{"id":108193,"date":"2020-10-31T01:16:52","date_gmt":"2020-10-31T07:16:52","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=108193"},"modified":"2020-10-30T18:15:34","modified_gmt":"2020-10-31T01:15:34","slug":"the-visit-of-mike-pompeo-the-secretary-of-state-and-misconceptions-on-investment-in-sri-lanka","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2020\/10\/31\/the-visit-of-mike-pompeo-the-secretary-of-state-and-misconceptions-on-investment-in-sri-lanka\/","title":{"rendered":"THE VISIT OF MIKE POMPEO, THE SECRETARY OF STATE AND MISCONCEPTIONS ON INVESTMENT IN SRI LANKA"},"content":{"rendered":"

BY EDWARD THEOPHILUS<\/strong><\/em><\/span><\/h2>\n\n\n

When\nit talks about investment nobody can ignore the views of Schumpeter, who is\nregarded as a classical economist that investment is built upon on the level of\nreturns that an investor gains and expected, which is based on the cost of\ninvestment plus the risk that could be tolerated by an entrepreneur. Investors\nare compensated by the return from the investment.  Beyond the classical era, the attraction of\ninvestment to a country has been generally dependent on the return from the\ninvestment. Mr. Mike Pompeo indirectly confirmed the view of Schumpeter at the\ninterview with Ms. Indiwari Amuwatte<\/strong> that the making of investment would\nbe a pure decision of entrepreneurs, and there are no easy ways either\ngovernment or government-sponsored investments in America. Theoretically, it is\na liberal concept of investment that interprets no government intervention or\ninfluence for investments from the point of view of America.      <\/p>\n\n\n\n

The\nwording of Mr. Pompeo summarized the concept of investment in the USA, and it\nwas a challenge to the attitudes of Sri Lankans concerning investment, and from\nthe point of view of China. American aspect of the investment is when the\nprivate investor cannot invest the government participates such as space\ndiscoveries.  <\/p>\n\n\n\n

Before\nand soon after the independence from the British imperial administration, Sri\nLanka\u2019s economic policies were built on the idea of Schumpeter, and it was\nchanged after the political remodeling in 1956. \nThe role of the private sector took to the government hand through\nvarious strategies such as the nationalization of private investment (transport\nsystem and ports), direct government investments in public corporations, and\ncontributions to public companies. The strategic changes of government\ninvestments have achieved negative repercussions on macroeconomic factors, such\nas budget deficit in the fiscal system, problems in the balance of payment\nadjustment process, terms of trade, borrowing for investment by the government,\nand many other issues created in the economy. The most hated economic issue was\nthe public enterprises becoming refugees of the government. <\/p>\n\n\n\n

Politicians\nand people of Sri Lanka trusted the government investment, but it seemed that\nthe policy was economically challenging the beginning from the 1970 decade,\ncreating fiscal and monetary problems that were difficult to comprehend and\ncoped by politicians and the public. It seemed that except for a few educated\npeople public did not concern about the matter.<\/p>\n\n\n\n

Under\nthe political administration of Mao Test Tung, China followed opposite views to\nAmerican aspects of investment, and Den Zio Ping attempted to change the\nChinese aspects of Investment by promoting cooperation with the US  relating to trade and investment, American\npolicy allowed to give the most favorite nation status to China looking at\nchanges, however, China did not deviate from the fundamental views of Marxism\nand attitude of hegemony and continued investment with the ownership of private\nand public.  China also helped many\ncountries in Asia, Africa, and Latin America. During the regime of Xi Jinping,\nbillions of dollars invested in developing countries, and they were made in public\nenterprises. The volume of Chinese investment in Sri Lanka, Pakistan, Nepal,\nand other countries is with public enterprises and they could be considered\nmore than American investments in those countries. The other vital aspect of\nChinese investment was the strategic cooperative partnership based on the\nconsciousness reached by two countries. <\/p>\n\n\n\n

