are just as capable as boys –that they too can build careers in engineering, scientific research, IT, and other fields that are in demand by employers. We must also raise our sons to respect girls and women, and make it clear that there is zero-tolerance for gender-based violence.

Sri Lanka at 70: Looking back and forward

Idah Z. Pswarayi-Riddihough's picture
A view from the Independence day parade.At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
A view from the 2018 Independence Day parade. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation. Credit: World Bank

Like many Sri Lankans across the country, I joined Sri Lanka’s 70th Independence Day festivities earlier this month. This was undoubtedly a joyful moment, and proof of the country’s dynamism and stability. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
 
The country’s social indicators, a measure of the well-being of individuals and communities, rank among the highest in South Asia and compare favorably with those in middle-income countries. In the last half-century, better healthcare for mothers and their children has reduced maternal and infant mortality to very low levels.
 
Sri Lanka’s achievements in education have also been impressive. Close to 95 percent of children now complete primary school with an equal proportion of girls and boys enrolled in primary education and a slightly higher number of girls than boys in secondary education.
 
The World Bank has been supporting Sri Lanka’s development for more than six decades. In 1954, our first project, Aberdeen-Laxapana Power Project, which financed the construction of a dam, a power station, and transmissions lines, was instrumental in helping the young nation meet its growing energy demands, boost its trade and develop light industries in Colombo, and provide much-needed power to tea factories and rubber plantations. In post-colonial Sri Lanka, this extensive electrical transmission and distribution project aimed to serve new and existing markets and improve a still fragile national economy.
 
Fast forward a few decades and Sri Lanka in 2018 is a far more prosperous and sophisticated country than it was in 1954 and, in many ways, has been a development success story. Yet, the island nation still faces some critical challenges as it strives to transition to another stage of its development and become a competitive upper middle-income country.
 
Notably, the current overreliance on the public-sector as the main engine for growth and investment, from infrastructure to healthcare, is reaching its limits.  With one of the world’s lowest tax to gross domestic product (GDP) ratios -- 12% in 2016, down from 24% in 1978 —Sri Lanka’s public sector is now facing serious budget constraints and the country needs to look for additional sources of finance to boost and sustain its growth.
 
As outlined in its Vision 2025, the current government has kickstarted an ambitious reform agenda to help the country move from a public investment to a more private investment growth model to enhance competitiveness and lift all Sri Lankans’ standards of living.
 
Now is the time to steer this vision into action. This is urgent as Sri Lanka is one of the world’s most protectionist countries and one of the hardest to start and run a business. As it happens, private foreign investment is much lower than in comparable economies and trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016. Reversing this downward trend is critical for Sri Lanka to meet its development aspirations and overcome the risk of falling into a permanent “middle-income trap.”

Rebuilding houses and livelihoods in post-earthquake Nepal

Mio Takada's picture
When the 2015 earthquake hit Nepal, Fulmati Mijar lost her home and livelihood. Now, she has turned her life around, learned carpentry and quake-resistant techniques, and started a business
When the 2015 earthquake hit Nepal, Fulmati Mijar lost her home and livelihood. Now, she has turned her life around, learned carpentry and quake-resistant techniques, and started a business. Credit: World Bank.

 
Fulmati Mijar, a mother of three living in Nuwakot district in Nepal, used to earn her living from daily wage labor along with her husband.
 
On April 25, 2015, their lives took a turn for the worse when a magnitude 7.8 earthquake struck Nepal, killing 8,790 people and affecting 8 million more—or nearly a third of the country’s population.
 
The catastrophe destroyed Fulmati’s house and made her family more vulnerable.
 
Yet, it did not dent her resolve.
 
When housing reconstruction started through the Earthquake Housing Reconstruction Project (EHRP), Fulmari joined her village’s Community Organization (CO), supported by the Poverty Alleviation Fund (PAF) and learned carpentry and earthquake-resistant techniques for housing reconstruction.
 
She initially received a NPR18,000 ($176) loan to invest in a small furniture enterprise. With the funds, her family started making windows, doors, and kitchen racks, which were in high demand. After repaying the loan, she received another loan to upgrade their furniture enterprise, where today she and her family make their living.
 
At the time of the 2015 earthquake, full recovery was estimated to cost $8.2 billion, with the housing recovery component amounting to $3.8 billion. The World Bank immediately pledged $500 million to support the emergency response. During the reconstruction phase, the most urgent—and largest—need was to rebuild nearly 750,000 houses.
 
More than two years since the earthquake, restoring lost or affected livelihoods has become more important.

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