{"id":111435,"date":"2021-02-07T17:27:04","date_gmt":"2021-02-08T00:27:04","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=111435"},"modified":"2021-02-07T17:27:04","modified_gmt":"2021-02-08T00:27:04","slug":"foreign-direct-investments-and-delusions-on-private-contribution-to-the-economy","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2021\/02\/07\/foreign-direct-investments-and-delusions-on-private-contribution-to-the-economy\/","title":{"rendered":"FOREIGN DIRECT INVESTMENTS AND DELUSIONS ON PRIVATE CONTRIBUTION TO THE ECONOMY"},"content":{"rendered":"

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

Without\nany difference of the government and opposition policies, all prefer foreign\ndirect investments (FDI) as they positively impact Sri Lanka\u2019s economy. Especially\nforeign direct investments play a massive role to improve macroeconomic\nvariables such as foreign reserves, employment, GDP growth, international\ntrade, and terms of trade, and many others. \nForeign direct investments are a strong approach to attracting private investors\nto economic activities and indirectly, it is a way of privatizing the economy\nand promoting the contribution from the private sector.<\/p>\n\n\n\n

Delusions\non the privatization policy emerged as a result of the misguided interpretations\nof Marxist political parties, today, JVP plays a major role in this arena and\nif it analyses the economic policies since the 1930s, it would clear that the\nSri Lanka government preferred private sector participation to economic\nactivities with the hope that many people to contribute the economic system. Foreign\ndirect investments are a profitable way of using private capital in the country\nand the positive aspect of the participation of private investors in economic\nactivities is it prevents misuse of capital for anti-social or wishes against\nthe general public. Delusions on private participation in economic activities\nneed to be changed if the country wants rapid economic growth and the\ndistribution of economic benefits to the lower level.    <\/p>\n\n\n\n

Dr.\nPriyath Bandu Wickrama, an excellent port management expert, recently explained\nbona fide information about Colombo port management participating in Derana TV\nprogram 360. Dr. Priyath Bandu described why Sri Lanka needs to attract private\ncapital and such policy makes a positive impact on the economy despite vicious\ntalks of JVP and leftists. Many trade union members have an idea and the\nperspectives of port management and they never attempted to let down the\nconcept of privatizing port management. \nDr.Priyath Bandu indirectly said that the Port Authority needs to\nattract private capital for development purposes and Janatha Vimukthi Preramuna\nis groping in dark without properly understanding the issue. JVP had this issue\nsince its beginning and leaders of the party were not educated by policymakers\nas they had a misguided thrust to catch the power of an armed struggle.<\/p>\n\n\n\n

Colombo\nport has several terminals to develop and they may be East, West, and North\nterminals and Sri Lanka\u2019s government has no sufficient funds to invest in these\nterminal developments as it has many commitments to diversified fiscal areas.\nJVP trade unions which do not represent at least 5% of working people, despite\nthe true situation, they make big talks and media highlight them reflecting\nthat JVP is against foreign direct investments, and why this 3% of support from\nthe entire working class, disadvantage 97% of people in the country? Most\nprobably, JVP is struggling to regain the political power they had in 2015 or\nbefore, but mythical policies would not be appreciated by learned voters in the\ncountry.<\/p>\n\n\n\n

India\nalso works against foreign direct investments in Sri Lanka, and the objection\nmay have associated with two vital points. One is direct investment going to\nSri Lanka, India needs to attract them and the second is working against\nChinese investment in the South Indian zone consider would be profitable to\nIndia. Should Sri Lanka suffer from the Indian attitudes? The answer is no. Sri\nLanka is an internationally recognized sovereign state with the power to make\nits own decisions.<\/p>\n\n\n\n

In\nthis environment, the only option available to Sri Lanka is attracting foreign\ndirect investment from Chinese companies and the settlement of Indian debts as\nsoon as possible. Sri Lanka should appreciate the supports extended by India\nand it should not beg from India as it forces Sri Lanka to respect the hegemony\nof India. The best action that has been taken by the government against the\nIndian hegemony is the settlement of the US $ 400 million swap agreement\naccepting a US $ 1500 million swap agreement with China. To successfully\noperate Hambantota port, the Colombo port city, and the terminals of Colombo\nport, Sri Lanka needs a massive foreign direct investment from Chinese\ncompanies, and as I reiterated the idea since 2014, Sri Lanka needs a currency\nswap agreement of US $ 25 billion and improve the rupee value to a higher\nlevel. <\/p>\n\n\n\n

