By Sri Lanka’s Investment Climate: A Promise of Facilitation Amidst Corruption Concerns
Sri Lanka, long hailed for its strategic location in South Asia, has been making headlines recently with its efforts to attract foreign investments. In a recent statement, President Amara Kumara made a bold promise, declaring that the government would facilitate investments and would not even ask for “a glass of water” from investors. This statement is part of the broader strategy to attract capital, technology, and expertise from global investors, particularly as the island nation faces significant economic challenges.
However, while the rhetoric is reassuring, the reality of Sri Lanka’s investment climate is more complex, particularly when you consider allegations of corruption and administrative hurdles that have long plagued the country.
In recent discussions with foreign diplomats, including the South Korean Ambassador Miyon Lee and the Australian High Commissioner Paul Steven, it was revealed that investors from their countries had faced roadblocks due to corruption and political interference during the time of the previous government . Allegations surfaced that investors had been forced to abandon projects due to demands for kickbacks, with funds redirected to more competitive nations like India and Vietnam.
One of the more high-profile incidents involved an open tender for a fuel pipeline project from Muturajawela to Katunayake Airport, where a South Korean investor had won the contract. Despite the bid being awarded, the project never got off the ground due to unexplained delays and an apparent lack of government authorization. Diplomatic sources from South Korea stated that these roadblocks discouraged further investments from their country.
Sri Lanka’s corruption ranking remains a key concern. According to Transparency International’s Corruption Perceptions Index (CPI), Sri Lanka is still struggling with a ranking of ranked 94th out of 180 countries, indicating that corruption continues to be a significant issue. While the government has taken steps to improve transparency, it is clear that much work remains to be done.
Despite the challenges, the Sri Lankan government remains optimistic. President Amar Kumara’s commitment to creating a favorable investment environment, signals that there is a willingness to tackle corruption head-on. But whether these promises will translate into concrete changes remains to be seen, as Sri Lanka continues to balance the need for foreign investments with the ongoing battle against corruption.
