‘Sri Lanka offers best investment atmosphere in the region’

British Sri Lankan Chamber of Commerce has been set up to promote bilateral trade between the two countries. Jayampathi Perera is the acting President of the chamber who is also the chairman of the UK- Sri Lanka Business Council. The Asians interviewed him on the aims and objectives of the Chamber.

The Asians: What was the reason to form UK- Sri Lanka Business Council?
Jayampathi Perera: It was formed five years back to promote trade between the two countries. Sri Lankan business community too welcomed the formation of the council. British businessmen also took much interest in it. Last year the ‘so- called’ civil war in Sri Lanka came to an end boosting business and industrial activities in that country. In this backdrop we want to further encourage foreign investments from this platform.

The Asians: How does the council work?
Jayampathi Perera: Besides, Chairman and Vice Chairman the council also has 9 members while the High Commissioner of Sri Lanka is its patron. So far as membership is concerned we enlist those who could work for promotion of bilateral trade.

The Asians: How much the bilateral trade increased after setting up of the council?
Jayampathi Perera: Many British companies have invested in Sri Lanka through this platform and remained very successful. We have sent business worth £3 to 4 billion from here to Sri Lanka. The second important thing is that UK is the largest business partner of Sri Lanka and the third largest exporter.

The Asians: What prompted to set up chamber in presence of the council?
Jayampathi Perera: Trade wing of Sri Lanka High Commissioner to UK proposed to have some link between British Chamber of Commerce and Sri Lankan companies. Secondly, to take advantage of the network of the British Chamber and establish trade connection with British companies. I talked to Harin Malwatte General Secretary of the Ceylon Chamber and sorted out the formalities. Ceylon chamber is the oldest chamber of the South Asia which was set up during British Raj. Besides, Britain is an important centre of world business activities. To achieve these targets British Sri Lanka Chamber of Commerce has been set up. It will facilitate both the countries to tap each others business potentials. Membership of the chamber has been launched and it will start working formally by the end of November. It would also encourage joint ventures.

The Asians: What opportunities British companies do have in Sri Lanka?
Jayampathi Perera: The end of so called war has brought many opportunities for that country in different fields and the situation is fast improving. Investment opportunities have also increased manifold as work is in progress to improve infra structure in the north and east of the country. Restoration of peace has increased trust of the foreign investors. Sri Lanka serves as the trade gate to South Asia. This proximity has increased the potential of that country. It has a fast growing economic market of India in its neighbourhood with which it has free trade agreement under which we could export without tariff. If foreign companies invest in Sri Lanka they could have markets in India, Pakistan and Bangladesh. The GDP last year had been 6% which we want to increased to 8% this year. According to economic intelligence reports Sri Lankan is the third of the ten most growing economies of the world. The government has made investment friendly policies and ensured various incentives to attract foreign investors. I would like to stress on the point that the economic growth could not retard even during the civil war except that the foreign investors hesitated to go there due to disturbance. Such situation now no longer exists and there is no fear of any terrorist attack or cropping uncertainty.

The Asians: How many British companies presently work in Sri Lanka?
Jayampathi Perera: At the moment some 20 to 25 big companies are having their manufacturing units and hundreds of smaller ones are doing business in Sri Lanka. Besides, foreign companies are also working in services sector. There are companies like HSBC, Mark and Spencer, Viva, while many British companies have their outsource offices. British companies are also engaged in infra structural development work in North and East. There is a great potential in tourism sector as well as a large number of British tourists opt for Sri Lanka every year.

The Asians: In your opinion which sectors offer more profit margins?
Jayampathi Perera: There are many sectors including infrastructure development, tourism, healthcare, agriculture, fisheries, telecom, IT and pharmaceutical that offer vast investment opportunities. Many British companies have shown their interest in airport and road network development. Healthcare also offers good business scope. Moreover we don’t have labour problems like Bangladesh and India.

The Asians: SAFTA could not prove as successful as European Union. Why?
Jayampathi Perera: It is because the South Asian countries still depend much on imports from America, China, Japan and Germany. India has recently started manufacturing some items. The second thing is the purchasing power. It is true that middle class has expanded in India and other countries at a faster pace but those living below poverty line are far more in number. Pakistan is a big country but it mostly depends on its agriculture whereas Bangladesh has also advanced in some important industrial sectors beside developing its agriculture and had earned a place in the international market. Raw material is another problem. The main reason for India’s progress is availability of raw material and resources while Sri Lanka still depends on export of coconut, tea and rubber. In my opinion the SAARC countries should exploit each other’s resources for mutual benefits. India is taking this advantage but in Sri Lanka things are not like that. Floods had destroyed Cotton crop in Pakistan that would affect its price in the international market.

The Asians: What steps the Sri Lankan government has taken to attract foreign investments?
Jayampathi Perera: The government has set up Investment Board 20 years back for the purpose to encourage import of heavy machinery and other capital goods. The country has 40 free trade zones in addition to tax reliefs. Investment friendly policies and permission to withdraw and transfer their capital out of country without any hurdle are also ensured. There is no shortage of electricity unlike other countries of the region. The Sinhalese and Tamil expatriates living here are mostly professional but their second and third generations are looking for investment in Sri Lanka. I would suggest that the South Asians expatriates living in Europe should invest in the countries of their origin because of their links. Another important thing is that the South Asian countries should have free trade agreement like European Union so that they could be able to utilize their resources in a better way.