Foreign\ndirect investments in Sri Lanka have limited to a small area and it should be\nexpanded to regional areas. The productivity and competitiveness improvement of\nthe rural economy, which comprise agriculture and small industries need\noverseas experience that will come with foreign direct investments.  As planned by Mr.Gotabaya Rajapaksa, foreign\ndirect investments play a crucial role for the country, and from the Hambantota\nport area to Colombo North, Sri Lanka can allure a trillion of foreign direct\ninvestment if the dilutions on foreign direct investments and privatization\nremove from the minds of people.<\/p>\n\n\n\n

 Sri Lanka has many options to attract direct\nforeign investments to make structural changes in the country. The secret of\nattracting foreign direct investment is available of projects that could be\ndelivered direct returns in addition to tax benefits. The weakness of Sri Lanka\nis project development for foreigners contribute investments are dearth and the\npolitical authority doesn\u2019t encourage project initiations appealing foreigners\nto making investments.<\/p>\n\n\n\n

A\nvital option for the government to attract foreign direct investment is to\ndevelop a port region (corridor) from the south of Batticoloa to North\nMulaititu. This is a quite large area that could attract a large investment volume\nand about five million tourists from East Europe, China, Korea, Japan, and\nIndia. If a tourist spends the US $ 100 during the stay in Sri Lanka, the\nregion can contribute $ 500 million annually to foreign exchange revenue, and a\nlarge sum of the population could shift from the Western province to this area\nmaking a balance of population distribution. \n<\/p>\n\n\n\n

It\nwill change the political landscape of the country and people going overseas\nfor employment especially female migration for domestic services could be massively\nrestricted and 500000 new employment will be created from service industry such\nas health, education, leisure, and others. \nThe best economic advantage from this port region is the appreciation of\nthe Sri Lanka rupee by a large scale of foreign exchange earning, and\ncaptivation of a large volume of foreign direct investments.<\/p>\n\n\n\n

The\npressure on Colombo and Hambantota ports will ease and many Sri Lankan\nemployees overseas when they come back to the country could be employed in the\nnew economic corridor. India might oppose this type of mega-development project\nas India wants to gain this type of large investments. From Mulaithiu North to\nBatticoloa South needs a toll highway and electric double line rail system and\ndomestic airport to transfer passengers from Mattala and Katunayake.  The South of this economic corridor is closer\nto Polonnaruwa, Sigiriya, and Dambulla. \nChina can extend its foreign investments in this corridor.  At least two harbors for international\ncontainers handling in line with the Silk Road and, transshipment purposes could\nbe established in the area with massive foreign direct investments and another\nport could be established for the fishing purpose. This type of development\nproject would bring a large volume of foreign direct investments and support to\nmake a strong economic and security association with China. Many garment\nfactories in the Western province could be relocated in now economic corridor.<\/p>\n\n\n\n

During\nthe past one and half decade, Chinese investment came to Sri Lanka, but Indian\nobjections were subjected to creeping the investment flow as Sri Lanka\u2019s\ngovernment faced to stand between China and India. Under the Non-aligned\npolicy, Sri Lanka cannot go against India because India is a very good trade\npartner, however, Sri Lanka could not be a yes man when India objects to\nforeign direct investments from China. How to settle this issue needed to be\nconsidered by foreign policymakers.         <\/p>\n","protected":false},"excerpt":{"rendered":"

BY EDWARD THEOPHILUS Without any difference of the government and opposition policies, all prefer foreign direct investments (FDI) as they positively impact Sri Lanka\u2019s economy. Especially foreign direct investments play a massive role to improve macroeconomic variables such as foreign reserves, employment, GDP growth, international trade, and terms of trade, and many others.  Foreign direct […]<\/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-111435","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\/111435","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=111435"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/111435\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=111435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=111435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=111435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}