Mr.\nMike Ponmpeo stated that American investment in any country is decided by\nrespective investors and the investment decisions are purely investors\u2019\njudgments despite the decisions of the government. The nature of the Chinese\ninvestments demonstrates that China wishes to engage in government investment,\nmost probably the Chinese decisions associated with protecting of Investors and\nattracting comforts from the respective governments. However, it could be seen\nthat the Chinese government adopted the capitalist system establishing\ngovernment companies for investment in developing countries such as private\ncompanies for the management of investment in the Port City, Hambantota Port,\nand others. It is seen that there is a fundamental difference between Cina and\nthe USA concerning the policy approach, and Mr.Mike Pompeo openly expressed\nAmerican views despite the expectation of people.  <\/p>\n\n\n\n

I\nhave not visited China, many of my friends who have experience in living in\nChina told me that they cannot see a vast difference between modern China and\ndemocratic countries, and investment in China dependent on the view of\nSchumpeter and practically people of China have capitalist views like in the\nUSA.<\/p>\n\n\n\n

In\nthis background, why politicians created public opinion against the management\nof investments by private investors, and continuing government investment than\nthey are privatizing to get out from economic burdens to the government? This\nis a root cause of economic problems in Sri Lanka and I pointed out the issues\nin many of my articles.    <\/p>\n\n\n\n

The\nviews of Mr.Pompeo showed the disguised direction to Sri Lanka that the country\nis in misguided footage, that the public investments must stay as they are, and\ndespite the global policy changes after the cold war that the ownership of the\npublic enterprises should be changed by privatizing or offering shares to\nprivate investors as it happened in many western countries.  Sri Lanka could have to get out of the\nproblem in the 1990 decade, but the cunning politicians and public managers\nkilled the opportunity at the birthplace.<\/p>\n\n\n\n

The\ninvestment talks of Mr.Pompeo directed excellent advice to the country that it\nneeds to make wise decisions. To increase or stabilize the exchange value of\nSri Lanka\u2019s monetary unit, and to gain relief from the repayment of a massive\nquantum of debt could be achieved if the government of Sri Lanka offers the\nownership of public enterprises to the Chinese government than borrowing for\nthe management of public enterprises. \nThe same process could be done by American investors too. Chinese public\ninvestment and American private investment could play a similar role. The\ndifference is the approach of both countries.  This action will give a massive reduction of\nforeign debt and increase the efficiency of public enterprises with management\nacumen and investment stewardship of China or America.  The journalist, Ms. Indiwari Amuwatte made an\nexcellent contribution to Sri Lanka directing the innovative questions to\nMr.Mike Pompio.<\/p>\n\n\n\n

If\nthe government of Sri Lanka allows China to gain ownership of public\nenterprises the volume of foreign reserves in Sri Lanka could be increased to\ndollars 25 billion and the volume of the foreign debt of the country would be\nreduced by 50%.  In this way, Mr.Gotabaya\nRajapaksa can uplift Sri Lanka with less foreign debt, a higher value of Sri\nLanka Rupee.<\/p>\n\n\n\n

Mr.Pompeo\nmade a good idea on American investment and private investors in America could\nwork consistent with the view of Mr. Pompeo, and the government of Sri Lanka\ncould make toward a positive approach to make to change ownership of them.  I don\u2019t think American investors will behave\nlike the characters in the famous novel Ugley Americans\u201d, they will be more\nresponsible in the current environment. \nThe experience of the Asian crisis in the late 1990s guides Sri Lanka to\nmanage investment policy.    <\/p>\n\n\n\n

The\nviews of Mr.Pompeo on the investment would be beneficial to the US, China, and\nIndia as well as Sri Lanka. If Mr. Gotabaya Rajapaksa promotes his policies to\ncreate producing and production economies with balanced growth in sectors and\nprovinces the country would be a developed nation.<\/p>\n","protected":false},"excerpt":{"rendered":"

BY EDWARD THEOPHILUS When it talks about investment nobody can ignore the views of Schumpeter, who is regarded as a classical economist that investment is built upon on the level of returns that an investor gains and expected, which is based on the cost of investment plus the risk that could be tolerated by an […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124],"tags":[],"class_list":["post-108193","post","type-post","status-publish","format-standard","hentry","category-edward-theophilus"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/108193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=108193"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/108193\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=108193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=108193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=108193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}