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Thursday, June 23, 2011

Sri Lanka’s tourism investments reach record levels in 1Q

Post-war Sri Lanka’s booming tourism investments have boosted the island nation’s 2011 first quarter foreign direct investment (FDI) to a record $236 million, the state-run investment promotion arm said recently.

The Board of Investment (BOI) in a statement said the March quarter FDI had leapt 160 percent from a year ago and the end of a 25-year war had given confidence for large and strategic foreign investments in Sri Lanka.

“The strong performance was helped by investments in the dynamic tourism sector which accounted for $132 million”, Jayamapathi Bandaranayake, the head of BOI said in a statement.

The major contributor had been luxury Shangri-La Hotels Lanka Ltd, a subsidiary of Hong Kong-listed hotel operator Shangri-La Asia Ltd .

Utilities led by telecommunications has contributed $62 million in the first quarter while the BOI has signed agreements for $882 million worth FDI, almost triple from $302 million in the corresponding period last year.

“The BOI is confident that the country will leverage the strong momentum into achieving a record inflow of $1 billion this year,” Bandaranayake said.

“With policy consistency as well as the several state agencies working in harmony and coordination towards this common goal, the country will be a promising investment destination.

Sri Lanka received a record $889 million in foreign direct investment in 2008, when the government and Tamil Tiger rebels were fighting the last phase of the war which ended with the defeat of the separatists.

However, offshore investments fell 14.5 percent last year after slowing by 32 percent in 2009 to $601 million.

Economists have attributed the fall in FDI to inconsistent investment policies.

Now the BOI has raised its target to more-than double the FDI by next four years.

“The goal is to increase the FDI target gradually to $2.5 billion in 2015, resulting in an FDI/GDP ratio of approximately 4 percent and pave the way to achieving an economic growth rate of 8-10 percent,” BOI said in its statement.

source - www.dailymirror.lk